PF Editors: USDA Delivers Bearish January Report Data

January 12, 2012 02:45 AM
 

** ANNUAL CROP PRODUCTION SUMMARY **

  • CORN: 12.358 bil. bu.; traders expected 12.280 bil. bu.  
       -- compares to 12.310 bil. bu. in Nov. and 12.447 bil. bu. in 2010   
  •  BEANS: 3.056 bil. bu.; traders expected 3.042 bil. bu.  
      -- compares to 3.046 bil. bu. in Nov. and 3.329 bil. bu. in 2010  
  •  COTTON: 15.674 mil. bales; traders expected 15.64 million bales
      -- compares to 15.827 mil. bales in Dec. and 18.104 mil. bales in 2010

 

USDA now puts the national average corn yield at 147.2 bu. per acre. That's up a half bushel from USDA's November Crop Production Report. The increase in the national average yield pushed 2011 corn production nearly 80 million bu. above the average pre-report trade estimate. The crop, however, is still about 90 million bu. smaller than year earlier. Along with the uptick in yield, USDA also added 45,000 acres to the harvested acreage total compared to the November crop report.

Looking at the state-by-state breakdown on corn, yield increases from the November Crop Production Report were recorded in: Illinois (up 1 bu., to 157 bu. per acre); Indiana (up 1 bu., to 146 bu.); Iowa (up 1 bu., to 172 bu.); Kansas (up 7 bu., to 107 bu.); Michigan (up 5 bu., to 153 bu.) and Minnesota (up 4 bu., to 156 bu. per acre.). USDA held the yield steady in Nebraska (160 bu. per acre). Lower corn yields were recorded for: North Dakota (down 5 bu., to 105 bu. per acre); Ohio (down 1 bu., to 158 bu.); South Dakota (down 3 bu., to 132 bu.); and Wisconsin (down 4 bu., to 156 bushels).

USDA now puts the national average soybean yield at 41.5 bu. per acre. That's up 0.2 bu. from the November Crop Production Report. The increase means the bean crop is nearly 15 million bu. above the average pre-report trade estimate, but overall output is estimated down about 280 million bu. from 2010. That uptick in yield was partially offset by a 40,000-acre cut to harvested acres, compared to the November Crop Production Report.

Looking at the state-by-state breakdown on soybeans, yield increases from November were recorded in: Arkansas (up 1 bu., to 38 bu. per acre); Illinois (up 1 bu., to 47 bu.); Indiana (up 3 bu., to 45 bu.); Nebraska (up 0.5 bu., to 53.5 bu.); N. Dakota (up 0.5 bu., to 28.5 bu.); and Ohio (up 1.5 bu., to 47.5 bu. per acre). USDA held the yield steady in Iowa (50.5 bushels per acre). Lower soybean yields were recorded for: Minnesota (down 1.5 bu., to 38.5); Missouri (down 0.5 bu., to 36.5 bu.); and S. Dakota (down 1 bu., to 37 bu. per acre).

USDA now puts the national average cotton yield at 772 lbs. per acre, up 1 lb. per acre from the December Crop Production Report. Harvested acres, however, were cut by slightly more than 100,000 from December, resulting in the 153,000-bale cut to production.


** WINTER WHEAT SEEDINGS **

  • ALL WINTER WHEAT: 41.9 mil. acres; traders expected 41.0 mil. ac.
    -- compares to 40.6 mil. acres in 2011
  • HRW: 30.1 mil. acres; traders expected 29.6 mil. acres
    -- compares to 28.5 mil. acres in 2011
  • SRW: 8.4 mil. acres; traders expected 7.7 mil. acres
    -- compares to 8.7 mil. acres in 2011
  • WHITE WINTER: 3.5 mil. acres; traders expected 3.7 mil. acres
    -- compares to 3.7 million acres in 2011

 

Winter wheat seedings came in above the average pre-report trade estimate and most of those unexpected acres are in soft red country. SRW seedings were expected to drop 1 million acres from year-ago, but instead are down only about 300,000. That puts SRW seedings about 700,000 acres above the average pre-report trade estimate.

