Urbana, Illinois
January 12, 2009
On January 12, the USDA released
its
Annual Crop Production report, the quarterly
Grain Stocks
report, the annual
Winter Wheat Seedings report, and the monthly
update of world supply and consumption forecasts, which
University of Illinois Extension Economist Darrel Good calls
bearish for corn and soybean prices but more friendly for wheat.
"These reports were especially negative for corn prices
and will likely end the month-old rally in prices even with some
worries about the Argentine crop, and prices could decline to
the level of early December," Good said.
The larger projection of year-ending stocks and the slower rate
of consumption suggest that corn acres may not have to increase
much in 2009.
"The reports were less negative for soybean price
prospects, but the larger inventory of U.S. soybeans will offset
some of the concerns about the Argentine crop. An increase in
U.S. acreage is not needed in 2009," Good said.
"On the surface, the winter wheat seedings report was a
bit friendly. However, wheat prices will be pressured by lower
corn and soybean prices," he said.
The final estimate of the size of the 2008 U.S. corn crop was
12.101 billion bushels, 81 million larger than the November
forecast. The larger estimate reflected an increase in the
estimate of planted and harvested acreage and a 0.1 bushel
increase in the estimate of the U.S. average yield.
"Stocks of corn on December 1, 2008 were estimated at 10.084
billion bushels, only 194 million less than on the same date
last year. The stocks estimate implies that only 3.645 billion
bushels of corn were consumed during the first quarter of the
2008-09 marketing year, 423 million less than the record
consumption of a year ago. Exports were about 238 million
bushels less than those of a year ago, while domestic use was
down about 185 million bushels," Good said.
The lower-than-expected rate of domestic use during the first
quarter of the year resulted in a lower forecast of use for the
year.
"The USDA now projects domestic feed and residual use during the
current marketing year at 5.3 billion bushels, 50 million below
the December forecast and 638 million less than use of a year
ago," Good said. "Food, seed, and industrial use of corn is
projected at 4.9 billion bushels, 135 million below the December
forecast. Of that total, ethanol use of corn is projected at 3.6
billion bushels, 574 million more than use of a year ago, but
100 million less than forecast last month."
Marketing year corn exports are now expected to reach only 1.75
billion bushels, 686 million less than the record of a year ago
and 50 million less than projected in December. Year-ending
stocks are now forecast at 1.79 billion bushels, 316 million
above the December projection and 166 million larger than stocks
at the beginning of the year.
As for soybeans, the 2008 U.S. soybean harvest was estimated at
2.959 billion bushels, 38 million larger than the November
forecast. The estimate of planted acreage was reduced, but the
estimate of harvested acreage was increased. In addition, the
estimate of the U.S. average yield was increased by 0.3 bushels,
to 39.6 bushels. Stocks of soybeans on December 1, 2008 were
estimated at 2.276 billion bushels, about 85 million bushels
smaller than the inventory of a year ago.
"The stocks estimate implies that about 898 million bushels of
soybeans were used during the first quarter of the 2008-09
marketing year," said Good. "Exports were nearly 60 million
bushels larger than those of a year ago, while the domestic
crush was down by 47 million bushels. For the year, the USDA
increased the forecast of exports by 50 million bushels and
reduced the forecast of the domestic crush by 30 million
bushels."
Year-ending stocks are now forecast at 225 million bushels, 20
million above the December forecast.
"For the 2008-09 wheat marketing year, the USDA lowered the
forecast of feed and residual use by 30 million bushels and the
forecast of seed use by 2 million bushels. As a result, the
projection of year-ending stocks was increased by 32 million
bushels, to a 7-year high of 655 million bushels," Good said.
The estimate of 2008 winter wheat seedings at 42.098 million
acres is 4.183 million less than acreage seeded a year earlier.
Seedings of soft red winter wheat are down almost 3 million
acres. Seedings declined by 350,000 acres in Arkansas and
Illinois and by 450,000 acres in Missouri. |
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