PF Rection: Friendly Beans, Neutral-Bearish Corn

June 12, 2012 03:29 AM
 

** WINTER WHEAT PRODUCTION **

  • ALL WHEAT: 2.234 billion bu.; trade expected 2.222 billion bu.
    -- compares to 1.999 billion bu. in 2011
  • ALL WINTER WHEAT: 1.684 billion bu.; trade expected 1.650 bil. bu.
    -- compares to 1.494 billion bu. in 2011
  • HRW: 1.024 billion bu.; trade expected 996 million bu.
    -- compares to 780 million bu. in 2011
  • SRW: 428.5 million bu.; trade expected 422 million bu.
    -- compares to 458 million bu. in 2011
  • WHITE WINTER: 231.3 million bu.; trade expected 231 million bu.
    -- compares to 256 million bu. in 2011

 

All winter wheat production came in 34 million bu. above the average, pre-report trade estimate with hard red winter wheat 28 million bu. above the average trade guess. Soft red winter wheat production is just slightly above the average guess and white winter wheat production is in line with the average, pre-report trade expectation.

USDA's all-wheat yield projection now stands at 45.4 bu. per acre, down 0.3 bu. from the May projection. USDA's winter wheat yield estimate stands at 47.3 bu. per acre, down 0.3 bu. from the May estimate.


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

  • CORN: 851 million bu.; unch from May est. of 851 million bu.
    -- compares to 1.128 billion bu. in 2010-11
  • BEANS: 175 million bu.; down from May est. of 210 million bu.
    -- compares to 215 million bu. in 2010-11
  • WHEAT: 728 million bu.; down from May est. of 768 million bu.
    -- compares to 862 million bu. in 2010-11
  • COTTON: 3.2 million bales; down from May est. of 3.4 mil. bales
    -- compares to 2.6 million bales in 2010-11

 

Old-crop corn carryover was unchanged from May, but came in 23 million bu. above the average, pre-report trade estimate. The bigger-than-expected carryover estimate initially weighed on futures a bit as the markets were open when USDA released the new estimates. USDA made no changes on the supply side of the balance sheet, but did increase estimated food, seed and industrial (FSI) use by 50 million bushels. All of that increase went to corn-for-ethanol use, which is now estimated at 5.05 billion bushels. However, USDA also cut 50 million bu. from estimated old-crop corn exports, which are now estimated at 1.650 billion bushels. The USDA analysts must see some of the old-crop export sales already on the books slipping into the new-crop marketing year -- or they may anticipate those sales commitments being filled with 2012-crop corn harvested before September 1. USDA now puts the national average on-farm old-crop cash corn price at $5.95 to $6.25, unchanged from May.

Old-crop soybean carryover was slashed 35 million bu. from May. The new estimate is also nearly 25 million bu. below the average pre-report trade estimate. No changes were made to the supply side of the old-crop soybean balance sheet. USDA raised estimated crush 15 million bu. (to 1.66 billion bu.) and estimated exports 20 million bu. (to 1.335 billion bushels). That accounts for the 35-million-bu. cut to carryover. USDA dropped the national average on-farm cash old-crop bean price a nickel, to $12.30.

Old-crop wheat carryover is down 40 million bu. from May and came in 29 million bu. below the average pre-report trade estimate. Old-crop wheat food use was increased 10 million bu., to 940 million bushels. USDA also increased estimated old-crop exports 30 million bu., to 1.055 billion bushels. The national average on-farm old-crop cash wheat price estimate was unchanged from May at $7.25.

Old-crop cotton carryover is estimated down 200,000 bales from May. USDA increased estimated old-crop cotton exports by 200,000 bales to account for the carryover cut. USDA now puts the national average on-farm cash cotton price at 91 cents, unchanged from May.


** 2012-13 U.S. CARRYOVER **

  • CORN: 1.881 billion bu.; unch from May proj. of 1.881 billion bu.
  • BEANS: 140 million bu.; down from May proj. of 145 million bu.
  • WHEAT: 694 million bu.; down from May proj. of 735 million bu.
  • COTTON: 4.9 million bales; unch from May proj. of 4.9 million bales

 

USDA made absolutely no changes to the balance sheet for new-crop corn from the initial projections in May. USDA even left the average on-farm cash price projection unchanged from last month at $4.20 to $5.00. The projected 2012-crop national average corn yield was left unchanged from May at 166 bu. per acre.

