Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
USDA Cuts Corn Ending Stocks
U.S. farmers are on track to produce record-high corn and soybean crops this fall, USDA forecast in its August crop production report released early Thursday, with 13.365 billion bushels of corn and 3.433 billion bushels of soybeans. Average corn yield is forecast at a record-high 165 bushels per acre, and soybean yield is forecast at 44 bushels per acre, same as last year. Increases in production are offset by increases in demand, leaving ending stocks for corn down from last month and soybean ending stocks unchanged.
On the production side, the numbers should be considered bearish for soybeans and corn, as both came in above the average estimates and are record large. Wheat should be considered neutral as USDA’s estimate was slightly below the average pre-report estimate.
The market should find support as demand continues to improve, most notably in wheat, where exports were increased 200 million bushels in response to the Russian drought.
Traders may be looking closely at world wheat supply and demand numbers, following the recent volatility in the wheat markets. USDA cut both world production and ending stocks for 2010/11, and lowered its estimate for Russian wheat production to 45 million metric tons, from 53 MMT in July. Those numbers are within the range of trade expectations.
U.S. CROP PRODUCTION (Million Bushels) 2010-2011
| Aug | Avg | High | Low | July | 2009-10 | |
| Corn | 13,365 | 13,280 | 13,524 | 13,120 | 13,245 | 13,110 |
| Soybeans | 3,433 | 3,360 | 3,432 | 3,290 | 3,345 | 3,359 |
| Grain Sorghum | 383 | 351 | 357 | 346 | 350 | 383 |
| All Wheat | 2,265 | 2,230 | 2,250 | 2,172 | 2,216 | 2,216 |
| All Winter | 1,523 | 1,504 | 1,516 | 1,466 | 1,505 | 1,523 |
| Spring | 633 | 614 | 632 | 599 | 607 | 584 |
| Durum | 109 | 105 | 109 | 101 | 104 | 109 |
U.S. AVERAGE YIELD (Bushels per Acre) 2010-2011
| Aug | Avg | High | Low | July | 2009-10 | |
| Corn | 165.0 | 164.1 | 167.4 | 162.0 | 163.5 | 164.7 |
| Soybeans | 44.0 | 43.2 | 44.0 | 42.0 | 42.9 | 44.0 |
| Grain Sorghum | 74.1 | 67.9 | 68.2 | 67.5 | 67.6 | 69.4 |
U.S. ENDING STOCKS (Million Bushels) 2010-2011
| Aug | Avg | High | Low | July | |
| Corn | 1,312 | 1,306 | 1,535 | 1,075 | 1,373 |
| Soybeans | 360 | 350 | 378 | 275 | 360 |
| Grain Sorghum | 41 | 32 | 36 | 29 | 33 |
| Wheat | 952 | 962 | 1,132 | 699 | 1,093 |
U.S. ENDING STOCKS (Million Bushels) 2009-2010
| Aug | Avg | High | Low | July | 2008-09 | |
| Corn | 1,426 | 1,470 | 1,523 | 1,425 | 1,478 | 1,673 |
| Soybeans | 160 | 169 | 181 | 153 | 175 | 138 |
| Grain Sorghum | 28 | 51 | 55 | 46 | 28 | 55 |
WORLD ENDING STOCKS (Million Metric Tons)
| 2010-2011 | 2009-2010 | |||
| Aug | July | Aug | July | |
| Wheat | 174.76 | 187.05 | 193.97 | 193.02 |
| Corn | 139.20 | 141.08 | 139.03 | 139.59 |
| Soybeans | 64.73 | 67.76 | 63.52 | 65.35 |
WORLD PRODUCTION (Million Metric Tons)
| 2010-2011 | 2009-2010 | |||
| Aug | July | Aug | July | |
| Brazil soybeans | 65.0 | 65.0 | 69.0 | 69.0 |
| Argentine soybeans | 50.0 | 50.0 | 54.5 | 54.5 |
| Argentine corn | 21.0 | 21.0 | 22.5 | 22.5 |
| Brazil corn | 51.0 | 51.0 | 54.35 | 53.0 |
| Canada wheat | 20.5 | 20.5 | 26.5 | 26.5 |
| Russia wheat | 45.0 | 53.0 | 61.7 | 61.7 |
Source: DTN
Market Strategy
Overall, this report should be considered price positive. In the near term, commodity markets are more likely to react to the effects of outside market forces. Overnight, those forces were mixed with the dollar higher and energy lower. The Dow, as of this writing, is considerably lower on the week. General economic conditions in the U.S. and world remain weak.
Commodity prices bid higher in overnight trade, possibly anticipating larger declines in ending stocks numbers for U.S. corn and soybeans than those revealed this morning. Good pricing opportunities remain. Before the open, Dec ‘10 corn futures are $4.11; Nov ‘10 soybean futures are $10.15; and Dec ‘10 SRW wheat futures are $7.25; Dec ‘11 corn futures are $4.31; Nov ‘11 soybean futures are $10.04; and July SRW wheat futures are $6.88 per bushel.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.