USDA Boosts Export Estimates

February 28, 2012 09:59 PM

Prospects for corn and soybean prices have turned brighter. "The cuts in the South American crops could send markets higher," say Iowa State University economists in their analysis of USDA’s Feb. 9 supply and demand report.

In the short run, USDA changed little in corn and soybean market price expectations, with the mid-point corn price farmers receive projected at $6.20 per bushel for the 2011/12 marketing year and $11.70 per bushel for the season-average soybean crop. The outlook for U.S. exports improved, however, with USDA’s monthly World Agricultural Supply and Demand Estimates (WASDE) report calling for lower global supplies for corn and soybeans than the department forecasted just a month earlier.

For corn, USDA projects U.S. exports to be 50 million bushels higher, with corn ending stocks 45 million bushels lower at 801 million. Total global coarse grain supplies for 2011/12 are projected to be 3.1 million tons lower.

p83 USDA Boosts Export Estimates chart

USDA left the U.S. soybean supply and use projections for 2011/12 unchanged from its January report. Soybean exports are projected at 1.275 billion bushels, down 226 million from this past year. Soybean export commitments through January trail this past year’s pace by more than 226 million bushels. Even so, lower soybean crop forecasts and reduced export projections for South America are expected to be offset by addi-tional U.S. sales and exports during the second half of the marketing year, USDA says.

"The big changes were for the South American crops," the Iowa economists conclude in their analysis of the report. USDA’s projection for Argentine corn was lowered 15% to 22 million tons, which would put Argentina’s corn production below 2011’s level. For soybeans, the three major South American producers (Argentina, Brazil and Paraguay) are all forecasted to have lower production. Paraguay’s output is predicted to fall by double digits: 16%. Overall, the South American soybean crop looks to be 5% lower than 2011.

For wheat, WASDE lowered 2011/12 ending U.S. stocks to 845 million bushels and increased exports by 25 million bushels, particularly for competitively priced feed-quality wheat. USDA boosts the 2011/12 projected season-average farm price 20¢ on the bottom end of the range: $7.15 to $7.45 per bushel. However, it raised global ending stocks for 2011/12 by 3.1 million tons to a record 213.1 million, based on increased production for India, Kazakhstan and Morocco. As
projected, 2011/12 global wheat stocks will be 2.4 million tons higher than the previous record in 1999/2000.

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