Hard red winter wheat seedings also surpassed the average pre-report trade estimate by a half-million acres. White winter wheat seedings came in 200,000 acres below the average pre-report trade guess.


** QUARTERLY GRAIN STOCKS **

  • CORN: 9.642 bil. bu.; traders expected 9.401 bil. bu.
    -- compares to 1.128 bil. bu. Sept. 1; 10.057 bil. bu. Dec. 1, 2010
  • BEANS: 2.366 bil. bu.; traders expected 2.312 bil. bu.
    -- compares to 215 mil. bu. Sept. 1; 2.278 bil. bu. Dec. 1, 2010
  • WHEAT: 1.656 bil. bu.; traders expected 1.679 bil. bu.
    -- compares to 2.150 bil. bu. Sept. 1; 1.933 bil. bu. Dec. 1, 2010

 

It should be no surprise by now, but market watchers were generally not prepared for this Dec. 1 corn stocks estimate. Stocks came in 241 million bu. above the average pre-report trade estimate. With the corn crop estimate just 48 million bu. above the November Crop Production Report, that means corn use was about 200 million bu. slower in the second quarter of the 2011-12 marketing year than traders expected. USDA says, "Corn stored in all positions on Dec. 1, 2011, totaled 9.64 billion bu., down 4% from Dec. 1, 2010. Of the total stocks, 6.18 billion bu., are stored on- farms, down 2% from year earlier. Off-farm stocks, at 3.47 billion bu., are down 8% from year-ago. The Sept.-Nov. 2011 indicated disappearance is 3.84 billion bu., compared with 4.1 billion bu. during the same period last year."

Bean stocks also came in above the average pre-report trade guess. The 10-million-bu. increase in the 2011 bean crop estimate accounts for only a small portion of the bigger than expected stocks, meaning use was about 46 million bu. slower than traders expected. USDA says, "Soybean stocks stored in all positions on Dec. 1, 2011, totaled 2.37 billion bu., up 4% from Dec. 1, 2010. Soybean stocks stored on farm totaled 1.14 billion bu., up 4% from year-ago. Off-farm stocks, at 1.23 billion bu., are up 3% from last December. Indicated disappearance for Sept.-Nov. 2011 totaled 905 million bu., down 25% from the same period a year earlier."

Wheat stocks came in 23 million bu. below the average pre-report trade estimate. USDA says, "All wheat stored in all positions on Dec. 1, 2011, totaled 1.66 billion bu., down 14% from year-ago. On-farm stocks are estimated at 405 million bu., down 26% from last December. Off-farm stocks, at 1.25 billion bu., are down 10% from year-ago. The Sept.-Nov. 2011 indicated disappearance is 490 million bu., down 5% from the same period a year earlier."


** 2011-12 U.S. CARRYOVER **

  • CORN: 846 million bu.; down a tick from Dec. proj. of 848 million bu.
    -- compares to 1.128 billion bu. in 2010-11
  • BEANS: 275 million bu.; up from Dec. proj. of 230 million bu.
    -- compares to 215 million bu. in 2010-11
  • WHEAT: 870 million bu.; down from Dec. proj. of 878 million bu.
    -- compares to 862 million bu. in 2010-11
  • COTTON: 3.7 million bales; up from Dec. proj. of 3.5 mil. bales
    -- compares to 2.6 million bales in 2010-11

 

USDA's forecast of 2011-12 corn carryover came in about 100 million bu. above the average pre-report trade estimate. However, it is actually down 2 million bu. from USDA's Dec. carryover projection. USDA increased the 2011 corn crop by 48 million bu., which was more-than-offset by a 50- million-bu. increase in estimated corn exports, to 1.65 billion bushels. USDA now puts the national average on-farm cash price at $5.70 to $6.70, down 20 cents on both ends of the range from December.

Bean carryover was increased a whopping 45 million bu. from December. Total supplies are up 11 million bu. from last month due to the bigger crop. On the demand side, USDA cut 25 million bu. from projected exports (to 1.275 billion bu.) and 10 million bu. from estimated crush (to 1.615 billion bushels). USDA now puts the national average on-farm cash price at $10.95 to $12.45, which narrows the range by 50 cents from December.

