January 16, 2012

US feed grain supplies for 2011/12 are expected to be higher due to greater corn production, which is estimated 48 million bushels higher with a 0.5-bushel-per-acre increase in yield and a 45,000-acre increase in harvested area.

Sorghum production is lowered 32 million bushels with yields estimated 0.9 bushels per acre lower and harvested area reduced 503,000 acres.

Corn use for 2011/12 is raised with higher exports. Exports are projected 50 million bushels higher reflecting the strong pace of sales to date and reduced prospects for Argentina. Ending stocks are projected two million bushels lower at 846 million bushels.

The 2011/12 season average farm price for corn is lowered 20 cents per bushel on each end of the range to US$5.70 to US$6.70 per bushel. Prices received by producers to date have remained well below prevailing cash bids limiting the upward potential for the season-average farm price.

Other 2011/12 feed grain changes this month include a reduction for sorghum feed and residual use and an increase for barley feed and residual use, as indicated by the December 1 stocks. Sorghum exports are reduced with the smaller crop and sluggish export sales. The sorghum farm price is projected 10 cents per bushel lower on both ends of the range to US$5.60 to US$6.60 per bushel based on reported prices to date.

The barley farm price is projected at US$5.15 to US$5.65 per bushel compared with US$5.20 to US$5.80 per bushel last month as reported farm prices for malting barley drag down the season average for all barley. The oats farm price range is narrowed five cents per bushel on both ends of the range to US$3.25 to US$3.55 per bushel.

Global coarse grain supplies for 2011/12 are nearly unchanged this month as higher corn production in the United States, Ukraine, EU-27, and Russia is mostly offset by lower expected corn production in Argentina and the lower sorghum production estimate for the United States. Global barley and oats production are also raised, mostly reflecting higher crop estimates from Russia.

Argentina 2011/12 corn production is lowered three million tonnes as extended dryness since late November and periods of extreme heat in late December and early January have sharply reduced yield prospects. Recent rains have brought much needed relief from high temperatures and dryness and are expected to stabilise crop conditions, but substantial damage has been done, especially to corn that was exposed to heat during pollination and early grain fill.

Corn production is raised 1.5 million tonnes for Ukraine based on the latest official indications of record yields and output. EU-27 and Russia corn production are each raised 0.4 million tonnes based on the latest official estimates. Brazil corn production is unchanged as rising area prospects for second crop corn offset a reduction in first crop yields resulting from December and early January dryness in the southern growing areas.

Global corn trade for 2011/12 is raised slightly with lower projected corn exports from Argentina more than offset by higher exports from the United States and Russia. Imports are raised one million tonnes for China, more than offsetting reductions for Syria and Taiwan. World corn ending stocks are raised one million tonnes as lower stocks in Argentina are more than offset by higher stocks in Ukraine and China. At 128.1 million tonnes, global stocks are nearly unchanged from 2010/11.