Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
USDA’s April Supply/Demand Report Runs Contrary to Pre-Report Expectations
USDA kept U.S. corn ending stocks at an estimated 675 million bushels by lowering projected feed use. Soybean ending stocks also remained unchanged at 140 million bushels because of lower export numbers. USDA also countered trade estimates by lowering wheat ending stocks even though the market had largely forecast higher ending wheat stocks. For Crop Production: http://usda.mannlib.cornell.edu/. For World Agricultural Supply and Demand Estimates (WASDE): http://www.usda.gov/.
U.S. Summary
USDA’s World Ag Outlook Board’s April numbers projected an increase in corn use for ethanol, which was offset by a reduction in expected feed and residual use. Corn going to ethanol increased 50 million bushels. U.S. corn for ethanol use is now projected at 5 billion bushels. U.S. corn feed and residual use was lowered by 50 million bushels compared to a month ago. Exports were unchanged at 1.95 billion bushels. The season average corn price is now estimated at $5.20 to $5.60 per bushel. U.S. corn ending stocks were left unchanged at 675 million bushels, the tightest level on record. The trade was expecting to see a decrease in corn ending stocks.
Soybean exports were lowered 10 million bushels from last month, due to increased competition from the Southern Hemisphere, and are now estimated at 1.58 billion bushels. The season average price was raised 15 cents on the low end and lowered 35 cents on the high end, now estimated at $11.25 to $11.75 per bushel. The trade was expecting to see a slight decrease in soybean ending stocks.
Wheat ending stocks were lowered slightly for the ‘10/‘11 marketing year to 839 million bushels, due to an increase of 4 million bushels in seed use. The season average farm price was lowered 10 cents per bushel on both ends of the price range, now estimated at $5.50 to $.5.70 per bushel. Pre-report trade estimates were expecting an increase in wheat ending stocks.
World Summary
World corn production was increased 1.2 million metric tons, with increases in production projected in Brazil, Paraguay and Uganda. Brazil’s production was increased 2 MMT. World corn ending stocks were reduced slightly, from 123.14 MMT to 122.4 MMT, above average pre-report expectations.
World soybean ending stocks were pegged at 60.94 MMT, up from 58.33 MMT last month, and higher than average pre-report expectations. The estimate for Brazilian soybean production was increased 2 MMT from last month, now estimated at 72 MMT. The Argentine production estimate was unchanged from last month at 22 MMT.
World wheat ending stocks were increased to 182.83 MMT, from 181.9 MMT a month ago. Australian and Canadian wheat production were left unchanged from the March report.
The next WASDE report will be released on May 11.
U.S. ENDING STOCKS (billion bushels) 2010-2011
| Apr. | Average | High | Low | Mar. | 2009-10 | |
| Corn | 0.675 | 0.595 | 0.660 | 0.560 | 0.675 | 1.708 |
| Soybeans | 0.140 | 0.137 | 0.150 | 0.121 | 0.140 | 0.151 |
| Wheat | 0.839 | 0.861 | 0.893 | 0.835 | 0.843 | 0.976 |
| Sorghum | 0.032 | 0.036 | 0.040 | 0.032 | 0.037 | 0.041 |
WORLD ENDING STOCKS (million metric tons) 2010-2011
| Apr. | Average | High | Low | Mar. | 2009-10 | |
| Corn | 122.43 | 121.03 | 122.90 | 118.50 | 123.14 | 196.77 |
| Soybeans | 60.94 | 58.94 | 61.00 | 57.50 | 58.33 | 60.67 |
| Wheat | 182.83 | 182.01 | 184.00 | 179.00 | 181.90 | 196.77 |
WORLD PRODUCTION (Million Metric Tons)
| 2010-2011 | 2009-2010 | |||
| Apr. | Mar. | Apr. | Mar. | |
| Brazil corn | 55.0 | 53.0 | 56.10 | 51.0 |
| Argentina corn | 22.0 | 22.0 | 22.80 | 21.0 |
| Brazil soybeans | 72.0 | 70.0 | 69.0 | 67.0 |
| Argentine soybeans | 49.5 | 49.5 | 54.5 | 53.0 |
| Australia wheat | 26.0 | 26.0 | 21.9 | 22.5 |
| Canada wheat | 23.2 | 23.2 | 26.8 | 26.5 |
Market Strategy
Fundamentally, nothing changed in this report. Although mostly neutral, the biggest negative in this report is likely to be viewed as the 2 MMT increase in world soybean ending stocks. Trader attention will now turn to weather developments impacting the 2011 U.S. and World row crop season. There remains no room for margin of error for 2011 crop production. Currently, new crop Dec ‘11 corn futures are trading at $6.45; Nov ‘11 soybean futures at $13.70; and July ‘11 SRW wheat at $8.05 per bushel.
For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.