Wheat carryover came in about 40 million bu. above the average pre- report trade estimate. Total supplies were unchanged from December. On the usage side, USDA increased estimated exports by 25 million bu. (to 950 million bu.) and increased seed use by 4 million bu. (to 82 million bushels). USDA cut feed & residual use 15 million bu. (to 145 million bu.) and food use by 5 million bu. (to 935 million bushels). USDA puts the national average on-farm cash wheat price at $6.95 to $7.45, down a dime on both ends of the range from December.

Cotton carryover is now estimated about 300,000 bales above the average pre-report trade estimate. Total supplies were cut 160,000 bales from December, which leads to some steep cuts in demand. USDA cut 300,000 bales from estimated exports (to 11 million bales), and 60,000 bales from unaccounted use (to a negative 20,000 bales). USDA puts the national average on-farm cash cotton price at $0.86 to $0.94, which narrowed the range by 2 cents compared to December.


** 2011-12 GLOBAL CARRYOVER **

  • CORN: 128.14 MMT; up from 127.19 MMT in Dec.
    -- compares to 128.06 MMT in 2010-11
  • BEANS: 63.43 MMT; down from 64.54 MMT in Dec.
    -- compares to 68.58 MMT in 2010-11
  • WHEAT: 210.02 MMT; up from 208.52 MMT in Dec.
    -- compares to 199.94 MMT in 2010-11
  • COTTON: 58.35 mil. bales; up from 57.67 mil. bales in Dec.
    -- compares to 45.35 million bales in 2010-11

** 2011-12 GLOBAL PRODUCTION HIGHLIGHTS **

  • ARGENTINA BEANS: 50.5 MMT; compares to 52.0 MMT in December
    -- compares to 49.0 MMT in 2010-11
  • BRAZIL BEANS: 74.0 MMT; compares to 75.0 MMT in December
    -- compares to 75.5 MMT in 2010-11
  • ARGENTINA WHEAT: 14.5 MMT; compares to 14.5 MMT in December
    -- compares to 16.1 MMT in 2010-11
  • AUSTRALIA WHEAT: 28.3 MMT; compares to 28.3 MMT in December
    -- compares to 27.89 MMT in 2010-11
  • CHINA WHEAT: 117.92 MMT; compares to 117.92 MMT in December
    -- compares to 115.18 MMT in 2010-11
  • CANADA WHEAT: 25.26 MMT; compares to 25.26 MMT in December
    -- compares to 23.17 MMT in 2010-11
  • EU-27 WHEAT: 137.49 MMT; compares to 137.49 MMT in December
    -- compares to 135.67 MMT in 2010-11
  • RUSSIA WHEAT: 56.23 MMT; compares to 56.0 MMT in December
    -- compares to 41.51 MMT in 2010-11
  • FSU-12 WHEAT: 114.18 MMT; compares to 112.45 MMT in December
    -- compares to 81.36 MMT in 2010-11
  • CHINA CORN: 191.75 MMT; compares to 191.75 MMT in December
    -- compares to 177.25 MMT in 2010-11
  • ARGENTINA CORN: 26.0 MMT; compares to 29.0 MMT in December
    -- compares to 22.5 MMT in 2010-11
  • SOUTH AFRICA CORN: 12.5 MMT; compares to 12.5 MMT in December
    -- compares to 10.92 MMT in 2010-11
  • BRAZIL CORN: 61.0 MMT; compares to 61.0 MMT in December
    -- compares to 57.5 MMT in 2010-11
  • CHINA COTTON: 33.5 mil. bales; compares to 33.5 mil. bales in December
    -- compares to 30.5 mil. bales in 2010-11

** WHAT ARE THE CALLS? **

Based on this morning's report data, traders are looking for corn to open 20 to 25 cents lower, soybeans 20 to 25 cents lower and wheat 15 to 20 cents lower.


 

 

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