August 13, 2010

 

USDA revises up American corn, soy production forecast

 

 

The USDA has revised its forecast for US corn production to 13.365 billion bushels for the 2010-2011 marketing season, from its July figure of 13.245 billion bushels.

 

Corn yields were seen higher at 165 bushels/acre, against a 163.5 bushels/acre figure reported in July.

 

"The survey-based yield forecast of 165 bushels per acre is up 1.5 bushels from last month's projection and 0.3 bushels above last year's record," USDA said in its report.

 

Morgan Stanley said in a research note published after the USDA report that, despite the higher yields, there is still room for downside risk. "We maintain that higher than average temperatures, and normal precipitation expected over the next 14 days in the Eastern Corn Belt, presents downside risk to yields," the bank said.

 

Beginning stocks were projected 52 million bushels lower at 1.426 billion bushels, reflecting higher expected exports, corn use for sweeteners and starch, and a small reduction in projected imports for 2009-2010.

 

Domestic corn use for the 2010-2011 marketing season was raised by 30 million bushels to 6.09 billion bushels on higher corn use for sweeteners and starch. Corn use for ethanol production was kept unchanged at 4.7 billion bushels.

 

Morgan Stanley, however, said it still sees an upside of 20 million bushels for the figure.

 

Exports were forecast up by 100 million bushels to 2.05 billion bushels "as tighter foreign supplies of wheat and coarse grains raise prospects for US corn shipments," the USDA said.

 

Average farm prices for the period were raised by five cents at each end of the range to US$3.50-4.10/bushel.

 

Despite higher production, ending stocks were projected down 61 million bushels at 1.3 billion bushels, the lowest in four years.

 

The USDA also raised its soy production to 3.433 billion bushels from the 3.345 billion bushels forecast in July. Soy yields were also seen higher at 44 bushels per acre, 1.1 bushels above last month's yield projection. Projected soy exports were raised by 65 million bushels to 1.435 billion.

 

"The sharp increase in exports reflects strong export sales, especially to China, stronger projected import demand for China, and reduced soy stocks in South America at the beginning of the 2010/11 marketing year," the USDA said in its report.

 

Chinese soy imports were raised to 52 million tonnes.

 

The US season-average soy price for 2010-2011 was projected at US$8.50-10 bushels/acre, up 40 cents on both ends of the range. Soy ending stocks were projected at 360 million bushels, unchanged from July.

 

Soyoil production was forecast higher at 18.81 billion pounds, up from July's figure of 17.755 billion pounds. Soyoil for biodiesel production was seen unchanged at 2.9 billion pounds. Soyoil prices were projected at 36.5 to 40.5 cents per pound, up 2.5 cents on both ends of the range.