Corn & Seed/Oil Commodities

[mikey]

US predicts healthy corn crop 
[14 May 2010] The US corn crop this year could reach a record 13.37 billion bushel said the USDA. This will set a record corn supply of 15.118 billion bushels in the 2010/11 (September-August) marketing year — more than enough to cater to rising exports and ethanol use, with end stocks of 1.818 billion bushels, up 5% from last year. USDA predicted corn exports in 2010/11 at 2 billion bushels, compared to 1.95 billion bushels expected in 2009/10, which it raised on larger supplies and lower prices. Corn prices were seen down to a range of USD 3.20-3.80 per bushel in 2010/11 from a tighter range of USD 3.50-3.70 in 2009/10.

[mikey]

Monsanto offers new GM corn varieties
[24 May 2010] Agricultural biotechnology firm Monsanto has applied with the Philippine government for approval to introduce its second generation Bt corn and Roundup ready corn. Dr Harvey Glick, Senior Director of Scientific Affairs for Asia said that field tests have already started in the company’s site in South Cotabato. He said Monsanto is also developing a “drought tolerant corn” variety, which they hope to be approved for use in the US in 2012. Last year, the Philippines targeted to plant 480,000 hectares of land for Bt corn, however, because of last year’s storm and the ongoing drought in the country, this is unlikely to be met. According to the Bureau of Agricultural Statistics, total corn production in the country actually contracted by 16.8% to only 1.6 million tonnes during the first three months of the 2010 compared to the same period last year.

[mikey]

CME: 2010 Corn Planting Substantially Complete
US - USDA’s weekly Crop Progress report indicates that 2010 corn planting is substantially complete as of Saturday with 93 per cent of intended acres planted, write Steve Meyer and Len Steiner.

That figure rivals the 2005 planting clip as of this week (95 per cent) for the fastest ever but the bulk of this year’s acres were planted earlier than those of 2005, driving high expectations for 2010 yields. As can be seen, this year’s pace is FAR AHEAD of 2009 when just over 60 per cent of corn acres had been planted by this date. While yields were record-large last year, late planting and cool summer weather negatively impacted the quality of last year’s corn crop and the performance of livestock this crop year.


Though corn planting was the fastest ever this year, corn emergence is still lagging the best-ever pace of 2000. As of May 23, 71 per cent of corn had emerged. That compares with 30 per cent last year, a computed 5-year average of 51 per cent and USDA’s published 5-year average of 62 per cent. The linear increases of 16 per cent per week over the past two weeks underscore the impact of cool, overcast, generally rainy weather in many major corn growing regions. The recent weather pattern has kept corn crop condition ratings near historical levels in spite of the record planting pace. 71 per cent of corn acres were rated good or excellent this week, up from 67 per cent last week. There was no rating for corn in last year’s concurrent week. This week’s 71 per cent good-excellent tied for fourth in the historical data with 1994’s 78 per cent being the highest on record.


Soybean planting is progressing at a far slower pace due to continuing wet weather in many areas. Only 15 per cent of total acres were planted last week, bringing the season-to-date total to 53 per cent. That compares to 48 per cent for the same week last year and a computed average of 66 per cent over the past 5 years. 24 per cent of soybeans had emerged as of Saturday. That number is sharply higher than last year’s 14 per cent but lower than the computed 5-year average of 27.2 per cent.

It is safe to say that the 2010 crop is progressing well at this point. Slower-than-average soybean planting poses little problem — at this point in time.

DLR readers are reminded of CME Group’s webinar regarding dried distillers’ grains (DDGs) coming up Wednesday, May 26 at 2:00 p.m. CDT. Readers can attend the session in-person at the Visito Center Auditorium at 141 W. Jackson St. or tune in on the internet by registering at www.cmegroup. com/ ddgwebinar. DLR author Dr Steve Meyer will be joined by Dr Darrell Mark of the University of Nebrasks to discuss the production, characteristics and uses of DDGs as well as the performance and costs impacts they have on livestock production.

For those who may not be familiar with DDGs — they are a primary co-product of ethanol production. Each bushel of corn that is fermented produces roughly 2.8 gallons of ethanol, 17 pounds of DDGs and 17-19 pounds of CO2. The trade of 56 pounds of corn for 17 pounds of DDGs is not necessarily a good one for the livestock and poultry sectors but that 17 pounds of usable feed ingredients has helped reduce diet costs from where they would have been had DDGs not been available. Since ethanol production converts the starch in corn into ethanol and CO2, DDGs are high in protein, fiber, fat and minerals. They still have a relatively high dietary energy content but that energy comes from fat instead of starch. Cattle and other ruminants can use the fiber and low-quality protein very efficiently. They can be added to hog and poultry rations but their relatively low-quality protein limits their usefulness to some degree. Tune in to learn more.

