Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
USDA’s May Supply/Demand Report Highlights
The May report continued the tabulations and projections for ‘09/‘10 and included the first official projection of U.S. and world production for the 2010/2011 marketing year. Data from the March 31 planting intentions report and revised World Outlook Board yield estimates were used to compile the May projections. What did we learn from the release of USDA’s May Supply and Demand report? First, ending stock estimates for the current marketing year were reduced for corn, and unchanged from a month ago for soybeans and wheat. Ending stocks for ‘09/‘10 U.S. corn were projected at 1.736 billion bushels, 161 million bushels less than a month ago. U.S. ending stocks for soybeans remain unchanged at 190 million bushels, and unchanged for all wheat at 950 million bushels. U.S. ending stock estimates for the 2010/2011 marketing year were corn at 1.818 billion bushels, soybeans at 365 million bushels, and all wheat at 997 million bushels.
World ending stock estimates for the ‘09/‘10 marketing year for corn were estimated at 147.04 million metric tons, soybeans at 63.76 MMT, and all wheat at 193.37 MMT. World ending stock estimates for the 2010/2011 marketing year were projected at 154.21 million metric tons for corn, 66.09 MMT for soybeans, and 198.09 MMT for all wheat.
Brazilian soybean production for the ‘09/‘10 marketing year is now projected at 68 MMT, .5 MMT increase from last month’s estimate. The estimate for Argentine soybean production was left unchanged at 54 MMT. Brazilian corn production and Argentine corn production were left unchanged from last month, estimated at 53.5 and 21.0 MMT, respectively.
Market Strategy
As of May 9, U.S. corn planting was reported to be 81 percent complete, as compared to the five year average of 62 percent. The corn crop was reported as 39 percent emerged as compared to 21 percent for the five year average. U.S. soybeans were reported as 30 percent planted, compared to the average of 19 percent, and 7 percent emerged, also ahead of the average. Two-thirds of the spring wheat crop was planted, in line with the average, while almost 40 percent had emerged, as compared to the five year average of 28 percent. For winter wheat, 40 percent was reported as headed as compared to the average of 43 percent. Crop conditions for winter wheat were reported as in line with the average and much better than last year.
The weekly export sales report, released this morning, was mixed with corn exports, now projected at 1.950 billion bushels reported as neutral to bullish, soybean exports starting to lag while still running ahead of USDA’s revised projection of 1.455 billion bushels, and wheat exports reported at levels that might not achieve USDA’s projection of 865 million bushels for the ‘09/‘10 marketing year.
Currently, Dec ‘10 corn futures are trading at $3.92; Nov ‘10 soybean futures at $9.37; with July ‘10 SRW wheat at $4.91 per bushel. Price direction for the 2010 row crop production year now becomes almost entirely dependent upon weather developments throughout the growing season.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.