USDA report bullish for beans and corn

USDA is projecting a smaller U.S. corn crop of 11.7 billion bushels, down 390 million from May based on lower expected average yields of 148.9 bushels per acre. The estimate is 5 bushels below last month’s estimate, and 6 bushels below the 1990-2007 trend.

USDA’s June 10 Crop Production Report and World Agricultural Supply and Demand Estimates reflected slow planting progress, slow crop emergence, and persistent, heavy rainfall across the Corn Belt. The latest rounds of torrential rainfall are expected to reduce plant populations and nitrogen availability, particularly for corn planted after mid-May.

Corn exports are forecast 100 million bushels lower, reflecting tighter U.S. supplies and increased export competition with higher foreign production. Ending stocks for 2008-09 are projected at 673 million bushels, down 90 million bushels from last month, and 760 million below the 2007-08 forecast. If realized, 2008-09 ending stocks would be the lowest since 1995-96.

Soybean ending stocks for 2008-09 are projected at 175 million bushels, down 10 million from last month. Production remains unchanged from last month at 3.1 billion bushels.

USDA also reduced its estimate of soybean oil used for biodiesel production for both 2007-08 and 2008-09 as high soybean oil prices relative to other fats and oils have reduced the soybean oil share of total biodiesel production more quickly than expected.

Global soybean production is projected to increase 10 percent to 240.7 million tons. The Brazil crop is projected at 64 million tons, up 3 million tons from 2007-08. The Argentina crop is projected at 48 million tons, up 1 million tons from 2007-08 based on a small increase in area and yield.

USDA raised export projections for cotton by 500,000 bales to 15 million bales, mainly due to lower foreign production. Ending stocks were reduced to 5.4 million bales, or 28 percent of use.

USDA’s world production estimate of 116.4 million bales is 1.6 million bales lower than last month, with year-to-year declines for the United States, Brazil, Turkey, Central Asia, and Egypt. The declines are partially offset by increases for India, the African Franc Zone, Australia, and Pakistan. World ending stocks of 54.1 million bales are down about 1.5 million from last month.

U.S. rice exports are projected at 99 million hundredweight. The season-average farm price for 2008-09 is projected at $16.50 to $17.50 per hundredweight, down $2 per hundredweight on each end from a month ago. The decline in the price forecast reflects the easing of some global export restrictions. The 2008-09 price forecast is still at a record despite the reduction.

Global 2008-09 rice production was lowered 600,000 tons due primarily to a reduction for Burma. Global ending stocks are projected at 81.5 million tons, down 1.1 million tons from last month, but up 4 million tons from 2007-08.

U.S. 2008-09 wheat supplies are projected higher this month on higher production and increased carryin. Winter wheat production is forecast 40 million bushels higher with higher yields expected in most states. Based on June 1 conditions, the U.S. yield is forecast at 45.3 bushels per acre, up a bushel from last month and 3.1 bushels more than last year.

USDA raised global wheat production for 2008-09 by 6.9 million tons to a record 663 million tons, prompted by last year’s record prices and relatively good growing conditions worldwide. World exports were raised 1 million tons.

World consumption was raised 3.9 million tons mostly reflecting higher feeding and food use in China and higher feeding in the United States. World ending stocks are projected 8.1 million tons higher this month at 132.1 million tons, up 16.9 million from 2007-08 and the highest since 2005-06.

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