[mikey]

Philippine corn output down 16.8%
[31 May 2010] Philippine corn production suffered a setback in the first quarter of 2010. Corn output from January- March only reached 1.6 million tonnes, down 16.76% from 1.9 million tonnes during the same period in 2009. The contraction is blamed on the hot weather that has been plaguing the country, with production areas in major corn producing regions like Cagayan Valley, SOCCSKSARGEN, Western Visayas, Northern Mindanao and CAR contracting during the first three months. Valuewise, the sector also posted a decline with gross receipts only reaching PHP 18.6 billion (USD 399.62 million), down 28.52% from last year’s PHP 26.02 billion (USD 559.07 million), as average farm prices also dropped to PHP 11.61/kg (USD 0.25) from PHP 13.52/kg (USD 0.29). The drop in prices has been attributed to the weak demand by processors for white corn, as well as the low quality of grains and availability of imported feed substitutes for yellow corn.

[mikey]

Philippines import corn to fill local shortage 27 May 2010
Philippine feed millers imported 80, 000 tonnes of corn from Thailand to fill in the shortage caused by the El Nino, the Philippine Feed Millers Association Inc. said.
Related
The corn shipment arrived between the months of January to May at a price of $250 per ton.
 
Feed millers have also contracted 844,000 tonnes of feed wheat, a substitute for corn. A total of 500,000 tonnes of it have already arrived in the Philippines. The remaining volume is expected to arrive in the country in or before October.
 
Local corn production declined 16.8% to 1.8 million tonnes in the first quarter because of the El Nino, according to the Bureau of Agricultural Statistics (BAS).
 
BAS expects that, with the El Nino expected to last until June, corn production will decline further. For the period of January to September, BAS forecasts corn production to fall 17% to 4.6 million tonnes.
 
The Department of Agriculture said the dry spell has damaged around 500,000 tonnes of corn.
 
Feed millers face bad year
Feed millers are no longer keen on importing corn despite a drop in domestic output, because of weak demand from animal feed suppliers.
 
“The industry is not keen on bringing in more corn. We’re done importing [for 2010]," said an official of the Philippine Association of Feed Millers Inc.
 
The demand by pig and poultry feed suppliers has weakened, forcing many feed millers to pare production and plug their losses, the association official said.
 
Animal feed production is expected to decline by 10% to 4.9 million MT this year.
 
The association has booked up to 800,000 MT of feed wheat — a cheaper corn substitute — for delivery toward September 2010 to cover for the slack in imported corn. The landed cost of feed wheat is lower than that of corn.
 
This might be the most difficult year for feed millers, “probably because of the climate change factor. Animals are getting stressed. Raisers have started cutting down on volume," he said.
 

[mikey]

Higher corn output likely to ease Chinese price hike
[7 June 2010] China produced 163.97 million tonnes of corn in 2009, down 1.17%, according to data from the National Bureau of Statistics cited by the China National Grain and Oils Information Center (CNGOIC).  The figure was in line with CNGOIC's own estimate but higher than the expectation by some independent institutions due to drought. Many traders have ignored the CNGOIC estimate saying it may have been encouraged by overly-optimistic forecasts from local government officials. Expectations of a scant supply coupled with a recovery of demand from feed and corn processing industries, have pushed up China’s corn prices in some areas to a record level and prompted large imports from the US. Prof Cheng Guoqiang, a researcher with the State Council's Development Research Center pointed out that the price rise was partly due to the country’s reserves and poor logistics for transporting corn from the major growing areas in the northeast.

[mikey]

SMC takes over grains terminal
[17 June 2010] San Miguel Corporation (SMC) is taking over the operations of the Mariveles Grain Terminal, the most modern grain handling facility in the Philippines, after it acquired Mariveles Grain Corporation (MGC) from Asian Terminals Inc (ATI). MGC holds a permit to operate the Mariveles Grain Terminal until February 2033. It offers unloading, conveying, storage, outloading, weighing, bagging and sampling services and handles bulk cargo of commodities like wheat, soybean meal, corn and soybeans. The terminal can accommodate vessels of up to 70,000 deadweight tonnes, discharge cargo of up to 10,000 tonnes daily and store 180,000 tonnes of soybean meal and grain. SMC has been keen on acquiring MGC as this would help the company become a distribution and logistics powerhouse, as well as help SMC to expand the 500,000 tonnes annual capacity of its feed mill located near the grains terminal.

