Record U.S. average corn yield and record corn production forecast in USDA’s May supply and demand reports pressured corn down on Thursday.
But the U.S. Department of Agriculture’s forecast of U.S. soybean ending stocks was smaller than expected, lifting soybeans prices, which in turn lifted canola.
July canola settled at $623.40 per tonne, up $5.00
November closed at $577.00, up $6.70.
There is rain where it is not needed in southeastern Saskatchewan today, but otherwise conditions are mostly dry. The extended forecast now is for sunny and increasingly warm weather that should allow seeding to soon resume at full pace.
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USDA
Today’s USDA report adjusted U.S. yield forecasts to a record 166 bushels per acre from 164 but kept the seeded acreage numbers from the Prospective Plantings report.
The official planted acreage report comes out June 30.
Some analysts are questioning the record yield number. Sure, seeding is off to a record start with good moisture in most of the Midwest, but a lot of the new acres are in nontraditional growing areas where yields are not likely to be as good as in traditional growing zones.
OLD CROP STOCKS
For old crop 2011-12, USDA sees corn ending stocks at 851 million bushels, well up over the trade’s average guess of 749 million. That is a big surprise and, again, some are questioning the number, give the strong basis that corn buyers are having to cough up get get U.S. farmers to open their bins and deliver corn.
Part of the explanation might be the expectation of an early harvest that could allow some of this year’s crop to be sold before the Aug. 31 end of the 2011-12 corn crop year.
Also, could today’s corn price drop entice China to again enter the market?
Soybean old crop stocks were pegged at 210 million bushels, compared to the trade’s guess of 214 million.
USDA pegged all wheat old crop stocks at 768 million bu., down from the trade guess of 778 million.
NEW CROP CORN
USDA projected a 2012-13 U.S. corn crop of 14.79 billion bushels, 13 percent larger than the current record. It expects stocks at the end of 2012-13 to climb to 1.881 billion bushels, the largest carryover since 2005-06.
USDA sees China’s 2012-13 corn imports climbing to seven million tonnes from five million this year.
NEW CROP SOYBEANS
USDA sees a 2012-13 U.S. soybean crop of 3.205 billion bu., the third largest on record. It sees end stocks contracting to 145 million bushels, slightly more than a two-week supply and a stocks-to-use ratio “at a historically low 4.4 percent.”
The average of trader’s expectations was stocks of 164 million bu.
USDA sees China’s soybean imports climbing to 61 million tonnes, up from 56 million this year.
NEW CROP WHEAT
It sees total U.S. wheat production climbing to 2.245 billion bu., up from 1.999 billion in 2011-12. Despite the increase in production, it sees 2012-13 year end stocks falling to 735 million bu., due to increased exports and domestic feed use.
For the winter wheat crop, see the chart below.
USDA has estimates for the desert durum crop grown in California and Arizona. Production this year climbed 28 percent to 26.335 million bu.
GLOBAL SOYBEANS
USDA lowered its forecast for Argentina’s soybean crop to 42.5 million tonnes from 45 million and pegged Brazil’s crop at 65 million tonnes, down from 66 million last month. It sees 2011-12 global soybean production at 236.87 million tonnes, down from last month’s estimate of 240.15 million and down from last year’s 264.69. Global ending stocks for the current year will fall to 53.24 million tonnes.
Soybean production world wide in 2012-13 is expected to hit 271.4 million tonnes, up 15 percent from this year as South America rebounds from drought. USDA said Brazil would next year harvest a record 78 million tonnes and Argentina 55 million tonnes. It sees global ending stocks recovering slightly but remaining tight at 58.07 million tonnes
GLOBAL CORN
USDA seed global corn production in 2012-13 climbing to 945.78 and year-end stocks of 152.34 million tonnes.
That is well up from the 2011-12 production estimate of 870.45 million tonnes and ending stocks of 127.56.
Most of the increase comes from the U.S.
GLOBAL WHEAT
Although U.S. wheat production is expected to rise, global wheat production for 2012-13 is expected to fall to 677.56 million tonnes from 694.64 million in 2011-12.
Ending stocks are forecast to fall to 188.13 million tonnes, down from 197 million the year before and the smallest in three years. However the stocks to use ratio is still 27.5 percent, a far cry from the very tight 20 percent of 2007-08.
