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WASDE Reveals Late Rise in Corn and Soybean Production Level

posted on November 9, 2012

The government released its latest trade figures this week. And the numbers indicated modest improvement.

According to the Commerce Department, America’s cavernous trade deficit narrowed in September to $41.5 billion -- its lowest level in nearly two years.

U.S. imports rose 1.5 percent to $228.5 billion, due primarily to a surge in consumer goods and higher oil prices.

But exports climbed 3.1 percent to an all-time high of $187 billion, reflecting strong demand for commercial aircraft, heavy machinery and farm goods.

The impact of rising U.S. agricultural exports also was noted Friday in the USDA’s latest estimates of global supply and demand.

WASDE Reveals Late Rise in Corn and Soybean Production Level

A late season bump in yield for corn and soybeans boosted USDA’s crop production report.

Government analysts increased U.S. corn production estimates 19 million bushels to 10.7 billion bushels. Despite the gain, that would be the lowest production since 2006. The national average yield rose fractionally to 122.3 bushels per acre.

When considered with projected demand, the numbers result in a razor-thin stocks-to-use ratio of 5.8 percent. While tight by historic standards, the figure is still well above the 5.0 percent seen in 1996.

Globally, corn carryout continued to shrink putting the world’s stocks-to-use ratio at 13.8 percent -- its lowest level in nearly 15 years.

Despite decreased supplies, USDA lowered its estimate on season average price range by 20 cents, to a range of $6.95 and $8.25 per bushel.

USDA pegged the average soybean yield at 39.3 bushels per acre. If realized, U.S. soybean production will hit 2.97 billion bushels – 4 percent lower than last year and 12 percent lower than the record year of 2010.

Domestic soybean ending stocks figures were held at the razor thin stocks-to-use ratio of 4.6 percent – the tightest margin since 2010. U.S. exports rose slightly to 98.5 billion bushels due to increased demand.

The global soybean stocks-to-use ratio is projected at 23 percent. While deemed adequate by some private firms, estimates of strong demand from China, were tempered by predictions of a record South American crop.

The average soybean price range fell again this month, and is estimated to be between $13.90 and $15.90 per bushel.

U.S. wheat production estimates held steady at 2.26 billion bushels. Despite increased feeding the stocks-to-use ratio was estimated at 29 percent -- the lowest level in four years.

The projected average price is $7.75 to $8.45 per bushel decreasing the range by a dime.

The market took the news in stride as prices moved only slightly higher on Friday.

Tags: agriculture bushels corn Iowa production soybeans stocks to use WASDE wheat


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