Chad Hart, ISU Extension Grain Marketing Specialist, provides a summary of the USDA December Crop Reports.
USDA updated its crop production, stocks, and use estimates today. And if the market was looking for bearish information, the reports provided it.
For corn, national average yields are projected at 165.2 bushels per acre, up 2.3 bushels from last month’s record estimate. Corn production is projected at 13.15 billion bushels, up 230 million bushels. With this revision, the 2009 crop becomes the largest corn crop the U.S. has ever produced, exceeding the 2007 crop by 113 million bushels. For soybeans, national average yields are projected at 44 bushels per acre, up 0.7 bushels from last month. Soybean production is projected at a record 3.36 billion bushels. So both the corn and soybean yield and production records fell in 2009.
The stocks report showed corn stocks are up 9 percent from last year, at 10.9 billion bushels. The stock situation was helped by a larger corn disappearance over the first three months of the marketing year as 3.89 billion bushels of corn were used, versus 3.64 billion bushels last year. But the record size of this year’s crop more than offset the strong disappearance numbers and stocks increased. A similar story holds for soybeans. Soybean stocks are up 3 percent from last year even though disappearance from September to November was 30 percent higher than last year.
World Ag. Supply and Demand Estimates:
On the demand side, soybean demand continues to build. Soybean exports were raised again, another 35 million bushels to 1.375 billion, based on continued Chinese demand. But some other soybean markets, such as Taiwan, Egypt, and Canada, have grown year over year as well. Soybean crush is projected at 1.71 billion bushels, up 15 million on the strength of soybean meal exports. The demand growth is greater than the production update, so soybean ending stocks for the 2009/10 marketing year are projected at 245 million bushels, down 10 million. With the boost in soybean exports and crush and the reduction in ending stocks, USDA raised the midpoint of their season-average price range to $9.65 per bushel, up 15 cents from last month. For corn, feed and residual demand was raised to 5.55 billion bushels, based on the stock disappearance numbers. Ethanol demand held at 4.2 billion bushels, but food and seed demand was lowered 10 million bushels as shipments of high fructose corn syrup were off. Corn exports were held steady at 2.05 billion bushels. The record crop pushed projected 2009/10 corn ending stocks to 1.764 billion bushels, up 89 million. The midpoint of USDA’s corn season-average price range was raised to $3.70 per bushel, up 15 cents.