Market News

Supply and demand numbers near expectations

USDA’s supply and demand numbers didn’t hold many surprises but one agricultural economist told Brownfield there is a story when you look at the balance sheets.

University of Illinois Extension Economist Darrel Good pointed to smaller feed use and average yield estimates for corn, an increase in the use estimates for soybeans and minor tweaks to winter wheat production and feed use.

Good thinks that markets should stay choppy until the USDA’s corn and soybean planted acreage estimates at the end of the month. He adds, “In general, I think prices will be well supported and maybe as we get into the heart of the summer, I would not be surprised to see a little bit more price strength as we move into some periods of dry weather, hot weather, [that] might put some stress on the corn crop.”

2008/09 U.S. wheat ending stocks came out at 669 million bushels, unchanged from May’s update. The 2008/09 marketing year for wheat ended June 1. The average farm price is estimated at $6.85 per bushel, compared to $6.48 for 2007/08.

2009/10 U.S. wheat ending stocks were reported at 647 million bushels, up 10 million from the last update and larger than expected before the report. USDA now sees total production at 2.016 billion bushels, down 10 million from May, bringing total supply to 2.8 billion bushels. The food and seed use estimates were left unchanged and the food use projection was lowered 20 million bushels to 220 million, lowering the domestic use forecast to 1.253 billion bushels. With exports unchanged at 900 million bushels, that lower domestic use estimate takes total use to 2.153 billion bushels. The average 2009/10 farm price is estimated at $4.90 to $5.90 per bushel.

2008/09 corn ending stocks were pegged at 1.600 billion bushels, unchanged from May. The average 2008/09 farm price is estimated at $4.10 to $4.30 per bushel, compared to $4.20 in 2007/08.

2009/10 corn ending stocks came out at 1.090 billion bushels, compared to 1.145 billion a month ago. USDA didn’t change it’s planted and harvested area estimates, but did lower the expected average yield by 2 bushels to 153.4 bushels per acre, taking production to 11.935 billion and total supply to 13.550 billion. The Ag Department lowered the feed use by 100 million bushels to 5.150 billion while leaving ethanol use steady at 4.1 billion bushels, leaving total domestic use at 10.560 billion bushels. USDA left the export estimate unchanged at 1.9 billion bushels, bringing total use for the marketing year to 12.460 billion bushels. The average 2009/10 farm price is estimated at $3.90 to $4.70 per bushel, compared to May’s range of $3.70 to $4.50.

2008/09 soybean ending stocks were reported at 110 million bushels, down 20 million from May’s projection. The average farm price for the current marketing year is estimated at $10 per bushel, compared to $10.10 for 2007/08.

2009/10 soybean ending stocks were placed at 210 million bushels, compared to 230 million a month ago. USDA didn’t make any changes to the production portion of the balance sheet but with corn planting delays, the end of the month report should have some revisions. With the 20 million bushel decline in old crop ending stocks, the total supply is pegged at 3.317 billion bushels. The USDA didn’t adjust the export, seed or residual use figures, leaving the total use projected at 3.107 billion bushels. In other words, the tightness of 2008/09 ending stocks in now making projected 2009/10 ending stocks even tighter. The average 2009/10 farm price is estimated at $9 to $11 per bushel, compared to $8.45 to $10.45 in the May update.

2008/09 soybean oil ending stocks came out at 3.013 billion pounds, compared to 2.703 billion last month. The average 2008/09 farm price is estimated at $.3350 cents per pound, compared to 2007/08’s average of $.5203.

2009/10 soybean oil stocks were reported at 2.648 billion pounds, compared May’s estimate of 2.383 billion. That’s on the month to month increase in 2008/09 stocks offsetting a lower domestic use estimate and expectations for a slight decrease in oil yield from crushing. The average farm price is estimated at $.33 to $.37 per pound.

2008/09 soybean meal ending stocks were placed at 300,000 short tons, steady with May’s report. The average 2008/09 farm price is estimated at $320 per short ton, compared to $335.94 for 2007/08.

2009/10 soybean meal ending stocks were reported at 300,000 short tons, unchanged from May. The USDA didn’t make any changes to the supply and demand balance sheet. The average 2009/10 farm price is estimated at $275 to $335 per short ton, compared to $260 to $320 in May’s report.

2008/09 world wehat ending stocks were pegged at 168.40 million tons, with feed use at 114.07 million and exports at 132.26 million tons.

2009/10 world wheat stocks came out at 182.65 million tons, compared to 181.90 million a month ago. Production was pegged at 656.06 million tons, down slightly from last month. The feed use and export use estimates were also trimmed a little, to 111.37 million and 123.22 million tons, respectively.

2008/09 world corn ending stocks were placed at 138.54 million tons, with exports at 77.93 million and feed use at 481.21 million tons.

2009/10 world corn ending stocks were reported at 125.46 million tons, compared to 128.19 million in May. Production is seen at 781.46 million tons, compared to 785.14 million a month ago. Feed use was placed at 482.51 million tons, down from the 484.60 million reported last month, but exports were raised slightly to 81.49 million tons.

2008/09 world soybean ending stocks came out at 41.85 million tons, with production at 210.91 million tons, the crush at 192.30 million and exports at 72.56 million tons.

2009/10 world soybean ending stocks were pegged at 51.02 million tons, down 860,000 from May. The production estimate was lowered from 241.72 million tons to 241.67 million. The global crush is pegged at 201.00 million tons and exports are seen at 75.35 million tons, both up modestly from last month.

2008/09 world soybean meal ending stocks were reported at 4.72 million tons with production at 151.43 million tons and exports at 53.04 million.

2009/10 world soybean oil ending stocks were placed at 4.99 million tons, compared to 4.96 million in May. Production is seen at 158.38 million tons and exports are pegged at 55.03 million tons, each up slightly from a month ago.

2008/09 soybean oil stocks came out at 2.53 million tons, with production at 35.70 million and exports at 9.23 million tons.

2009/10 soybean oil stocks were reported at 2.52 million tons, compared to 2.44 million a month ago. Production was just about steady, a little bigger, at 37.30 million tons, while exports were revised modestly lower to 9.83 million tons.

Darrel Good talks about the numbers and what it may mean for the markets (3 minutes)