PF Reaction to May USDA Reports

May 10, 2013 06:41 AM
 

MARKET REACTION

Immediately following the release of the reports, trade turned extremely choppy across the grains. Corn prices slipped just a bit from pre-report action; soybeans have returned to pre-report levels after an initial price drop; and wheat futures have extended losses from pre-report levels.

WINTER WHEAT PRODUCTION

ALL WHEAT: 2.057 billion bu.; trade expected 2.059 billion bu.
-- compares to 2.269 billion bu. in 2012
ALL WINTER WHEAT: 1.486 billion bu.; trade expected 1.477 bil. bu.
-- compares to 1.645 billion bu. in 2012
HRW: 768 million bu.; trade expected 765 million bu.
-- compares to 1.004 billion bu. in 2012
SRW: 501 million bu.; trade expected 496 million bu.
-- compares to 420 million bu. in 2012
WHITE WINTER: 217 million bu.; trade expected 217 million bu.
-- compares to 222 million bu. in 2012

The average pre-report trade estimates were very close to actual production estimates from USDA. The first survey-based winter wheat crop estimate of the year came in slightly above the average pre-report trade estimate. The all-winter wheat average yield is estimated at 45.4 bu. per acre, which compares to 47.2 bu. per acre last year.

The HRW crop estimate is just 3 million bu above the average trade guess. The Kansas wheat crop is estimated at 299.7 million bu., down 82.5 million bu. from last year.

2012-13 U.S. CARRYOVER

CORN: 759 million bu.; up from April proj. of 757 million bu.
-- compares to 989 million bu. in 2011-12
BEANS: 125 million bu.; unch from April proj. of 125 million bu.
-- compares to 169 million bu. in 2011-12
WHEAT: 731 million bu.; unch from April proj. of 731 million bu.
-- compares to 743 million bu. in 2011-12
COTTON: 4.0 million bales; down from April proj. of 4.2 million bales
-- compares to 3.35 million bales in 2011-12

The old-crop corn carryover is up just 2 million bu. from last month. Total old-crop use is estimated down 2 million bu. from last month. USDA left the feed & residual estimate unchanged from April, but increased food, seed & industrial use by 48 million bushels (corn-for-ethanol is included in this category and was increased 50 million bu. from last month, indicating a drop in "other" FSI use). The increase in FSI was more than offset by another 50-million-bu. cut to estimated corn exports, which now stand at 750 million bushels. USDA now puts the national average old-crop on-farm cash corn price at $6.70 to $7.10, up a nickel on both ends of the range from last month.

The old-crop soybean carryover is unchanged from last month and USDA made no changes on the old-crop soybean balance sheet. USDA now puts the national average old-crop on-farm cash soybean price at $14.30, unchanged from last month.

Old-crop wheat carryover is unchanged from last month. However, USDA cut total supplies by 5 million bu., by way of a 5-million-bu. cut in imports to 125 million bushels. On the supply side, USDA increased estimated food use by 5 million bu., to 946 million bushels. USDA now puts the national average old-crop on-farm cash wheat price at $7.80, unchanged from last month.

Old-crop cotton carryover is estimated down 200,000 bales from last month. USDA's final cotton production estimate for the 2012 crop is 17.32 million bu., up 30,000 bales from last month. On the demand side, USDA increased estimated exports 250,000 bales and cut unaccounted use by 30,000 bales. USDA now puts the national average old-crop on-farm cotton price at 72 cents, up a half cent from the mid-point of last month's price range.

