WASDE October Coarse Grain Stocks Lowered

October 8, 2010 02:38 AM

 COARSE GRAINS: U.S. feed grain production for 2010/11 is projected lower this month based on reduced forecasts for corn and sorghum and smaller production estimates for barley and oats from the Small Grains 2010 Summary report.

Corn production is forecast 496 million bushels lower as a 258,000-acre increase in harvested area is more than offset by a 6.7-bushel-per-acre reduction in yield. As forecast, this year’s yield and production still would be the third highest on record.

Higher 2010/11 corn beginning stocks raise prospects for 2010/11 feed and residual disappearance, especially during the September-December quarter. Ending stocks for 2009/10 are raised 322 million bushels based on the September 1 stocks estimate. Larger-than-expected carryout of old-crop corn combined with an unusually early start to this year’s harvesting suggest heavy new-crop corn use before the September 1 beginning of the 2010/11 marketing year. Individual state harvest progress reports suggest that 600-700 million bushels of corn were harvested across the South, Southern Plains, and southern Corn Belt before September 1. This is about double the level of the preceding 2 years and similar to what happened between the 2006/07 and 2007/08 marketing years.
New-crop corn usage ahead of September 1, 2007, lowered feed and residual disappearance during the June-August quarter of 2006/07 and boosted feed and residual disappearance during the September-December quarter of 2007/08.
Despite the increase in 2010/11 beginning stocks, lower forecast production and higher projected domestic disappearance leave ending stocks down sharply from last month. Feed and residual use for 2010/11 is projected 150 million bushels higher reflecting the expected impact of new-crop corn usage before September 1 on indicated disappearance during the current marketing year. Exports are lowered 100 million bushels with tighter available supplies, higher prices, and increased competition from Argentina. U.S. ending stocks for 2010/11 are projected 214 million bushels lower at 902 million. The season-average farm price is projected at $4.60 to $5.40 per bushel, up 60 cents on both ends of the range.
A number of changes are made this month to 2009/10 corn usage with the biggest a 358-million bushel reduction in feed and residual use as indicated by the September 1 stocks and small upward revisions to exports and food, seed, and industrial (FSI) use based on the latest available data. Sorghum FSI use and exports for 2009/10 are also lowered slightly this month. Changes to 2009/10 feed and residual use for barley and oats reflect small revisions to June 1 stocks from the September 30 Grain Stocks report.
Global coarse grain supplies for 2010/11 are nearly unchanged with lower U.S. supplies offset by increased foreign coarse grain production. World corn production is lowered 6.4 million tons with the lower U.S. production and a 0.5-million-ton reduction for Russia only partly offset by increases for Argentina, Serbia, EU-27, and several Sub-Saharan Africa countries. Production for Argentina is raised 4.0 million tons on higher expected area as rising corn prices and favorable early season soil moisture support a rapid pace of early corn planting. Global barley production is lowered 1.4 million tons with reductions of 0.7 million tons for EU-27, 0.5 million tons for Russia, and 0.3 million tons for Canada.
Global coarse grain exports for 2010/11 are increased this month mostly reflecting higher expected corn exports from Argentina, which are raised 3.5 million tons, along with small increases for Paraguay, Mexico, and Zambia. Corn imports are increased for Turkey, Colombia, Indonesia, and South Korea supporting higher expected corn feeding in these countries. Global corn ending stocks for 2010/11 are projected 3.2 million tons lower this month despite increases for Argentina, EU-27, Zambia, and Iran. The reduction in U.S. corn ending stocks outweighs these increases.
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