[mikey]

Smaller Planted Corn Acreage Surprises Trade
US - The Agriculture Department yesterday released the 2010 Acreage report, and the numbers point to less corn acres than markets had expected.



The new number should be favorable to the corn market, according to John Anderson, an economist with the American Farm Bureau Federation.

“Today’s acreage report is watched very closely by the trade because it is the first official estimate of actual planted acreage,” Dr Anderson said. “According to USDA’s National Agriculture Statistics Service (NASS), planted corn acreage is estimated at 87.9 million acres. This is much lower than anybody expected. Most in the trade were expecting more than 89 million corn acres. This is very supportive of the corn market.”

Planted soybean acreage, on the other hand, is generally on the high side of what many in the trade expected. NASS estimates 2010 soybean plantings at 78.9 million acres. This is a 1.4 million acres or 2 per cent increase from 2009, when soybean plantings totaled 77.45 million acres. Soybean planted acreage this year set a new record.

And while corn acreage is less than forecast, plantings are still near historic highs. Planted corn acreage in 2010 is up 1.4 million acres from last year. This marks the second consecutive increase in planted acreage to corn and the second highest acreage on record since 1946, only behind 2007.

Dr Anderson said good planting conditions for both corn and soybeans and generally favorable growing conditions point to favorable harvests.

“Crops look very good right now, and it is still possible that we could see record corn and soybean crops this year,” he said.

USDA also released its quarterly grains stocks report yesterday, showing corn stocks up 1 per cent from June 2009 and soybean stocks down 4 per cent. Corn stocks were lower than what the trade expected, which means more corn is being used than anticipated.

“Last year at harvest we had some problems with grain quality in corn. There has been quite a bit of discussion in the market about low test weight corn not going as far in livestock rations. For whatever reason, whether due to quality issues or just higher demand from the livestock and poultry sector, today’s corn stocks estimate suggests that feed use of corn has been larger than expected,” Dr Anderson said.

[mikey]

More corn and soybean planted
[5 July 2010] The USDA's hal yearly report estimates that U.S. farmers planted 87.872 million acres of corn and a record 78.868 million acres of soybeans in 2010, both 2% higher than last year. Compared to 2009, the largest increases in planted corn acreage were in Illinois and Kansas. Record high soybean acreages are estimated in Kansas, Nebraska, New York, and Pennsylvania and tie with the previous record highs in Minnesota and Oklahoma. Wheat acreage is estimated to be 54.3 million acres, down 8% from 2009. If the acres planted and trend yields are realized, the fall soybean and corn harvest may reach near-record levels, requiring more storage and/or transportation demand than normal.

[mikey]

Lower corn exports from China
[13 July 2010] Data from China Customs' suggest that the country’s total corn exports in June was 9,421 tonnes, down 41.56% from the previous month; while total exports for the first six month this year was 80,391 tonnes, an increase of 35% year-on-year. Meanwhile, China started to import more corn in April, with a large volume imported by Liuhe Group in June. A USDA report said that corn production in 2009/10 is estimated to drop 9% from the previous year to 150 million tonnes although government agencies reported a bumper harvest for the sixth consecutive year. Previous field observations in most of the major corn producing provinces in the northeast and the North China Plain revealed that corn yields were substantially impacted by adverse weather patterns.

[mikey]

Expectations Change on Supply and Consumption
US - Changing supply and consumption expectations were noted in the latest World Agricultural Supply and Demand Estimates report.



The USDA's July report of World Agricultural Supply and Demand Estimates contained a number of changes from the June report. Some of those changes were driven by information in the USDA's June 30 Acreage and Grain Stocks reports and some were driven by changing US and world production prospects.

For corn, the USDA lowered the projection of domestic stocks on 1 September 2010 by 125 million bushels, reflecting the smaller than expected 1 June inventory reported earlier. The change was accommodated by a 175 million bushel increase in the projection of feed and residual use and a 50 million bushel reduction in the projection of ethanol use of corn. For the 2010-11 marketing year, the projection of production was reduced by 125 million bushels, expectations for exports were reduced by 50 million bushels, and the projection of ending stocks was reduced by 200 million bushels. Those ending stocks are projected at a four year low of 1.373 billion bushels. That projection represents 10.3 per cent of projected use, the lowest in seven years. The projection of coarse grain production in Russia was reduced by 11 per cent from the June projection. World coarse grain production in 2010-11 is still expected to be record large. World stocks are expected to decline modestly during the year ahead and are projected at a three year low.

