WASDE Report for 7/12/11

Published on: 09:12AM Jul 12, 2011

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WASDE Reprort for 7/12/11

9am Opening call: Corn 5 cents higher, soybeans 5 cents lower, and wheat unchanged.

Note: This report adopts U.S. area, yield, and production forecasts for winter wheat, durum, other spring wheat, barley, and oats released today

by the National Agricultural Statistics Service (NASS). For rice, corn, sorghum, soybeans, and cotton, area estimates reflect the June 30 NASS

Acreage report, and methods used to project production are noted on each table. The first survey-based 2011 production forecasts for those

crops will be reported by NASS on August 11 and will be included in that day's issue of this report.

OILSEEDS: U.S. oilseed production for 2011/12 is projected at 96.3 million tons, down 2.3 million tons from last month, with lower soybean

production accounting for most of the change. Soybean production is projected at 3.225 billion bushels, down 60 million due to reduced

harvested area. Harvested area, estimated at 74.3 million acres in the June 30 Acreage report, is 1.4 million below the June projection. The

soybean yield is projected at 43.4 bushels per acre, unchanged from last month. Soybean supplies are 40 million bushels below last month=s

forecast as higher beginning stocks partly offset lower production. Exports for 2011/12 are reduced 25 million bushels to 1.495 billion reflecting
lower U.S. supplies, increased supplies in South America this fall, and reduced global imports. U.S. soybean ending stocks are projected at 175

million bushels, down 15 million.

U.S. soybean exports for 2010/11 are projected at 1.52 billion bushels, down 20 million from last month in part reflecting lower projected imports for China. Soybean ending stocks for 2010/11 are projected at 200 million bushels, up 20 million.

The 2011/12 U.S. season-average soybean price is projected at a record $12.00 to $14.00 per bushel, down $1.00 on both ends of the range.

Soybean meal prices are projected at $345 to $375 per short ton, down $30 on both ends of the range. Soybean oil prices are projected at 54 to

58 cents per pound, down 4 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 455.5 million tons, down 1.4

million from last month. Lower soybean, peanut, and rapeseed production estimates are only partly offset by increases for sunflowerseed. Global

soybean production is projected at 261.5 million tons, down 1.3 million mostly due to lower production in the United States. Higher soybean

production for Russia resulting from increased area partly offsets the U.S. reduction. Rapeseed production is reduced for Canada due
to lower harvested area. Despite a record planted area estimate reported by Statistics Canada based on producer surveys conducted in late

May and early June, much of the intended area in southeast Saskatchewan and southwest Manitoba did not get planted due to excessive

moisture through late June. As a result, the Canada rapeseed crop is projected at 12.6 million tons, down 0.4 million from last month. Other

changes include increased rapeseed production for Russia, increased sunflowerseed production for Russia and Ukraine, and reduced canola,

cottonseed, and peanut production for the United States.

WHEAT: U.S. wheat supplies for 2011/12 are raised 90 million bushels as higher carryin and production more than offset reductions in imports

and higher use. Beginning stocks are raised 52 million bushels mostly reflecting higher estimated carryout for 2010/11 as reported in the June 30

Grain Stocks report. Production for 2011/12 is forecast at 2,106 million bushels, up 48 million from last month as higher winter wheat production

and higher forecast yields for durum and other spring wheat more than offset lower area as estimated in the June 30 Acreage report. Partly

ffsetting is a 10-millionbushel reduction in projected imports with lower expected supplies in Canada.

U.S. wheat usage for 2011/12 is raised with a shift in expected seed usage from 2010/11 and higher expected exports compared with last

month. Seed use for 2011/12 is raised 7 million bushels as late planting in the Northern Plains shifted seed usage for the 2011 crop into the

2011/12 marketing year which began June 1. Exports are raised 100 million bushels with larger domestic supplies and reduced competition

expected from Canada.

Ending stocks are projected 17 million bushels lower at 670 million. While ending stocks remain adequate for most

classes of wheat, durum stocks are projected to be especially tight with sharply lower area and production this year. The 2011/12 season-average farm price for all wheat is lowered 40 cents on each end of the projected range to $6.60 to $8.00 per bushel, mostly reflecting the sharp drop in projected corn prices this month.

