- U.S. corn ending stocks have declined to dangerously low levels, meaning price rationing will likely continue.
- Corn used for ethanol was raised 100 million bushels due to record ethanol production in December.
- Soybean exports are projected at a record 1.590 billion bushels.
U.S. ending stocks for corn and soybeans declined further from last month, based on projected lower yields and continued strong demand, according to USDA’s monthly update of last year’s crops.
In its Jan. 12 Crop Production Report and World Agricultural Supply and Demand Estimates, USDA also raised projected U.S. production for cotton and rice.
In a Minneapolis Grain Exchange press briefing on the report, Peter Georgantones, Abbott Futures, said the competition for acres between corn, cotton, wheat and soybeans this spring is bound to push prices higher.
With the lowering of corn yield and very low stocks numbers, “there is going to have to be a rationing process taking place in corn. That’s why we’re at $6.25 now, but I think we’re going to have to ration more. We’ll have to fight for acres with other commodities.”
Estimated U.S. corn production is 93 million bushels lower based on a 1.5-bushel-per-acre reduction in the national average yield, according to USDA. Corn used for ethanol was raised 100 million bushels due to record ethanol production in December.
Projected corn ending corn stocks for 2010-11 were lowered 87 million bushels to 745 million, down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5 percent, the lowest since 1995-96 when it dropped to 5 percent.
Lower projected U.S. corn production was a big reason behind a reduction in global corn production as well. Global corn ending stocks are projected 3 million tons lower with more than two-thirds of the reduction in the United States.
U.S. soybean production is estimated at 3.329 billion bushels, down 46 million bushels from the previous month. Soybean yield is estimated at 43.5 bushels per acre, down from last year’s record of 44 bushels per acre. Soybean exports are projected at a record 1.590 billion bushels, while ending stocks are projected at 140 million bushels, down 25 million from last month.
Global soybean production is projected at 255.5 million tons, down 2.3 million tons.
The U.S. 2010-11 rice crop is estimated at 243.1 million hundredweight, up 1.5 million hundredweight, or 0.6 percent. The increase is due to higher projected yields. Average yield is estimated at 6,725 pounds per acre, up 56 pounds per acre from last month, but a decline of 360 pounds per acre from the previous year.
Projected rice imports for 2010-11 were lowered 1.5 million hundredweight to 18 million with the decline all in long grain. Projected rice exports were lowered 2 million hundredweight to 117 million hundredweight, with long-grain lowered 4 million and combined medium- and short-grain raised to a record 38.0 million.
Rice ending stocks for 2010-11 are projected at 51.8 million hundredweight, up nearly 2 million from last month and the largest stocks since 1986-87. Long-grain rice ending stocks are forecast at a record 41.9 million hundredweight, up 2.3 million from last month. Combined medium- and short-grain rice ending stocks are projected at 8.4 million hundredweight, fractionally lower than last month, and a decrease of 3.7 million from 2009-10.
Global rice production declined from last month primarily due to a smaller crop in Egypt. World ending stocks are projected at 94.4 million tons, down 400,000 tons from last month and last year.
U.S. cotton production for 2010-11 was raised 47,000 bales, due mainly to increases for California and Georgia. Domestic mill use is raised 50,000 bales to 3.6 million bales, reflecting stronger-than-expected activity in recent months. Exports and ending stocks are unchanged.
Global cotton production was reduced marginally while worldconsumption was raised slightly.
U.S. wheat ending stocks for 2010-11 are projected 40 million bushels lower due to a 50 million bushel increase in exports. At a projected 1.3 billion bushels, exports would be the highest since 1992-93. Most of the increase is expected in hard red winter and soft red winter wheats. Global 2010-11 wheat supplies are raised slightly from last month.