For wheat, the estimate of use during the 2009-10 marketing year that ended on 31 May was reduced by 44 million bushels to accommodate the larger-than-expected 1 June inventory estimate released on 30 June. About half of the reduction was in exports and half in the feed and residual category. For the 2010-11 marketing year, the forecast of domestic production was increased by 149 million bushels, reflecting a larger winter wheat forecast and the first forecast of spring wheat production. The 2010 wheat crop is now expected to equal the 2009 crop even though seeded acreage declined by 4.8 million acres. The large crop forecast reflects fewer unharvested acres than last year and a record US average yield of 45.9 bushels per acre.

The 2010-11 marketing year projection of US wheat exports was increased by 100 million bushels to a total of one billion bushels. That projection is 135 million above the last year's exports and reflects a large reduction in production prospects outside the US. Foreign wheat production in 2010-11 is projected at 22.074 billion bushels, 422 million smaller than the June projection and 690 million bushels smaller than last year's crop. Large year-over-year declines are expected in Canada (220 million), Russia (320 million) and Kazakhstan (110 million). The US share of the world export market is projected at 20.7 per cent, up from 18.3 per cent last year.

Year ending domestic stocks of wheat are projected at a 23-year high of 1.093 billion bushels. Only the stocks of soft red winter wheat are expected to decline. That decline reflects a 34 per cent year-over-year reduction in production. World wheat stocks are expected to decline modestly from the very large level of a year ago.

For soybeans, the projections of both the domestic crush and exports during the current marketing year were increased by five million bushels and the projection of year ending stocks was reduced by 10 million bushels, to a total of 175 million. The projection of 2010 production was increased by 35 million bushels, reflecting the larger acreage estimate released on 30 June. The projection of 2010-11 year ending stocks was unchanged at 360 million bushels as a result of a five million-bushel increase in the projection of crush and a 20 million-bushel increase in projected exports.

Changes for soybeans in the rest of the world were minor, with an 18 million bushel increase in the estimated size of the 2010 Argentine crop. Stocks in the rest of the world are expected to decline modestly during the upcoming marketing year, but to remain at very large levels.

From the lows on 29 June to the post-report highs, December 2010 corn futures increased by $0.55, November 2010 soybean futures increased by $0.51, and September 2010 wheat futures increased by $0.935. As of the close on 9 July, prices were off those highs, with the largest decline coming in wheat prices. Winter wheat producers likely benefited the most from the price rally since a large portion of the crop is typically sold in the immediate post-harvest period.

Taken together, the USDA reports appear to be most constructive for corn prices. The market will now anxiously anticipate the corn and soybean production forecasts to be released on 12 August. There are very mixed ideas about the effect of an extremely wet June and very mixed July weather conditions on the potential size of the crop.

[mikey]

China’s grain output expected to fall slightly
[15 July 2010] An agricultural expert has warned of a "slight drop" in China's total grain output this year as a result of frequent natural disasters. Lu Bu, a researcher from the Institute of Agriculture Resources and Regional Planning at the Chinese Academy of Agricultural Sciences, said 1% to 2% of grain loss is foreseeable, adding that fortunately, the decrease will be minimal compared with the total grain yield of the country.  The flood-plagued six provinces are not major grain producing regions, he added. By June 20, a total of 1.3 million hectares of crops had been damaged by heavy rains in five provinces, including Zhejiang, Fujian, Jiangxi, Hunan, Guangdong and Guangxi, according to the Ministry of Agriculture.

[mikey]

China buys nearly 1 million tonnes of US corn
[15 July 2010] As of July, China has purchased nearly 1 million tonnes of corn from the US since April, a record high for the same period since 1995. Liuhe Group, one of China’s largest feed producers has completed the customs procedures for some 115,000 tonnes of corn imported from the US, a source close to the deal told Asian Poultry Magazine. China has ample corn reserves after bumper harvests for several years running and is able to keep domestic corn prices under control, according to the Sate Administration of Grain. Chinese corn prices have reached new highs as a result of the severe drought in corn producing areas in China since 2009, said an industry analyst. Currently, the price of US No.2 yellow corn after tariff payment is around CNY 1,860 (USD274)per tonne, which is CNY 90-180/tonne lower than domestic ones.