Global wheat supplies for 2011/12 are projected 0.9 million tons higher as larger beginning stocks more than offset lower expected world production. Larger carryin in the United States and Russia accounts for most of the increase in 2011/12 world beginning stocks. Revisions to 2010/11 trade and usage for a number of other countries, based on the latest data, also affect world beginning stocks for 2011/12.

World wheat production for 2011/12 is projected down 1.9 million tons with reductions in Canada, Ukraine, and Mexico, more than offsetting increases for the United States, Turkey, and EU-27. Canada production is lowered 3.5 million tons as persistent heavy rains and flooding well into the second half of June limited planting opportunities for spring wheat in southeast Saskatchewan and southwest Manitoba. Production is lowered 1.0 million tons for Ukraine as persistent spring dryness in north central areas of the country stressed developing plants and appears to have limited vegetative growth and tillering. Production is lowered 0.4 million tons for Mexico based on the latest official reports. Turkey production is raised 1.1 million tons as bundant spring moisture boosted yields across the country. EU-27 production is raised 0.6 million tons as higher yields for Spain and Romania more than offset a reduction for Hungary. Global wheat exports for 2011/12 are projected 2.4 million tons higher, mostly with higher expectedexports from the United States and Russia. Imports are raised for EU-27, Egypt, Mexico, Japan, Sri Lanka, Malaysia, and Yemen. Partly offsetting are import reductions for the United States, South Korea, and Vietnam. Exports are raised for Russia as relatively low prices make Russian wheat competitive into North Africa and Middle East markets. Exports are also raised for Turkey with larger production. Exports are lowered for Ukraine reflecting the smaller expected crop. Lower exports from Canada are more than offset by higher exports from the United States. Global 2011/12 wheat consumption is raised 3.0 million tons, mostly reflecting higher wheat feeding in EU-27, Russia, and Turkey, higher food use in Egypt, Japan, and Russia, and higher industrial use in Canada. Partly offsetting these increases are reductions in wheat feeding in Australia, Canada, and South Korea. Global ending stocks are projected 2.1 million tons lower with most of the decline expected in the Russia, Canada, and the United States.

COARSE GRAINS: U.S. feed grain supplies for 2011/12 are projected higher this month mostly with higher expected beginning stocks and

production for corn. Corn beginning stocks are raised 150 million bushels reflecting changes to 2010/11 usage projections. Corn production for

2011/12 is projected 270 million bushels higher based on planted and harvested area as reported in the Acreage report. Feed and residual use

for 2011/12 is raised 50 million bushels with larger supplies and lower expected prices. Corn use for ethanol is raised 100 million bushels with

larger supplies and an improved outlook for ethanol producer margins. Exports are raised 100 million bushels mostly reflecting increased

demand from China. Ending stocks for 2011/12 are projected 175 million bushels higher at 870 million. The 2011/12 season-average farm price

for corn is projected at a record $5.50 to $6.50 per bushel, down 50 cents on both ends of the range.

Lower production for the other U.S. feed grains for 2011/12 mostly reflect lower estimated area from the Acreage report, which is partly offset by higher forecast yields for barley. Oats yields are lowered. Domestic use is projected lower for sorghum and oats, and sorghum exports are lowered. Projected farm prices are lowered for sorghum, barley, and oats.

Total U.S. corn use for 2010/11 is projected 145 million bushels lower mostly reflecting the larger-than expected June 1 stocks estimate. Feed and residual use is lowered 150 million bushels. Ethanol use is raised 50 million bushels with larger supplies and improved ethanol producer margins. Partly offsetting is a 20-million-bushel reduction in use for sweeteners reflecting slower demand from Mexico. Corn exports are lowered 25 million bushels based on the slower-than-expected pace of shipments in recent weeks. Imports are raised 5 million bushels with continued strong shipments from Canada. Ending stocks for 2010/11 are raised 150 million bushels to 880 million. The season-average farm price is projected at $5.15 to $5.35 per bushel compared with $5.20 to $5.50 last month.

