WASDE: An Agreement between USDA and Consensus
Feb 09, 2012
It almost seems as if the USDA got together with the consensus to amend their differences as USDA forecasted supplies for corn, soybean, and wheat are in line with the analysts. South America and Russia continue to the be on everyone's radar as yields in South America and government involvement from Russia could affect the grain markets.
The USDA projected U.S. corn exports at 50 million bushels higher due to an increase in sales and shipments and a decrease in Argentina's supplies.
2011/12 U.S. ending stocks are projected at 801 million bushels, a 45 million bushel decrease from last month. The USDA narrowed the forecasted season-average farm price by $0.10 on both ends of the range to $5.80 to $6.60 per bushel.
The forecasted stocks to use ratio was lowered to 6.3% compared to 6.7% last month and well below the 5-yr average of 12.0%
2011/12 global coarse grain supplies are decreased by 3.1 million tons reflecting reduced corn production in Argentina and Paraguay. Argentina corn production is lowered by 4 million tons to 22 million, and Paraguay's production is lowered by 0.4 million tons.
We will continue to watch Argentina's corn production as La Niña weather patterns of extreme heat reduce yield prospects. Although Argentina has seen recent rain, extensive heat during pollination in December and January has caused irreversible damage to the early corn.
U.S. soybean exports are projected 226 million bushels lower than last year, but unchanged from last month at 1.275 billion bushels. 2011/12 ending stocks are unchanged at 275 million bushels. The U.S. season-average price range for 2011/12 was narrowed to $11.10 to $12.30 per bushel compared to $10.95 to $12.45 last month.
Global oilseed production for 2011/12 is projected down 4.9 million tons to 257 million tons due to lower production forecasts for South America.
U.S. wheat ending stocks for 2011/12 are projected 25 million bushels lower to 845 million bushels. Exports are increased by 25 million bushels due to strong sales, strong shipments, and competitively priced feed. The season-average price is raised $0.20 at the bottom end to $7.15 to $7.45 per bushel.
Global wheat supplies for 2011/12 are projected 2.1 million tons higher due to increased beginning stocks in Kazakhstan and increased production for India, Kazakhstan, and Morocco.
We will be closely watching Russia as their supply of wheat dwindles which could result in their government shutting down exports for the second time in two years.
Moving forward, the grain markets will be closely watching South America's corn and soybean production and how La Niña weather patterns will affect yields.
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