U.S. imports for corn will be at an all-time annual high this year, over six times above the 10-year average annual imports of 16 million bushels.
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There was a more narrow range in market expectations for corn and soybean production prior to the release of The World Agricultural Supply and Demand Estimates (WASDE) report on Nov. 9, compared to the October survey, explains Lisa Elliott, SDSU Extension Commodity Marketing Specialist and Assistant Professor.
"The corn production estimate was within the market's expectation, while the soybean production estimate exceeded the market's expectation," Elliott said.
After reviewing the report, Elliott provides producers with a crop overview.
Prior to the report, market analysts' expectation, Elliott says that corn yield ranged from 121 to 124 bushels per acre and total production ranged from 10,100 million bushels to 10,881 million bushels. In the report, corn yield was raised from 122 bushels per acre (Oct. WASDE) to 122.3 bushels per acre, while harvested acres remain unchanged at 87.7 million acres.
"Harvested acres will not be adjusted until the next crop production report is released on January 11, 2013, at which time more information will be available from the USDA-NASS county agriculture production and quarterly stocks survey," she said.
She adds that the U.S. corn production raised by 19 million bushels to 10,725 million bushels based upon the yield adjustments. In addition, imports were raised by another 25 million bushels to 100 million bushels (August WASDE corn imports were raised 45 million bushels).
"This would put imports at an all-time annual high, and over six times above the 10 year average annual imports of 16 million bushels. With production and imports raised, this resulted in U.S. corn supply being raised by 45 million bushels," Elliott said.
On the demand side, the only adjustment was made to food/seed/industrial, which was increased by 17 million bushels. This resulted in ending stocks being raised to 647 million bushels, 4.5% higher than the previous report. This brings the ending stocks-to-use ratio to 5.8%. U.S. stocks-to-use has not been below 6% since 1995 when it was 5%.
For South Dakota, 2012 corn harvested acres were unchanged at 5.35 million acres with potential adjustments not being made until the Jan.11 report is released. In addition, yield, in South Dakota, remained unchanged at 94 bushels per acre.
Elliott says market analysts' expectation prior to the Nov. WASDE report for soybean yield ranged from 37.1 to 39.1 bushels per acre and total production ranged from 2,720 million bushels to 2,959 million bushels.
"In the report, soybean yield was increased from 37.8 bushels per acre (Oct. WASDE) to 39.3 bushels per acre with harvested acres remaining unchanged at 75.7 million acres," she said.
Potential adjustments in harvested acres will not be made until the January 11 report is released. The 1.5 bushels per acre increase in yield resulted in a production increase of 111 million bushels, thus raising total production to 2,971 million bushels. This is a 3.9% increase in production of soybeans compared to the Oct. WASDE estimate. This production estimate exceeded the market's high-side range of estimates.
"Most of the new production was offset on the demand side by an increase in projected exports (80 million bushels) and projected crushing (20 million bushels)," Elliott said.
She points out that the increased export estimate of 1.35 billion bushels is much closer to the early marketing year projection of 1.51 billion bushels made in the May WASDE report prior to the 2012 drought reducing supplies that would be available for exports. Ending stocks were raised slightly to 140 million bushels from 130 million bushels. The offsetting demand still implies a tight stocks-to-use of 4.6%, with the ten year average being 8.1%.
For South Dakota, 2012 soybean harvested acres were unchanged at 4.65 million acres with potential adjustments not being made until the Jan. 11 report is released. In addition, yield, in South Dakota, remained unchanged at 28 bushels per acre.
Elliott says the only adjustment to the U.S. wheat balance sheet was made on the demand side with exports being lowered by 50 million bushels to 1,100 million bushels.
"This resulted in ending stocks at 704 million bushels. This brings the ending stocks to use ratio to 28.9%. U.S. stocks-to-use has not been this low since 2008," she said.
An examination of U.S. wheat by class shows changes in only hard winter and soft red wheat. U.S. hard winter wheat supplies increased 9 million bushels due to increases in imports. On the demand side, exports decreased by 25 million bushels for U.S. hard winter wheat.
This resulted in ending stocks increasing by 34 million bushels to 229 million bushels for hard winter wheat. The other change by wheat class was made to soft red wheat where supply decreased by 9 million bushels due to decreased imports. On the demand side, soft red wheat exports decreased by 25 million bushels. This resulted in ending stocks increasing by 16 million bushels to 205 million bushels for soft red wheat.
"Also important to note is that WASDE lowered global wheat production by 1.6 million metric tons due to Australia's production being lower by 2 million metric tons, while a few other countries' production numbers were adjusted slightly," she said.
Global wheat exports increased, while world consumption decreased. This resulted in world ending stocks increasing by 1.2 million metric tons to 174.2 million metric tons.
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