USDA S/D Highlights: US Corn Exports Trimmed, Beans Boosted More than 200 Mil. Bu.

October 11, 2012 03:41 AM

via a special arrangement with Informa Economics, Inc.

Wheat | Corn | Soybeans | Cotton | Sugar | Livestock/Products

NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.

Following are highlights from USDA’s Supply/Demand report issued this morning (link):

--------------------- CORN ---------------------

Slightly lower US corn crop:  Forecast corn production for 2012/13 is lowered 21 million bushels with higher area more than offset by lower yields. The U.S. corn yield is forecast at 122.0 bushels per acre, down 0.8 bushels from the previous month. Lower yields in Illinois are only partly offset by increases for Minnesota and North Dakota. Forecast sorghum production is raised 6 million bushels with higher yields for Texas and Arkansas

Export expectations trimmed: U.S. corn use for 2012/13 is lowered with a 100-million-bushel reduction in projected exports. Corn exports are lowered based on the slow pace of sales to date and strong competition from Brazil. Corn ending stocks for 2012/13 are projected 114 million bushels lower at 619 million.

Lower price forecast: The season-average farm price for corn is lowered 10 cents on both ends of the range to $7.10 to $8.50 per bushel based on early season cash and futures prices and prices available for forward delivery through early 2013.

Global highlights:

  • Coarse grain supplies for 2012/13 are projected 11.0 million tons lower mostly reflecting reduced corn beginning stocks in the United States and Brazil. Brazil beginning stocks are lowered with 2011/12 exports increased 4.5 million tons.

  • Corn production for 2012/13 is lowered 2.0 million tons with reductions for EU-27, Serbia, and the United States

  • Global 2012/13 corn exports are lowered 1.1 million tons this month with the U.S. reduction partly offset by a 1.0-million-ton increase for Brazil and a 0.5-million-ton increase for India. Imports for EU-27 are raised 2.0 million tons with the smaller crop. Global corn feeding is down 1.4 million tons.

--------------------- SOYBEANS ---------------------

Midwest yields trim soybean crop: Soybean production is forecast at 2.860 billion bushels, up 226 million based on higher harvested area and yield. Harvested area is raised 1.1 million acres to 75.7 million. The soybean yield is projected at 37.8 bushels per acre, up 2.5. Soybean supplies for 2012/13 are projected 10 percent above last month on both increased production and beginning stocks.

Export pace factor in raised forecast: U.S. soybean exports for 2012/13 are raised 210 million bushels to 1.265 billion reflecting increased supplies, lower prices, and the record pace of export sales through early October.

More meal exports: Soybean crush is raised 40 million bushels to 1.540 billion mostly due to increased soybean meal exports and increased soybean supplies. Soybean crush is also supported by an increase in domestic disappearance of soybean oil which reflects the impact of the increase of the biodiesel mandate for 2013 recently announced by the Environmental Protection Agency.

Soybean stocks up, prices seen down: Soybean ending stocks are projected at 130 million bushels, up 15 million from last month. Prices for soybeans and products are all reduced this month. The U.S. season-average soybean price range for 2012/13 is projected at $14.25 to $16.25 per bushel, down $0.75 on both ends of the range. The soybean meal price is projected at $470 to $500 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 53 to 57 cents per pound, down 1 cent on both ends.

Global highlights:

  • Revisions to the world 2012/13 oilseeds estimates include reduced soybean exports for Brazil and Argentina, increased soybean imports for China and Mexico, and increased soybean crush for Argentina, China, and Mexico. Lower rapeseed exports for Canada and Australia are partly offset by reduced imports for several countries including China, EU-27, Japan, and Mexico.

  • Global oilseed stocks for 2012/13 are increased 3.6 million tons to 64 million. Soybeans account for most of the change, with higher stocks in Argentina, Brazil, China, and the United States.

--------------------- WHEAT ---------------------

More US feed residual use: Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports. Exports are lowered 50 million bushels on the pace of shipments and sales to date and stronger expected competition. Export projections are lowered for Hard Red Winter and Soft Red Winter wheat.

Narrower price range: The projected range for the 2012/13 season-average farm price is narrowed 15 cents on both ends to $7.65 to $8.55 per bushel.

Global highlights:

  • Production for Australia is lowered 3.0 million tons as a continuation of dryness through September during critical flowering and grain fill stages has reduced yield potential for this year’s crop.

  • Production for Russia is lowered 1.0 million tons reflecting the latest harvest reports that indicate lower yields and harvested area for spring wheat.

  • Production is lowered 0.8 million tons for EU-27 mostly reflecting a reduction for the United Kingdom where excessive harvest-time rainfall has reduced production.

