October 13, 2011
Lift in USDA's estimate for world grain supply dampens crop markets
USDA increased its estimates for world grain supplies, which had the effect of dampening grain and oilseed futures on Wednesday (Oct 12) morning.
However, the market did not give back all the gains made in Tuesday's (Oct 11) sharp rally.
November canola was trading at US$530.90 per tonne, down US$4.30 (0.8%). On Oct 11, it rose to US$16.60 per tonne.
December corn is down about 2% and November soy is down about a half a percent.
In almost all crop categories, the USDA says there is a little more grain available than had been expected last month. Production problems in the US this year are more than made up by production increases in the former Soviet Union, China and Australia.
In the US, an upward revision in corn carry in stocks more than offset a slight decline in the 2011-12 crop.
USDA kept its corn yield estimate at 148.1 bushels per acre but lowered its harvested acreage to 83.9 million acres from 84.4 million in the previous report.
It also slightly reduced its forecast for corn exports. The result is a forecast for year end stocks of 866 million bushels, up from 672 million in the September report.
However, that is still down from last year's 1.13 billion bushels.
Globally, USDA raised its forecast for Chinese corn production by four million tonnes to a record 182 million tonnes. It also raised its production estimates for corn production in the former Soviet Union.
In soy, USDA slightly lowered its domestic production forecast to 3.06 billion bushels from 3.085 billion. It also lowered its carry in stocks.
Its forecast for year end stocks was lowered to 160 million bushels, down from 165 million in the September report and down from last year's 215 million.
In wheat, it lowered US production but that was more than offset by increased estimates of European, Australian and Kazakhstan production. It also lowered its forecast for world wheat consumption.
Global ending stocks of wheat were increased to 202.37 million tonnes from 194.59 million in the September report. Last year's global ending stocks were 195.6 million tonnes.
USDA put the domestic hard red spring wheat crop at 405 million bushels, down from the September estimate of 475 million and 570 million last year.
USDA pegged domestic durum production at 52 million bushels, down from the September estimate of 57 million and 106 million last year.
It put oats production at 54 million bushels, down from 57 million in September and 81 million last year.
US canola production was also hammered lower due to weather challenges in North Dakota. USDA pegged production at 694,980 tonnes, down from 1.11 million tonnes last year.