Record Corn Crop Bigger Than Traders Thought- Global Wheat Stocks Sharply ReducedThu, 12 Aug 2010 8:07:07 CDT
The USDA issued Crop Production and Supply Demand Reports on Thursday morning. Our own Ed Richards talked with Tom Leffer of Leffler Commodities this morning and you can click on the LISTEN BAR below for that converstion. He calls it a lower opening on the wheat, corn and soybeans, based onthe Crop peroduction numbers that were at the high end of trader's expectations.
The Crop Production Numbers all point higher in the major spring planted crops. Click here to jump to the actual USDA report to see state by state breakdowns of the major crops.
Specifically- Corn Production Up 2 Percent from 2009
Soybean Production Up 2 Percent from 2009
Cotton Production Up 52 Percent from 2009
All Wheat Production Up 2 Percent from July Forecast
Corn production is forecast at a record high 13.4 billion bushels, up 2 percent from the previous record set in 2009. Based on conditions as of August 1, yields are expected to average a record high 165.0 bushels per acre, up 0.3 bushel from last year's record of 164.7. Forecasted yields are higher than last year across the upper Mississippi Valley and upper Great Lakes region where moderate temperatures and adequate soil moisture provided favorable growing conditions. Expected yields were also higher compared with last year across the southern Great Plains and lower Mississippi Valley. Yield prospects are lower in both the Atlantic Coast region and Tennessee Valley due to above normal temperatures and dry conditions.
Soybean production is forecast at a record high 3.43 billion bushels, up 2 percent from last year. Based on August 1 conditions, yields are expected to average 44.0 bushels per acre, unchanged from last year's record high yield. Compared with last year, yields are forecast higher across the northern tier States, with increases of 4 bushels or more in Minnesota, North Dakota, Pennsylvania, and Wisconsin. The largest increase in yield from 2009 is expected in Texas, where the yield is forecast to be up 9 bushels from last year. In addition, increases are expected in the Delta States. With the exceptions of Illinois and South Carolina, yields are forecast down or unchanged across the central part of the soybean growing region, extending from the central Great Plains to the East Coast and down into the Southeast. The Mid-Atlantic States are expecting the largest declines from last year, as Delaware, Maryland, and Virginia are all expecting yields to be down more than 10 bushels from 2009 due to very hot and dry weather this summer. If realized, the forecasted yield in New York will be a record high and the forecasted yield in Arkansas will tie the previous record high. Area for harvest in the United States is forecast at 78.0 million acres, unchanged from June but up 2 percent from 2009.
All cotton production is forecast at 18.5 million 480-pound bales, up 52 percent from last year's 12.2 million bales. Yield is expected to average 837 pounds per harvested acre, up 60 pounds from last year. Upland cotton production is forecast at 18.0 million 480-pound bales, 53 percent above 2009. Texas producers are expecting a record high production of 8.80 million 480-pound bales, a 90 percent increase from last year. American Pima production is forecast at 497,800 bales, up 25 percent from last year. Producers expect to harvest 10.6 million acres of all cotton and 10.4 million acres of upland cotton, both up 41 percent from last year. American Pima harvested area is expected to total 207,000 acres, up 50 percent from 2009.
All wheat production, at 2.26 billion bushels, is up 2 percent from the July forecast and up 2 percent from 2009. Based on August 1 conditions, the United States yield is forecast at 46.9 bushels per acre, up 1.0 bushel from last month and 2.5 bushels above last year. If realized, this will be the highest yield on record, 2.0 bushels above 2008.
Winter wheat production is forecast at 1.52 billion bushels, up 1 percent from last month and up slightly from 2009. The United States yield is forecast at 47.5 bushels per acre, up 0.6 bushel from last month and up 3.3 bushels from last year. If realized, this will be the second highest yield on record, trailing only 1999. The area expected to be harvested for grain totals 32.1 million acres, unchanged from last month but down 7 percent from last year.
Hard Red Winter, at 1.03 billion bushels, is up 2 percent from a month ago. Soft Red Winter, at 260 million bushels, is down 3 percent from the previous forecast. White Winter is up 3 percent from last month and now totals 234 million bushels. Of this total, 18.6 million bushels are Hard White and 215 million bushels are Soft White.