  • Global wheat consumption for 2012/13 is lowered 2.4 million tons as higher feed and residual  use in the United States, Canada, and EU-27 is offset by lower wheat feeding for Russia, lower food use for India, and the reduction in Thailand and Vietnam consumption driven by reduced Australia production and exports.

  • Australia exports are lowered 3.0 million tons for the 2012/13 local October-September marketing year and raised 1.0 million tons for the 2011/12 local year. Most of the reduction for 2012/13 is expected after June 2013 maintaining substantial competition for U.S. exports during the remainder of the 2012/13 June-May U.S. marketing year.

  • Global wheat exports for 2012/13 are lowered 4.0 million tons with the Australia and U.S. reductions, and reductions of 1.0 million tons and 0.5 million tons, respectively, for EU-27 and Canada. Increases of 1.0 million tons each for India and Russia are partly offsetting.

  • World ending stocks for 2012/13 are projected 3.7 million tons lower mostly reflecting reductions for Australia, the United States, and Russia.

--------------------- COTTON ---------------------

US production rises:  Production is raised 178,000 bales from last month to 17.3 million, due mainly to increases in the Mississippi Delta states. Domestic mill use is unchanged, but exports are reduced based on lower forecast imports by China. The forecast range for the 2012/13 marketing year average price received by producers of 62 to 74 cents per pound is lowered 4 cents on the upper end of the range, reflecting lower prices in recent months. In addition, the final 2011/12 marketing year average price is pegged at 88.3 cents per pound.

Global highlights:

  • A combination of sharply higher production and reduced consumption raises projected 2012/13 world ending stocks by 2.6 million bales this month. Production is raised mainly in India, China, Brazil, Pakistan, and the United States.

  • Consumption is reduced 2.0 million bales for China as the high domestic support price continues to erode offtake. However, about three-fourths of the China reduction is offset by increased spinning use in other countries with access to lower cost raw material, including India, Turkey, Pakistan, Indonesia, Taiwan, and Vietnam.

  • World trade is reduced marginally as a reduction of 1.0 million bales in China’s imports is mostly offset by increases for other countries. World stocks are raised to 79.1 million bales, including 37 million bales projected for China.

--------------------- LIVESTOCK, DAIRY & POULTRY ---------------------

More meat output:  2013 red meat and poultry production is raised slightly as higher pork and poultry production more than offsets lower beef production. Lower expected cattle placements in the third quarter will manifest itself as slightly lower supplies of fed cattle in early 2013.

H&P signals on production: The recent Quarterly Hogs and Pigs report estimated a small decline in the June-August pig crop and indicated that producers intend to reduce farrowings through early 2013, but it is expected that continued growth in pigs per litter will mitigate much of the decline in farrowings.

2012 shifts: For 2012, the total meat production forecast is reduced on lower beef and broiler production forecasts, although pork and turkey are forecast higher.

Trade forecasts: Beef imports are reduced for 2012 based on a slower pace of imports from Canada, but are unchanged for 2013. Beef exports are unchanged for 2012 and 2013. Pork exports are unchanged for 2012, but are raised slightly on expected late 2013 improvements in sales. Imports are reduced slightly for 2013. Poultry export forecasts are unchanged for both 2012 and 2013.

Little change in prices: Only small changes are made to 2012 livestock and poultry prices, generally reflecting small adjustments to fourth-quarter prices while cattle and hog prices for 2013 are unchanged, but the broiler price is tightened at both ends of the range and the turkey price is lowered at the high end of the range.

Less milk: The 2012 milk production forecast is reduced from last month, as slower growth in milk per cow more than offsets a slower expected decline in cow numbers. Higher forecast milk prices in late 2012 and into 2013 are expected to slow the rate of decline in cow numbers and help support higher growth in milk per cow in 2013. Thus, the production forecast for 2013 is raised. The all milk price is forecast at $18.50 to $18.60 per cwt for 2012 and $19.00 to $19.90 per cwt for 2013.

--------------------- SUGAR ---------------------

More US supply: Projected U.S. sugar supply for fiscal year 2012/13 is increased 122,000 short tons, raw value, compared with last month, due to higher carry-in stocks and a small increase in imports from Mexico. The increase in 2011/12 ending inventories is a result of higher-than-expected production and lower total use more than offsetting lower imports. These 2011/12 changes are mainly the result of end-of-year final estimates. For 2012/13, U.S. exports are increased 25,000 tons, in line with an increase in Mexico’s imports. For Mexico, higher 2012/13 carryin stocks and imports are nearly offset by higher expected deliveries of sugar for the products re-export program.



NOTE: This column is copyrighted material, therefore reproduction or retransmission is prohibited under U.S. copyright laws.






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