Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu
Corn Analysis
USDA projected an increase in ’08/’09 ending stocks for U.S. corn to 833 million bushels, above the average pre-report guess of 820 mb and 160 mb more than last month’s estimate. This report incorporated the June harvested acreage estimate of 78.9 million acres and cut average yield from the June estimate by one half bushel to 148.4 bushels per acre, resulting in estimated production of 11.715 billion bushels. This is 20 million bushels less than the June production forecast. Feed and residual use was cut 100 mb for ’07/’08 but was raised 50 mb for the ’08/’09 marketing year. Ethanol use was cut 50 mb for both the ’07/’08 and ’08/’09 marketing years. Exports were left unchanged for both years. The season average farm price estimate was increased by 20 cents per bushel on both ends of the price range, now placed at $5.50 to $6.50 per bushel.
World ending stocks of corn were projected at 105.31 mmt, 2.02 mmt larger than last month.
Soybean Analysis
U.S. soybean stocks are projected to decline to 140 million bushels for the ’08/’09 marketing year, down 35 million bushels from the June report. Harvested acreage is placed at 72.1 million bushels (taken from USDA’s June 30 Acreage Report). The yield estimate was decreased by one half bushel per acre from the June estimate and is now placed at 41.6 bushels per acre. U.S. soybean production is now forecast at 3 billion bushels for the ’08/’09 marketing year, 105 million bushels less than the June estimate. Adjustments to ending stocks for the ’07/’08 marketing year were left unchanged due to counterbalancing adjustments to exports and residual use. For the ’08/’09 marketing year, crush was cut 10 mb, export projections were reduced 50 mb and residual use was cut 6 mb. The season average farm price projection was increased $1.00 per bushel on both ends of the price range, now placed at $12.00 to $13.50 per bushel.
World ending stocks for soybeans were reduced 1.54 mmt from last month and are now placed at 48.87 mmt.
Wheat Analysis
All U.S. wheat production is forecast at 2.461 billion bushels, an increase of 29 mb from the June estimate and below the average of pre-report estimates. U. S. ending stocks for all wheat for the ’08/’09 marketing year, now projected at 537 million bushels, are 50 million bushels larger than last month. The season average farm price was unchanged from the June estimate at $6.75 to $8.25 per bushel.
Global wheat production is projected at a record 664 million tons. World ending stocks are now placed at 133.06 million metric tons, reflecting a 1 mmt increase from the June estimate.
Marketing Strategy
There are currently two primary driving forces that are influencing commodity prices: the price of crude oil (currently trading at $146.40 per barrel) and the lateness of the growing season which suggests that any yield estimates being made at this point in time are basically educated guesses with the outcome not likely to be known until harvest. We can expect commodity prices to remain extremely volatile throughout the summer.
Dec ’08 corn futures are currently trading at $7.02 per bushel; Nov ’08 soybeans at $15.93; July ’08 SRW wheat at $8.17; and Dec ’08 SRW wheat at $8.43 per bushel.
For technical assistance on making grain marketing decisions contact: Carl L. German, Extension Crops Marketing Specialist