[mikey]

US Feed Outlook - July 2010
US feed grain production in 2010 is expected to be down from last month reflecting lower planted acreage as forecast in the June 30 Acreage report, according to the USDA Economic Research Service.

 

Feed grain production is projected up from 2009 as planted and harvested area are up from last year for corn, more than offsetting year-to-year reductions for sorghum, barley and oats. Adjustments are made in 2009/10 use this month to reflect 1 June stocks. The resulting changes lower 2009/10 ending stocks and 2010/11 supplies. Forecast 2010/11 prices for all four feed grains are raised this month, as feed grain ending stocks are projected lower. US corn exports for 2010/11 are decreased based on stronger US prices. Foreign coarse grain ending stocks for 2010/11 are down slightly more than US stocks, mostly due to reduced barley production prospects. During 2010/11, world coarse grain stocks are projected to decline five per cent.

 
Feed Grain Production Prospects Lowered
US feed grain production in 2010/11 is projected at 350.6 million metric tons, down 3.5 million tons from a month ago and up 1.6 million from 2009. The 30 June Acreage report showed planted acres decreased from earlier intentions for all four feed grains. The first survey-based production forecast for barley is down eight million bushels from the previous projection, which was based on trend yields and intended plantings. The lower barley production forecast reflects lower planted and harvested area, which is partially offset by an above-trend yield forecast. The first survey-based oats production forecast is down two million bushels from the June projection, reflecting lower harvested area but yields are expected to be higher than trend. USDA will make its first survey-based forecasts for corn and sorghum in the 12 August Crop Production report.

Feed grain supply in 2010/11 is projected at 394.6 million metric tons, down 7.2 million from last month and down 3.7 million tons from 2009/10. Feed grain imports are decreased 300,000 tons from last month and are down 200,000 tons from 2009/10. Beginning stocks in 2010/11 were lowered 3.4 million tons this month to 41.9 million because of higher use in 2009/10.

Projected total use of feed grains in 2010/11 is decreased 1.4 million tons this month, reflecting lower feed and residual use and exports. Ending stocks for 2010/11 are projected at 38.5 million tons, down 5.8 million tons from last month and down 3.4 million tons from 2009/10.

Feed and residual use of all feed grains in 2010/11 is expected to total 141.6 million metric tons and account for 39.8 per cent of total use. When converted to a September-August marketing year, feed and residual use for the four feed grains plus wheat is projected to total 147.57 million tons, down from the 2009/10 forecast of 150.28 million. Corn is projected to account for 92 per cent of total grain feed and residual use, down from a forecast 93 per cent in 2009/10.

The index of grain-consuming animal units (GCAUs) for 2010/11 is expected to be down slightly from the 2009/10 forecast of 91.5 million units. The grain used per GCAU would be 1.61 tons, down from 1.64 tons in 2009/10. In the index components, GCAUs for all types of poultry and hogs are up, while those for the other categories are down slightly, with cattle on feed being down the most. Cattle on feed in feedlots with capacity of 1,000 or more head totaled 10.5 million head on 1 June 2010. The inventory was one per cent above 1 June 2009. But, current feed use by cattle in feedlots is expected to decline in 2011. Beef production in 2011 is forecast at 25.2 billion pounds, down from 25.8 billion in 2010. In addition, some of the feed needs may be satisfied by increased use of distiller’s spent grains produced by the expanding ethanol industry.

Pork production in 2011 is expected to increase two per cent from the 22.3 billion pounds expected in 2010. Hog farmers responding to the June 2010 survey intend to have 2.89 million sows farrow during the June-August 2010 quarter, down two per cent from the actual farrowings during the same period in 2009 and down six per cent from 2008. Intended farrowings for September-November 2010, at 2.90 million sows, are down one per cent from 2009 and down four per cent from 2008. However, continued gains in pigs per litter result in larger supplies of slaughter hogs in 2011.

The broiler production forecast for 2011 is also raised as hatchery data indicate continued growth in bird numbers and increasing weights. Broiler production in 2011 is expected to increase three per cent from the projected 2010 production. Forecast turkey production in 2011 is up 1.9 per cent from 2010. Egg producers are expected to produce 7.62 billion dozen eggs in 2010, up 0.5 per cent from the projected 2010 output. Milk production in 2011 is forecast at 193.5 billion pounds, up from 191.2 billion pounds expected in 2010. These forecast increases in 2011 production will likely increase feed use.