2013-14 U.S. CARRYOVER

CORN: 2.004 billion bu.; trade expected 1.973 billion bu.
BEANS: 265 million bu.; trade expected 239 million bu.
WHEAT: 670 million bu.; trade expected 627 million bu.
COTTON: 3.0 million bales; trade expected 4.0 million bales

USDA projects a national average corn yield of just 158 bu. per acre. This compares to the trendline yield of 163.6 bu. per acre revealed at the Ag Outlook Forum in February. Total supply is projected up 3.03 billion bu. from 2012-13, at 14.924 billion bushels. Total use is projected up 1.785 billion bu., to 12.920 billion bushels. USDA sees feed & residual use of 5.325 billion bu. in the upcoming marketing year, a 925-million-bu. increase from the current marketing year. Corn-for-ethanol use is expected at 4.85 billion bu., up 250 million bu. from this year. Total FSI use is expected at 6.295 billion bu., up 310 million bu. from this year. New-crop corn exports are projected at 1.3 billion bu., a considerable increase of 550 million bu. from this year. USDA's first 2013-14 national average on-farm cash corn price projection is $4.30 to $5.10.

USDA projects a national average soybean yield of 44.5 bu. per acre, up 4.9 bu. from last year. Total supply is projected up 326 million bu. from the current marketing year. Total use is expected to increase 184 million bushels. USDA sees 2013-14 soybean crush of 1.695 billion bu., up 60 million bu. from this year. Expected exports are projected at 1.450 billion bu., up 100 million bu. from the current marketing year. USDA's first look at the 2013-14 national average on-farm cash price is $9.50 to $11.50.

USDA projects a national average all wheat yield of 44.1 bu. per acre, down 2.2 bu. per acre from last year. Total supply is down 220 million bu. from last year, at 2.917 billion bushels. Total use is projected down 159 million bu. from the current marketing year, at 2.247 billion bushels. USDA's first look at the 2013-14 national average on-farm cash wheat price is $6.15 to $7.45.

2012-13 GLOBAL CARRYOVER

CORN: 125.43 MMT; up from April proj. of 125.29 MMT
-- projection of 154.63 MMT for 2013-14
BEANS: 62.46 MMT; down from April proj. of 62.63 MMT
-- projection of 74.96 MMT for 2013-14
WHEAT: MMT; 180.17 down from April proj. of 182.26 MMT
-- projection of 186.38 MMT for 2013-14
COTTON: 84.78 mil. bales; up from April proj. of 82.45 mil. bales
-- projection of 92.74 million bales for 2013-14

2012-13 GLOBAL PRODUCTION HIGHLIGHTS

ARGENTINA BEANS: 51.0 MMT; compares to 51.5 MMT in April
-- projection of 54.5 MMT for 2013-14
BRAZIL BEANS: 83.5 MMT; compares to 83.5 MMT in April
-- projection of 85.0 MMT for 2013-14
ARGENTINA WHEAT: 11.0 MMT; compares to 11.0 MMT in April
-- projection of 13.0 MMT for 2013-14
AUSTRALIA WHEAT: 22.08 MMT; compares to 22.0 MMT in April
-- projection of 24.5 MMT for 2013-14
CHINA WHEAT: 120.6 MMT; compares to 120.6 MMT in April
-- projection of 121.0 MMT for 2013-14
CANADA WHEAT: 27.2 MMT; compares to 27.2 MMT in April
-- projection of 29.0 MMT for 2013-14
EU-27 WHEAT: 132.06 MMT; compares to 132.01 MMT in April
-- projection of 138.77 MMT for 2013-14
RUSSIA WHEAT: 37.72 MMT; compares to 37.72 MMT in April
-- projection of 56.0 MMT for 2013-14
FSU-12 WHEAT: 77.21 MMT; compares to 77.21 MMT in April
-- projection of 107.09 MMT for 2013-14
CHINA CORN: 208 MMT; compares to 208.0 MMT in April
-- projection of 212 MMT for 2013-14
ARGENTINA CORN: 26.5 MMT; compares to 26.5 MMT in April
-- projection of 27.0 MMT for 2013-14
SOUTH AFRICA CORN: 12.2 MMT; compares to 12.5 MMT in April
-- projection of 13.0 MMT for 2013-14
BRAZIL CORN: 76.0 MMT; compares to 74.0 MMT in April
-- projection of 72.0 MMT for 2013-14
CHINA COTTON: 35.0 mil. bales; compares to 35.0 mil. bales in April
-- projection of 34.0 million bales for 2013-14

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