The June 9 WASDE report from USDA showed corn prices projected at a record high of $6-7/bu. Soybean prices were up $1 on each end of the range with a projection of $13-15/bu. for the 2011-2012 marketing year. Corn ending stocks are expected to be the lowest globally since 2006-2007. Soybean stocks, however, are projected up, due to lower projected exports.
Projected U.S. feed grain supplies for 2011-2012 are sharply lower with reduced prospects for corn acreage. Corn planted area for 2011-2012 is lowered 1.5 million acres from March intentions to 90.7 million acres. Planting delays through early June in the eastern Corn Belt and northern Plains are expected to reduce planted area, more than offsetting likely gains in the western Corn Belt and central Plains where planting was ahead of normal by mid-May.
Harvested area is lowered 1.9 million acres, to 83.2 million with the additional 400,000-acre reduction reflecting early information about May flooding in the lower Ohio and Mississippi River valleys and June flooding along the Missouri River valley. Production is projected at 13.2 billion bushels, down 305 million from last month, but still a record, and up 753 million from 2010-2011.
U.S. feed grain usage changes for 2011-2012 include a 100-million-bushel projected decline in corn feed and residual use and a 5-million-bushel increase in sorghum exports. Feed grain ending stocks are sharply lower with expected corn ending stocks down 205 million bushels to 695 million. Corn ending stocks are projected 35 million bushels lower than beginning stocks indicating a stocks-to-use ratio of 5.2% compared with the 2010-2011 forecast ratio of 5.4%. The 2011-2012 season-average farm price for corn is projected at a record $6-7/bu., up 50¢ on both ends of the range. Projected farm prices are also raised for the other feed grains.
Global coarse grain supplies for 2011-2012 are projected down 7.8 million tons this month with lower beginning stocks and production. Reduced U.S. corn production, lower EU-27 barley production and reduced corn beginning stocks in China more than offset increases in China corn production. China corn area is raised for 2010-2011 in line with the most recent official government area estimates with the year-to-year percentage increase for 2011-2012 largely maintained.
China corn production increases 5.0 million and 6.0 million tons for 2010-2011 and 2011-2012, respectively, with yields unchanged month-to-month. More than offsetting the higher production levels is higher estimated corn consumption for both feeding and industrial use. China corn consumption is raised 8.0 million tons and 13.0 million tons for 2010-2011 and 2011-2012, respectively. Together these changes leave projected 2011-2012 corn ending stocks down 12.0 million tons for China. At the projected 51.0 million tons, China’s stocks would be down 2.7 million tons from 2010-2011 and just below the levels of the preceding two years, better reflecting the continuing rise in domestic corn prices as production struggles to keep pace with rising usage. Although China’s stocks represent 46% of the world total for 2011-2012, China is not expected to be a significant exporter.
Global 2011/12 corn trade is raised slightly this month with higher imports for EU-27 and higher exports for Ukraine. Ukraine exports are raised 1.0 million tons with higher production and stronger expected demand from EU-27. Russia exports are lowered 0.5 million tons with lower production. Global corn ending stocks for 2011-2012 are projected down sharply this month, falling 17.3 million tons mostly reflecting the usage revisions in China. The projected 5.2-million-ton drop in U.S. ending stocks accounts for most of the rest of the decline. Global corn stocks are projected at 111.9 million tons, the lowest since 2006-2007.
This month’s U.S. oilseed supply and use projections for 2011-2012 include higher beginning and ending stocks and reduced exports. Although adverse weather has slowed soybean planting progress this year, area and production estimates are unchanged with several weeks remaining in the planting season. Higher beginning stocks reflect a lower export projection for 2010-2011. Soybean exports for 2010-2011 are reduced 10 million bushels to 1.54 billion bushels reflecting the export pace to date for the marketing year and reduced global import demand, led mainly by lower projected imports for China.
Soybean ending stocks for 2010-2011 are projected at 180 million bushels, up 10 million. U.S. soybean exports for 2011-2012 are reduced 20 million bushels to 1.52 billion, reflecting increased competition from South America resulting from an increase in the recently harvested Brazilian soybean crop. With larger supplies and reduced exports, ending stocks for 2011-2012 are increased 30 million bushels to 190 million. Other changes for 2010-2011 include reduced soybean oil used for biodiesel production, reduced projected food use of soybean oil and lower soybean oil exports, all resulting in increased ending stocks for 2010/11 and 2011/12.
Soybean, meal and oil prices are all raised this month. Led by higher corn prices, the U.S. season-average soybean price for 2011-2012 is projected at $13-15/bu., up $1 on both ends of the range. Soybean meal prices for 2011-2012 are projected at $375-405/short ton, up $25 on both ends of the range. Soybean oil prices are projected at 58-62¢/lb., up 2¢ on both ends of the range.
Global oilseed production for 2011-2012 is projected at 456.9 million tons, down 2.3 million from last month, mainly due to lower rapeseed production. China soybean production is reduced 0.5 million tons to 14.3 million reflecting lower area as producers shifted to corn. Brazil’s 2010-2011 soybean production is increased 1.5 million tons to a record 74.5 million, reflecting yield and production increases reported in the most recent government survey.