Corn

U.S. feed grain supplies for 2010-2011 are projected down reflecting lower corn production. U.S. corn production is estimated 93 million bushels lower as a 1.5-bu./acre reduction in the national average yield outweighs a 183,000-acre increase in harvested area. A 5-million-bushel increase in projected U.S. corn imports slightly offsets the reduction in output. Corn feed and residual use is projected 100 million bushels lower based on September-November disappearance as indicated by the Dec. 1 stocks. Corn used for ethanol is raised 100 million bushels offsetting the reduction in expected feed and residual use. Record December ethanol production, as indicated by weekly Energy Information Administration data, boosts corn use to date.

Ending corn stocks for 2010-2011 are projected 87 million bushels lower at 745 million. This is down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5%, the lowest since 1995-1996 when it dropped to 5%. The 2010-2011 marketing-year average farm price projection is raised 10¢ on both ends of the range to $4.90-5.70/bu. as cash and futures prices are expected to strengthen. Heavy early season marketings of corn priced well below current cash price levels are expected to limit the upside potential for the weighted average price received by producers.

Global corn production is lowered 4.7 million tons with the U.S. reduction and a 1.5-million-ton decrease for Argentina as untimely, persistent dryness during late December and early January reduces yield prospects in key central growing areas. Smaller reductions in corn output are also projected for Indonesia and Turkey, each down 0.4 million tons.

Corn imports are lowered for South Korea, Turkey and the Philippines, but raised for Indonesia. Corn exports are reduced for Argentina and Turkey, with a partly offsetting increase for Canada. Global corn consumption is lowered mostly reflecting reduced feeding in South Korea and Turkey. Global corn ending stocks are projected 3.0 million tons lower with more than two-thirds of the reduction in the U.S.

Soybeans

U.S. oilseed production for 2010/11 is estimated at 100.5 million tons, down 1.2 million from last month. Soybean production is estimated at 3.329 billion bushels, down 46 million bushels based on reduced harvested area and lower yields. The soybean yield is estimated at 43.5 bu./acre, down from last year’s record of 44 bu. Soybean crush is lowered 10 million bushels to 1.655 billion bushels. However, higher projected extraction rates for soybean meal and oil leaves production of both products nearly unchanged. Soybean exports are projected at a record 1.590 billion bushels, unchanged from last month. Soybean ending stocks are projected at 140 million bushels, down 25 million from last month.

The 2010-2011 U.S. season-average soybean price range is projected at $11.20-12.20, up 50¢ on the lower end of the range. However, early season marketings priced below current cash price levels are expected to limit the upside potential for the weighted average price received by producers. The soybean oil price is forecast at 48-52¢/lb., up 3¢ on both ends of the range. The soybean meal price is projected at $320-360/short ton, up $10 on both ends of the range.

Global soybean production is projected at 255.5 million tons, down 2.3 million. The Argentina soybean crop is projected at 50.5 million tons, down 1.5 million from last month due to lower projected yields. Although recent rains will help producers complete planting, earlier periods of unfavorable dryness have compromised yield potential, especially in some of the major producing areas. Paraguay soybean production is raised 0.5 million tons to 7 million due to increased area and favorable yield prospects. Global oilseed ending stocks for 2010-2011 are reduced 2 million tons to 68.3 million with Argentina and U.S. soybean stocks accounting for most of the change.