Durum wheat production is forecast at 109 million bushels, up 5 percent from July but down slightly from 2009. The United States yield is forecast at 42.0 bushels per acre, 2.0 bushels above last month but 2.9 bushels below last year. If realized, this will be the second highest yield on record, trailing only last year. Expected area to be harvested for grain totals 2.59 million acres, unchanged from last month but up 7 percent from last year.
Other spring wheat production is forecast at 633 million bushels, up 4 percent last month and 8 percent above last year. If realized, this will be the third largest production on record, trailing only 1992 and 1996. The expected area to be harvested for grain totals 13.6 million acres, unchanged from last month but up 5 percent from last year. The United States yield is forecast at 46.6 bushels per acre, 2.0 bushels above last month and 1.5 bushels above 2009. If realized, this will be the highest yield on record, 1.5 bushels above the record set last year. Of the total production, 592 million bushels are Hard Red Spring wheat, up 5 percent from last month.
In the Supply Demand report, the biggest changes was in the wheat stocks- and much of that was in the global numbers. The USDA analysts lowered the expected size of the Russian wheat crop by a whopping eight million metric tons- and that drop, plus other drops in neighboring countries that were once the Soviet Union resulted in a higher expectation for US wheat prices. US wheat prices for the balance of this crop year are raised fifty cents per bushel on both ends of the range given by the report- $ 4.70 to $5.50 per bushel.
Here's what the report said specifically about US wheat stocks and outlook:
U.S. wheat ending stocks for 2010/11 are lowered this month as higher expected exports more than offset an increase in forecast production and lower projected feed and residual use. Production is forecast 49 million bushels higher mostly reflecting higher yields for durum and other spring wheat, especially in the Northern Plains. Winter wheat production is also raised slightly as higher yields in the Northern Plains and Pacific Northwest more than offset reductions in the eastern Corn Belt. Feed and residual use is lowered 10 million bushels as rising values have priced wheat out of feed rations. Exports are projected 200 million bushels higher with declines in foreign production, particularly in the FSU-12, reducing global supplies and making U.S. wheat competitive in key Middle East and North Africa markets. U.S. ending stocks are projected 141 million bushels lower from last month, and down 21 million from 2009/10. The 2010/11 season-average farm price is projected at $4.70 to $5.50 per bushel, up 50 cents on both ends of the range.
The Global wheat outlook-
Global wheat supplies for 2010/11 are reduced sharply with world production lowered 15.3 million tons, mostly on reductions for FSU-12 and EU-27 countries. Production for Russia is lowered 8.0 million tons as continued extreme drought and record heat during July and early August have further reduced summer crop prospects. Kazakhstan production is lowered 2.5 million tons reflecting the same adverse weather conditions as in Russia. Ukraine production is lowered 3.0 million tons as heavy summer rains damaged maturing crops and hampered harvesting in western and southern growing areas. Harvest results also support indications that producers reduced input use in response to limits on available capital. EU-27 production is lowered 4.3 million tons with yields reduced for northwestern Europe on untimely heat and dryness. Yields are lowered for southeastern Europe as heavy rains from the same weather pattern that affected Ukraine reduced output. Production is also lowered for Algeria, Brazil, Uruguay, Belarus, and Croatia. Partially offsetting are increases for India, the United States, Australia, and Uzbekistan.
World wheat imports and exports are reduced sharply as tighter supplies and higher prices reduce projected global consumption. Imports are projected 5.7 million tons lower as higher prices reduce demand in a number of countries. Exports are lowered 12.0 million tons for Russia partly reflecting the recent announcement banning exports through December. Also limiting Russia export prospects is higher expected wheat feeding with drought-reduced forage and coarse grain crops and policy goals aimed at increasing domestic meat production. Exports for Kazakhstan and Ukraine are lowered 2.0 million tons each with sharply lower production. Higher exports from other countries partly offset FSU-12 declines. Exports are raised 1.2 million tons for China, 1.0 million tons each for Australia and EU- 27, and 0.9 million tons for Turkey. The 5.4-million-ton increase projected for U.S. exports is expected to offset the largest share of the decline from FSU-12. Global ending stocks are projected 12.3 million tons lower. At 174.8 million tons, world stocks are projected 49.9 million tons higher than in 2007/08 when prices soared to record levels.
Other crops are seeing increases in stock levels- based on the guidance of this report. Click here to read the full report from the Economic Research Service of USDA.
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