Ending stocks for 2011/12 corn were increased by 118 mil. bu. to 1.021 bil., roughly 75 mil. bu. above expectations as the higher prices are causing demand to slip. Both corn used in the production of ethanol and exports were cut by 50 mil. bu. while food, seed, and industrial usage was cut 20 mil. bu. Corn production was slashed nearly 2.2 bil bu. to 10.779 bil., nearly 200 mil. bu. below expectations.
Harvested acres were cut by nearly 1.5 mil. while the average yield est. was cut from 146 t0 123.4. As a result of the lower production, the usage forecast was cut by nearly 1.5 bil. bu. while imports were increased from 45 mil. bu. to 75 mil. bu. Feed usage was cut 725 mil. bu. to 4.075 bil., the lowest figure since 1988/89. Corn used in the production of ethanol was cut 400 mil. bu. to 4.5 bil. the lowest level in 4 years. Exports were cut 300 mil. bu. to 1.3 bil. bu. the lowest level since 1985/86.
The biggest questions moving forward are:
# 1 – Is $8.25 corn a high enough price to cut demand 1.5 bil. bu. ?
# 2 – how much more will this year’s corn crop be cut?
There were long term revisions to the global balance sheets. 2010/11 world ending stocks were revised up by 3 mmt, 2011/12 ending stocks were increased by 6.5 mmt, while 2012/13 ending stocks were cut 11 mmt to 123 mmt, the lowest level in 6 years.
Soybean stocks for 2011/12 were cut 25 mil. bu. to 145 mil. slightly below expectations. Crush was increased by 15 mil. bu. while exports were increased by only 10 mil. bu. Soybean production for 2012 was slashed 358 mil. bu. to 2.692 bil. nearly 100 mil. bu. below expectations. Harvested acre’s were cut by 680 thousand while the average yield was cut by 4.4 bpa to 36.1, the lowest in 9 years. As a result of the lower production, the usage forecast was slashed 363 mil. bu. leaving total demand at 2.742 bil. bu., the lowest in 9 years.
Crush was cut by 95 mil. bu. while exports were cut by 240 mil. bu. Ending stocks are forecast at 115 mil. bu., with the stocks/use ratio at 4.2%, the lowest in at least 30 years. World soybean ending stocks for 2012/13 were cut just over 2 mmt to 53.4 mmt, the lowest in 3 years. Like corn, the biggest questions in soybeans are 1 – is $16.50 a high enough price level to cut demand by the projected amount. 2 – will production go down further in future reports ?
Total US wheat production was increased by 44 mil. bu. to 2.268 bil. bu., nearly 50 mil. bu above expectations. Winter wheat production was increased by 13 mil. bu. while spring wheat was increased by 28 mil. bu. Feed demand for 2012/13 was increased 20 mil. bu. to 220 mil. leaving ending stocks at 698 mil. bu. up 34 mil. from last month and nearly 20 mil. bu. above expectations. Despite the lower US stocks, world wheat ending stocks declined by just over 5 mmt to 177.2, the lowest in the past 4 years. The biggest changes in world production was in Eastern Europe as Russian production was cut 6 mmt , Kazakstan was cut 2 mmt, while production in Ukraine was increased by 2 mmt.