Record corn production and a bumper soybean harvest are testing the railways, highways and waterways that move crops to market.
Winter doesn’t officially begin until next week, but the Jetstream has already pushed cold, Artic air well into the Mississippi Valley. Like the river itself, grain shipments on the Mississippi have slowed to a trickle, and barges are being delayed from Minnesota to major export terminals near the Gulf of Mexico.
The Army Corps of Engineers said this week that contractors will remove about 2,800 cubic yards of rock over the next several months to ensure that America’s primary grain export corridor remains open through the winter.
And against that backdrop, the Agriculture Department released its latest estimates on supply and demand.
USDA’s December supply and demand report focused heavily on demand. And government analysts increased domestic wheat supplies while cutting corn and soybean ending stocks.
Despite proposed cuts to the Renewable Fuels Standard, ethanol production is on the rise. And with corn exports expected to be higher, USDA officials reduced domestic carryover by 5 percent to nearly 1.8 billion bushels. The resulting stocks-to-use ratio fell from last month’s report to 13.7 percent. According to some private analysts, that represents an increase over last season when the stocks-to-use ratio was a tight 7.4 percent. USDA analysts expect the season average price to fall to $4.40 per bushel.
The government cut its estimates on GLOBAL ending stocks by just over 1 percent to 162.5 million metric tons. Despite the reduction, the stocks-to-use ratio is 10 percent higher than last season. This is the largest worldwide carryout in the last three seasons and many private forecasters see supply as being adequate.
USDA cut domestic soybean ending stocks by more than 11 percent to 150 million bushels. The resulting stocks-to-use ratio of 4.6 percent is even with last season but tight by historical standards. Private prognosticators believe there is adequate supply but little room for shortfalls in the South American crop. And after crunching all the numbers, government analysts are calling for the U.S. season-average soybean price of $12.15 per bushel.
GLOBAL soybean ending stocks were increased by less than one percent to 70.6 million metric tons. The stocks-to-use ratio of 26 percent has many private firms calling supply ample but caution that as countries like China begin to increase demand there will be little room for production shortfalls.
Projected ending stocks for domestic wheat were increased by almost 2 percent to 575 million bushels. The stocks-to-use ratio fell to 24 percent which follows a five-year downward trend. Private analysts noted wheat has failed to rebuild supplies like other feed grains but believe there is ample supply to satisfy demand. The government’s projected season-average price is $6.90 per bushel, down a dime over last month’s report.
And GLOBAL wheat ending stocks rose a scant 2 percent to 182 million metric tons. The resulting stocks-to-use ratio is even with last season at 26 percent but private experts noted this is the fifth season without an increase. While analysts believe supplies will comfortably meet demand, they said ending stocks will decline from burdensome to adequate.