Chad Hart , ISU Extension Grain Marketing Specialist, provides a summary of the latest crop report from USDA.
The changes in this morning’s USDA reports were few and far between, but they are enough to provide additional fuel for higher corn prices. The 2010/11 ending stocks were reduced to 675 million bushels or 5% of total corn use, a percentage stocks level we haven’t seen since 1995/96. During that year, corn prices rose strongly in the spring and early summer of 1996 to ration demand for the crop. Currently, prices are already strong, but the USDA projections show that rationing has not taken hold. The drop in stocks was driven by two increases in demand, a 50 million bushel increase for ethanol and 20 million increase for sweeteners and starches. While ethanol margins have shrunk over the couple of months, ethanol production has continued at record levels. And with sugar prices at very strong levels as well, the market for corn sweeteners has been brisk. The midpoint of USDA’s 2010/11 season-average price range has moved up 10 cents to $5.40 per bushel.
For soybeans and wheat, there were no changes in overall U.S. supplies or use. Ending stocks remained at 140 million bushels for soybeans and 818 million bushels for wheat. The midpoint of USDA’s 2010/11 season-average price range for soybeans stayed at $11.70 per bushel. For wheat, the midpoint price shifted up 5 cents to $5.70 per bushel.
The crops in Argentina continue to get smaller. USDA lowered their Argentine crop estimates by 1.5 million metric tons (59 million bushels) for corn and 1 million metric tons (37 million bushels) for soybeans. On the soybean side though, there was offsetting news as Brazil’s soybean crop is now projected to be at record production. Worldwide stock levels for both corn and soybeans are tightening as well as use continues to exceed supply.
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