As expected, USDA cut its estimates of U.S. ending stocks for corn, soybeans and wheat in the Sept. 10 monthly supply/demand update, but the new-crop soybean carryout fell less than traders had anticipated due to increased U.S. production.
USDA pegged the U.S. soybean carryout for 2010-2011 at 350 million bushels, down 10 million bushels from its August estimate but toward the high end of trade expectations, which averaged 304 million bushels in a range from 129 million to 373 million bushels.
A 50-million-bushel rise in expected U.S. soybean production largely offset an increase of 50 million bushels in projected U.S. exports and a 10-million-bushel increase in the projected old-crop carry-in.
USDA lowered 2009-2010 ending stocks to 150 million bushels, raising old-crop exports by 25 million bushels to a record 1.495 billion and lowering residual usage by 15 million bushels.
Although it cut the projected soybean carryout by only 10 million bushels, USDA raised its projection for the U.S. season-average soybean price by 65¢ on both ends of the range to $9.15-10.65/bu.
USDA put the U.S. corn carryout for 2010-2011 at 1.116 million bushels, down 196 million bushels from its August estimate and in line with trade estimates, which averaged 1.125 billion bushels in a range from 929 million to 1.312 billion bushels.
As a result of the tight carryout, USDA raised its projection for the on-farm average price of corn sharply to $4-4.70 from last month’s projection of $3.50-4.10.
The impact of a 205-million-bushel cut in expected U.S. corn production and a smaller old-crop carry in was only partially offset by a 50-million-bushel cut to projected corn usage.
USDA cut projected feed/residual usage by 100 million bushels due to prospects for higher corn prices, but raised projected exports by 50 million bushels on rising world demand for coarse grains.
Old-crop corn ending stocks were cut by 40 million bushels to 1.386 million bushels, increasing old-crop corn-for-ethanol usage and exports.
USDA pegged the U.S. wheat carryout for 2010-2011 at 902 million bushels, down 50 million bushels from its previous estimate and in line with trade estimates that averaged 914 million bushels in a range from 830 million to 995 million bushels.
Projected U.S. wheat exports for 2010-2011 were raised by 50 million bushels due to strong early sales and reduced production in the EU-27, which will decrease export competition for U.S. wheat.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.