WASDE: Domestic Demand for Corn Increases

Published on: 12:56PM Jan 11, 2013

The USDA's January WASDE and Grain Stocks report was released today at its new time, 11:00AM CST. The highlighted stats included increases in corn yield, offset by an even larger increase in domestic use of corn. Corn, soybeans, and wheat all had a decrease in stocks stored in all positions.


U.S. corn production for 2012/13 was increased by 55 million bushels to 10.78 billion bushels due to a 1.1 bushel per acre increase in average yield. This was slightly offset by a decrease of 346,000 harvested acres.
Corn use in the U.S. for 2012/13 was projected at 11.267 billion bushels, a 100 million bushel increase, due to increased feed and residual disappearance. Ending stocks were lowered by 44 million bushels to 602 million. The stocks-to-use ratio continued to decline by 0.5% to 5.3%.
Exports of U.S. corn was reduced, as the USDA projected a 200 million bushel decrease due to a slow pace of shipments and increased competition from South America. The season average price range remains unchanged at $6.80 to $8.00 per bushel.
Global coarse grain supplies in 2012/13 were estimated to increase 2.9 million tons, mostly due to an increase in the U.S. corn crop and increased production from South America. Global corn consumption for 2012/13 was increased by 5.6 million tons due to U.S. consumption.
USDA reported 8.03 billion bushels of corn on hand for December 1, 2012, a 17% decrease from a year ago. Of the total stocks, 4.59 billion bushels are stored on farms, down 26% to last year. Off-farm stocks were at 3.44 billion bushels, down 1% from a year earlier. September-November 2012 disappearance is 3.74 billion bushels, compared to 3.84 billion bushels a year ago.
Although corn production increased and exports are weak, corn balance sheets will remain tight due to strong domestic demand.
An increase of 44 million bushels to the U.S. production of soybeans was due to an increase in yield and harvested area. The soybean yield increased 0.3 bushels to 39.6 bushels per acre. U.S. 2012/13 ending stocks were increased by 5 million bushels to 135 million bushels. The 2012/13 average soybean price was lowered 30 cents at the midpoint to $13.50 to $15.00 per bushel.
Soybeans stored in all positions decreased 17% compared to last year with 1.97 billion bushels as of December 1, 2012. Stocks stored on farms totaled 910 million bushels, a 20% decrease from a year ago. Off-farm stocks decreased to 1.06 billion bushels, down 14% from last December. September-November 2012 disappearance set a record high 1.22 billion bushels, an increase of 30% from last year.

2012/13 U.S. wheat ending stocks were decreased by 38 million bushels to 716 million. U.S. wheat feed and residual use for 2012/13 was increased by 35 million bushels. The season average wheat price for 2012/13 was lowered 10 cents at the midpoint to $7.65 to $8.15 per bushel.
Wheat stocks decreased slightly from last year with 1.66 billion bushels being reported on December 1, 2012. On-farm stocks were estimated at 400 million bushels, down 1% from last December. Off-farm stocks were up slightly from last year, coming in at 1.26 billion bushels. The September-November 2012 disappearance was 445 million bushels, down 8% from December of last year.

The January WASDE and Grain Stocks reports have historically lead to large price shifts, although for the upcoming months we will track forecasts of planted acres and especially how many corn acres are anticipated. The reports coming in the next few months will only be forecasts, the real data will come when farmers are in the fields planting the 2013 crop.
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