Frost and dry weather over the winter hurt wheat crops in Europe and the former Soviet Union.
Ukraine is expected to produce 13 million tonnes in 2012-13, down from 22.12 million. Kazakhstan is expected to produce 15 million tonnes, down from 22.73 million.
Russia’s crop is about steady at 56 million tonnes.
The European Union’s production is pegged at 132 million tonnes, down from 137.4 million.
Australia’s is seen at 26 million, down from the record 29.5 million in 2011-12 and Argentina is pegged at 12 million, down from 14.5 million.
| Ending stocks US
Billions of bushels |
2010/11 | Average Analysts
Forecast 2011/12 |
USDA
May 2011/12 |
| Wheat | 0.862 | 0.778 | 0.768 |
| Corn | 1.128 | 0.749 | 0.851 |
| Soybeans | 0.215 | 0.214 | 0.210 |
| U.S. wheat production
Billions bushels |
2010/11 | Average Analysts
F’cast 2011/12 |
USDA
May 2011/12 |
| All winter wheat | 1.494 | 1.639 | 1.694 |
| -Hard red winter | 0.780 | 0.996 | 1.032 |
| -Soft red winter | 0.458 | 0.412 | 0.428 |
| -White winter | 0.256 | 0.231 | 0.233 |
| All WHEAT | 1.999 | 2.194 | 2.245 |
THURSDAY CLOSING PRICES
Winnipeg (per tonne)
Canola May 12 $628.40, up $5.00 +0.80%
Canola Jul 12 $623.40, up $5.00 +0.81%
Canola Nov 12 $577.00, up $6.70 +1.17%
Canola Jan 13 580.20, up $6.20 +1.08%
The best basis in the par region on the previous day was $4 over the July contract, according to ICE Futures Canada.
Western Barley May 12 $242.00, unchanged
Western Barley Jul 12 $237.00, unchanged
Milling Wheat Oct 12 $243.00, unchanged
Milling Wheat Dec 12 $248.00, unchanged
Milling Wheat Mar 13 257.00, unchanged
Durum Wheat Oct 12 $275.60, unchanged
Durum Wheat Dec 12 $280.10, unchanged
Durum Wheat Mar 13 $286.70, unchanged
Barley Oct 12 $184.00, unchanged
Barley Dec 12 $188.00, unchanged
Barley Mar 13 $191.00, unchanged
Chicago (per bushel)
Soybeans May 12 $14.5225, up 24.5 +1.72%
Soybeans Jul 12 $14.5525, up 25.0 +1.75%
Soybeans Nov 12 $13.59, up 25.5 +1.91%
Corn May 12 $6.255, down 15.75 -2.46%
Corn Jul 12 $5.875, down 19.75 -3.25%
Corn Dec 12 $5.0725, down 9.5 -1.84%
Oats May 12 $3.3325, up 1.25 +0.38%
Oats Jul 12 $3.36, unchanged
Oats Dec 12 $3.44, down 1.0 -0.29%
Minneapolis (per bushel)
Spring Wheat May 12 $7.30, down 1.25 -0.17%
Spring Wheat Jul 12 $7.2725, down 3.0 -0.41%
Spring Wheat Sep 12 $7.3125, down 2.25 -0.31%
Spring Wheat Dec 12 $7.39, down 2.5 -0.34%
Light crude oil in New York closed at $97.08 per barrel, up 27 cents.
The Canadian dollar noon rate was 99.83 cents US, little changed from 99.85 cents the previous trading day.
The U.S. dollar at noon was $1.0017 Cdn.
In unofficial early tallies:
Toronto Stock Exchange S&P/TSX composite index finished up 61.16 points, or 0.5 percent, at 11,736.17. It snapped a string of six straight losing sessions that saw the TSX fall more than five percent.
The Dow Jones industrial average rose 19.98 points, or 0.16 percent, to 12,855.04 at the close.
The Standard & Poor’s 500 Index rose 3.41 points, or 0.25 percent, to 1,357.99.
But the Nasdaq Composite Index fell 1.07 points, or 0.04 percent, to close at 2,933.64.