New-crop soybean carryover came in 7 million bu. below the average, pre-report trade estimate and is down 5 million bu. from USDA's May projection. The national average soybean yield projection is unchanged from May at 43.9 bu. per acre. The 35-million-bu. cut to beginning stocks (old-crop carryover) was the only change on the supply-side of the balance sheet. Nearly offsetting that cut was a 10-million-bu. cut to projected crush; and a 20-million-bu. cut to projected new-crop exports. USDA left the national average on-farm cash price projection at $12.00 to $14.00 for new-crop beans -- unchanged from May.

New-crop wheat carryover is projected down 41 million bu. from May with lower beginning stocks and lower production cutting total supply 51 million bu. from last month. Partially offsetting the supply cut was a 10-million-bu. cut to projected new-crop wheat feed & residual use (to 220 million bushels). The national average on-farm cash price projection for new-crop wheat is now put at $5.60 to $6.80, up a dime on both ends of the range from May.

New-crop cotton supplies were cut 200,000 bales from May (smaller beginning stocks). That was completely offset by a 200,000-bale cut to projected exports. USDA now puts the national average on-farm cash new-crop cotton price at 60 cents to 80 cents, down a nickel on both ends of the range from May.



** 2011-12 GLOBAL CARRYOVER **
  • CORN: 129.19 MMT; up from May proj. of 127.56 MMT
    -- projection of 155.74 MMT for 2012-13; up from 152.34 MMT in May
  • BEANS: 53.36 MMT; up slightly from May proj. of 53.24 MMT
    -- projection of 58.54 MMT for 2012-13; up from 58.07 MMT in May
  • WHEAT: 195.56 MMT; down from May proj. of 197.03 MMT
    -- projection of 185.76 MMT for 2012-13; down from 188.13 MMT in May
  • COTTON: 67.32 mil. bales; up from May proj. of 66.88 mil. bales
    -- projection of 74.51 mil. bales for 2012-13; up from 73.75 mil. bales in May

** 2011-12 GLOBAL PRODUCTION HIGHLIGHTS **

  • ARGENTINA BEANS: 41.5 MMT; compares to 42.5 MMT in May
    -- projection of 55.0 MMT for 2012-13 =
  • BRAZIL BEANS: 65.5 MMT; compares to 65.0 MMT in May
    -- projection of 78.0 MMT for 2012-13
  • ARGENTINA WHEAT: 14.5 MMT; compares to 14.5 MMT in May
    -- projection of 12.0 MMT for 2012-13
  • AUSTRALIA WHEAT: 29.5 MMT; compares to 29.5 MMT in May
    -- projection of 26.0 MMT for 2012-13
  • CHINA WHEAT: 117.4 MMT; compares to 117.92 MMT in May
    -- projection of 120.0 MMT for 2012-13
  • CANADA WHEAT: 25.26 MMT; compares to 25.26 MMT in May
    -- projection of 27.0 MMT for 2012-13
  • EU-27 WHEAT: 137.38 MMT; compares to 137.38 MMT in May
    -- projection of 131.01 MMT for 2012-13; down from 132.0 MMT in May
  • RUSSIA WHEAT: 56.23 MMT; compares to 56.23 MMT in May
    -- projection of 53.0 MMT for 2012-13; down from 56.0 MMT in May
  • FSU-12 WHEAT: 114.42 MMT; compares to 114.42 MMT in May
    -- projection of 94.76 MMT for 2012-13; down from 97.76 MMT in May
  • CHINA CORN: 192.78 MMT; compares to 191.75 MMT in May
    -- projection of 195.0 MMT for 2012-13; compares to 193.0 MMT in May
  • ARGENTINA CORN: 21.0 MMT; compares to 21.5 MMT in May
    -- projection of 25.0 MMT for 2012-13
  • SOUTH AFRICA CORN: 11.5 MMT; compares to 11.5 MMT in May
    -- projection of 13.0 MMT for 2012-13
  • BRAZIL CORN: 69.0 MMT; compares to 67.0 MMT in May
    -- projection of 67.0 MMT for 2012-13
  • CHINA COTTON: 33.5 mil. bales; compares to 33.5 mil. bales in May
    -- projection of 30.5 mil. bales for 2012-13

** MARKET REACTION **

Ahead of the reports, corn futures were trading 6 to 9 cents lower and after some initial price pressure, they are trading back in that range. July corn futures have firmed a bit and are trading about 3 1/2 cents lower at this time.

Soybean futures ahead of the report were trading 3 to 11 cents higher and have backed off after the reports to trade 2 to 5 1/2 cents higher.

Chicago wheat futures ahead of the reports were trading 2 to 5 cents higher and are now trading 2 1/2 to 8 cents lower with the steepest declines in spring 2013 contracts.


  

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