Global coarse grain supplies for 2011/12 are projected 10.3 million tons higher mostly on higher corn beginning stocks and production in the United States. Foreign coarse grain beginning stocks changes are mostly offsetting with corn carryin lowered 0.5 million tons for Canada and barley carryin raised 0.2 million tons and 0.3 million tons, respectively, for Argentina and Australia. Foreign corn production is lowered 0.6 million tons. Corn production is lowered 0.5 million tons each for Mexico and Russia, and 0.2 million tons for Canada. Ukraine corn production is raised 0.5 million tons and production for Belarus is raised 0.2 million tons. World barley production is raised 1.3 million tons with production raised 1.0 million tons for Russia, 0.8 million tons for Turkey, 0.4 million tons for EU-27, and 0.2 million tons for Argentina. Partly offsetting is a 1.0-million-ton reduction for Ukraine barley. Canada oats production is lowered 0.4 million tons.

Global corn trade for 2011/12 is raised with higher imports for China. China corn imports are

raised 1.5 million tons to 2.0 million reflecting the recently announced sale to China and favorable pricing opportunities for U.S. corn into southern

China where growing demand is reducing stocks. Corn exports are lowered 0.5 million tons for Canada and 0.2 million tons each for Mexico and

Russia, partly offsetting the U.S. increase. Global corn consumption is raised 5.9 million tons with higher expected feeding in China, the United

States, and Ukraine, and higher industrial use expected in the United States and Canada. Global corn ending stocks are projected 3.8 million

tons higher with the U.S. increase only partly offset by reductions for Canada and Mexico.

RICE: U.S. rice supplies in 2011/12 are lowered 6 percent to 256.6 million cwt as beginning stocks and production are reduced 6.0 million and

12.5 million, respectively. These reductions are partially offset by a 1.0 million cwt increase in imports to 19.0 million. Ending stocks for 2010/11

(beginning stocks for 2011/12) are lowered 6.0 million cwt as 2010/11 domestic and residual use is raised based on the Rice Stocks report

showing stocks as of June 1, which indicated lower-than-expected stocks and implied higher 2010/11 annual usage than previously estimated.

Rice production in 2011/12 is lowered 6 percent to 187.0 million cwt due entirely to a reduction in acreage. Harvested area for 2011/12 is
lowered 185,000 acres to 2.65 million. The average all rice yield is raised slightly to 7,059 pounds per acre. Area in 2011/12 is the lowest since

1987/88, and the crop size would be the lowest since 1997/98. Total use for 2011/12 is lowered 5.0 million cwt to 227.0 million as exports are

lowered 6.0 million (all in long-grain rice) to 100.0 million, partially offset by a 1.0 million increase in domestic and residual use.
Rough rice and combined milled and brown rice exports (rough-equivalent basis) are each reduced 3.0 million cwt to 36.0 million and 64 million,

respectively. Tighter supplies in 2011/12 along with plentiful supplies among the major exporters will likely limit U.S. exports. Ending stocks for

2011/12 are projected at 29.6 million cwt, down 12.5 million, or 30 percent from a month ago, and 21.0 million, or 42 percent below 2010/11.
The 2011/12 long-grain rice U.S. season-average farm price is projected at $12.00 to $13.00 per cwt, up 70 cents per cwt on each end of the

range from last month compared to $11.10 per cwt for 2010/11. The combined medium- and short-grain price is projected at $16.00 to $17.00

per cwt, up $1.00 per cwt from a month ago compared to $17.00 per cwt for 2010/11. The 2011/12 all rice price is projected at $13.20 to $14.20

per cwt, up $1.00 per cwt on each end of the range. Global 2011/12 rice production and trade are little changed from last month, while

consumption is lowered and ending stocks are raised. Global production is projected at a record 456.3 million tons, down fractionally as the drop

in the U.S. crop is nearly offset by an increase for Egypt.

Global exports in 2011/12 are lowered slightly due mostly to an expected decline in U.S.

exports. Global consumption in 2011/12 is lowered 1.7 million tons due mostly to a reduction for India. World ending stocks for 2011/12 are

projected at 96.3 million tons, up 1.4 million from last month, and nearly the same as the previous year. The increase in ending stocks is due

mostly to an increase for India.

SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is increased 218,000 short tons, raw value, from last month. Higher imports from

Mexico more than offset lower beginning stocks. Total 2011/12 U.S. sugar use is unchanged. For Mexico, 2010/11 ending stocks are increased

102,000 metric tons, raw value, with lower production more than offset by reduced domestic use and exports. For 2011/12, the larger beginning

stocks and decreases in domestic use and ending stocks result in higher exports of 258,000 tons. The decrease in 2011/12 domestic use is in

line with weaker demand for total sweeteners in Mexico.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2011 total meat production is lowered from last month as lower beef production more than

offsets higher expected pork and turkey production. Beef production is lowered as steer and heifer slaughter in the second quarter was lower

than expected although more cows were slaughtered. In addition, recent placements of lighter-weight cattle are expected to moderate carcass

weight growth during the year. The 2011 pork production forecast is raised on larger fourth-quarter slaughter. Broiler production for 2011 is

unchanged as higher secondquarter production is offset by lower forecast production in the fourth quarter. Turkey production is raised largely on

higher second-quarter production. No change is made to table egg production but hatching egg production is lowered due to a stronger forecast

decline in last-quarter broiler production.

For 2012, meat production forecasts are reduced as a sharper reduction in the broiler production forecast more than offsets higher pork and

turkey production. Larger cutbacks in broiler production are expected to carry into 2012 before production increases gradually later in the year.

The pork production forecast is raised slightly, driven primarily by gains in pigs per litter. Despite higher forecast hog prices, producers are

expected to remain cautious in expanding farrowings. Egg production forecasts for 2012 are reduced on less demand for hatching eggs.
A small increase is made to the export forecast for beef in 2011 but no changes are made to pork or broiler exports. For 2012, pork exports are

raised, but no changes are made to either beef or broilers. No changes are made to beef, pork, or broiler imports for either 2011 or 2012.
Cattle and hog prices are forecast higher for 2011 but forecast broiler prices are lowered as large supplies are pressuring prices. For 2012, attle

price forecasts are unchanged. Hog price forecasts are raised as demand strength carries into 2012, but price gains will be moderated by

higher production. Broiler prices are raised slightly as 2012 supplies are forecast to be tighter. Milk production forecasts for 2011 and 2012 are

raised. Cow numbers are forecast higher as higher milk prices and lower forecast feed prices support further herd expansion, but milk per cow is
unchanged from last month. Commercial exports on a fat basis are forecast higher for 2011. Ending stock forecasts are raised as cheese stocks

are larger than expected. Dairy product price forecasts for 2011 are raised from last month. The Class III and Class IV price forecasts are raised

from last month in line with increased product prices. The all milk price is forecast at $20.00 to $20.30 per cwt for 2011. For 2012, the butter

price is forecast slightly higher than last month, but forecasts for other products are unchanged. Class price forecasts are unchanged. The all
milk price forecast for 2012 is unchanged at $17.75 to $18.75 per cwt.

COTTON: The 2011/12 U.S. cotton projections show higher ending stocks relative to last month, despite a sharp reduction in expected roduction,

which is based on unfavorable weather. Beginning stocks are raised 500,000 bales due to continued export sales cancellations and the slow

pace of shipments in the final months of 2010/11. The 2011/12 production forecast is reduced 1.0 million bales from last month to 16.0 million,

despite larger planted area in the June Acreage report, as abandonment is forecast at a record 30 percent due to historic drought conditions,

mainly in Texas. Domestic mill use is unchanged from last month. Exports are lowered 1.0 million bales to 12.0 million, due both to reduced U.S.

supplies and weaker foreign demand. Ending stocks are raised to 3.0 million bales. The forecast stocks-to-use ratio of 19 percent, while above

last month's indication, is still relatively tight. The average price received by producers is now projected at 90 to 110 cents per pound, 5 cents

below last month on each end of the range. The world 2011/12 cotton projections also include higher beginning stocks, lower production, and

lower offtake compared with last month. Beginning stocks are raised mainly in the United States and India. The decline in U.S. production is

partially offset by an increase for Australia. World consumption is lowered nearly 2 percent from last month, as surplus yarn stocks and ubstitution

of polyester for cotton in textile products are expected to reduce demand below previous expectations. Imports are reduced for several countries

as a result of weaker demand growth, with China accounting for more than half of the reduction. Exports are reduced for the United States, Brazil,

and Australia, but are raised for India. World ending stocks are increased nearly 6 percent to 51 million bales. The projected stocks-to-use
ratio of 44 percent reflects recovery from the very tight levels of the two preceding years, but is still the third lowest since 1994/95.

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