WASDE keeps supplies tight

U.S. wheat supplies are up, feed grain and corn supplies are up and soybeans are lower. Ethanol use predictions are up too, though, and supplies remain tight in the USDA’s World Agricultural Supply and Demand Estimates. Here are some excerpts from the July 12 report.

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 offsetting is a 10 million bushel 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 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 abundant 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 expected exports 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.

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.

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