September Supply-Demand update

Minor revisions were made to the monthly reports. We have an audio report from RFD Radio's Al Jarand.

Compiled by staff

Published: Sep 12, 2012

WHEAT: The 2012/13 U.S. wheat balance sheet is unchanged this month; however, small by-class adjustments are made to projected exports and stocks. Projected exports for Hard Red Winter wheat are lowered 25 million bushels with Hard Red Spring and White wheat exports raised 15 million bushels and 10 million bushels, respectively. Corresponding changes are made to projected ending stocks for these three classes. The projected range for the 2012/13 season-average farm price is lowered to $7.50 to $8.70 per bushel compared with $7.60 to $9.00 per bushel last month. Prices reported for the summer months, when producers typically market nearly half the crop, have remained well below cash bids and futures prices, suggesting substantial forward pricing by producers earlier in the year.

CORN: U.S. corn supplies for 2012/13 are projected 108 million bushels higher as an increase in expected beginning stocks more than offsets lower production this month. Exports for 2011/12 are lowered 10 million bushels reflecting the slowing pace of shipments during August. Feed and residual use for 2011/12 is lowered 150 million bushels based on the record level of crop maturity and harvest progress as of September 1. State-level crop progress reports indicate that nearly 11 percent of the 2012 corn crop was harvested before the September 1 start of the 2012/13 marketing year. Based on state-by-state production forecasts from the September 12 Crop production report, nearly 1.2 illion bushels of new-crop corn are estimated to have been available for use before the end of the old-crop 2011/12 marketing year. This is up more than 700 million bushels from a year ago. Early new-crop corn use is expected to displace use of 2011 old-crop corn and boost old-crop inventories on September 1. As a result, early new-crop usage reduces the feed and residual calculation in the balance sheet.

Total U.S. corn use for 2012/13 is raised this month with higher expected feed and residual disappearance more than offsetting lower projected exports. Feed and residual disappearance is projected 75 million bushels higher, in part reflecting higher expected September-December disappearance with the expected rise in early new-crop usage during the 2011/12 marketing year. Exports for 2012/13 are projected 50 million bushels lower with increased competition from lowerpriced South American supplies. Ending stocks for 2012/13 are projected 83 million bushels higher at 733 million. The projected range for the corn season-average farm price is lowered 30 cents on both ends of the range to $7.20 to $8.60 per bushel.

OILSEEDS: U.S. oilseed production for 2012/13 is projected at 82 million tons, down 1.4 million from last month. Lower soybean and cottonseed production is only partly offset by an increase for peanuts. Soybean supplies for 2012/13 are reduced due to lower forecast production and beginning stocks. Soybean production is projected at 2.634 billion bushels, down 58 million due to lower yields in the Midwest. Soybean exports are reduced 55 million bushels to 1.055 billion mainly due to reduced supplies. Soybean crush is reduced 15 million bushels to 1.5 billion, the lowest since 1996/97. The reduction reflects lower projected soybean meal exports and domestic soybean meal consumption. Although soybean ending stocks are projected unchanged at 115 million bushels, they would fall to a 9-year low. Other changes for 2012/13 include reduced soybean oil production and
ending stocks.

Soybean crush for 2011/12 is increased 15 million bushels to 1.705 billion reflecting higher-than-expected crush reported for July. Soybean exports are increased 10 million to 1.36 billion. Residual use is lowered 10 million bushels reflecting the impact of early harvest of the 2012/13 crop in the South. Ending stocks are projected at 130 million bushels, down 15 million from last month. Other changes for 2011/12 include increased soybean oil production, exports, and ending stocks and increased domestic disappearance of soybean meal.

The U.S. season-average soybean price for 2012/13 is projected unchanged at $15.00 to $17.00 per bushel. Soybean meal prices are projected at $485 to $515 per short ton, up $25.00 on both ends of the range. Soybean oil prices are projected at 54 to 58 cents per pound, up 1 cent on both ends of the range.

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