Corn Production Decreases From Last Month in 2010/11
The projection for 2010/11 corn production was decreased one per cent from last month as a result of decreased plantings. Producers decreased plantings 926,000 acres from their March intentions to 87.9 million acres. Plantings are up from 86.5 million in 2009. Forecast harvested area is decreased 754,000 acres month to 81.0 million acres. The largest year-to-year increases in planted area were recorded in Illinois and Kansas, both up 600,000 acres from last year. Other notable increases were shown in Indiana, up 400,000 acres; Missouri, up 300,000 acres; and Ohio, up 250,000 acres. The largest declines occurred in Iowa, down 400,000, and Nebraska and South Dakota, both down 350,000 acres from last year. The national average yield projection remains unchanged from last month at 163.5 bushels per acre, down from 164.7 bushels per acre in 2009/10. As of 4 July, 71 per cent of the corn crop was rated in good to excellent condition, the same as this time last year.

 


 
Projected corn use for 2010/11 is down 50 million bushels this month to 13.36 billion. Feed and residual use and food, seed, and industrial (FSI) use remain unchanged at 5.35 billion and 6.06 billion bushels, respectively. Expected corn use for ethanol also remains unchanged this month at 4.7 billion bushels. Exports for 2010/11 were decreased by 50 million bushels to 1.95 billion bushels, as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of US corn. As a result, 2010/11 ending stocks were projected 200 million bushels lower at 1.373 billion.

For 2009/10, projected corn use is up 125 million bushels from last month to 13.315 billion bushels. Feed and residual is raised 175 million bushels from last month to reflect higher-than-expected third-quarter (March-May) disappearance as indicated in the 30 June Grain Stocks report. FSI use is lowered 50 million bushels this month, as corn used for ethanol is lowered 50 million bushels, reflecting the latest ethanol production data from the Energy Information Administration (EIA). Although daily ethanol disappearance set another record in April, daily production slipped below March’s record pace. EIA’s new weekly ethanol production data series (first reported for the week ending June 4) suggests June production, while up from April, will not reach the pace seen in March. Corn exports for 2009/10 remain unchanged this month at 1.95 billion bushels.

With 2010/11 ending stocks projected lower this month, prices are projected higher. The marketing-year average farm price for 2010/11 is projected at $3.45 to $4.05 per bushel, up 15 cents on both ends of the range. The 2009/10 marketing-year average price is expected to be $3.50 to $3.60 per bushel.

Sorghum Production Prospects Trimmed in 2010/11
Sorghum production in 2010 is projected at 350 million bushels, down five million from last month and down 33 million bushels from last year, as producers in Texas and Kansas decreased their planted area by 11 per cent in both states. Sorghum planted and harvested acreage is forecast at 6.0 million and 5.2 million acres, respectively. Planted area is down 360,000 acres from March intentions. The projected yield is increased from last month to 67.6 bushels per acre, reflecting adequate to abundant soil moisture in the Southern and Central Plains. As of 4 July, 71 per cent of the sorghum crop was rated in good to excellent condition, compared with 51 per cent last year at this time.

Sorghum supplies in 2010/11 are expected to decrease from last month because of decreased production and lower carry-in. For 2010/11, total use is lowered five million bushels because of smaller expected supplies. The decrease was reflected in feed and residual use, which was lowered five million bushels to 105 million.

For 2009/10, feed and residual was raised five million bushels because of increased use indicated by the 1 June stocks. Exports remain unchanged at 170 million bushels. As a result, ending stocks for 2009/10 are lowered five million bushels this month to 28 million.


 
The forecast farm price for sorghum in 2010/11 is $3.15 to $3.75, which is 91 to 93 per cent of the corn price. The projected price for 2009/10 is $3.10 to $3.20 per bushel.

Barley Production Down in 2010/11
The first survey-based forecast of 2010 barley production is 182 million bushels, down eight million from the previous projection and down 45 million from the 2009 crop. Planted area was down 301,000 acres from earlier intentions and down 595,000 acres from 2009. Harvested acreage is estimated at 2.5 million acres and is down 567,000 acres from 2009. The expected decline in production is a result of the lowest planted acreage on record and the lowest expected harvested acreage since 1883. The average barley yield is forecast at 71.6 bushels per acre, up from last month's trend-based projection of 66.9 bushels. If realised, the 2010 yield would be second only to last year’s record of 73.0 bushels per acre. As of 4 July, 85 per cent of the crop was rated in good to excellent condition, compared with 77 per cent last year at the same time.

Total barley use in 2010/11 is unchanged from last month and up seven million bushels from 2009/10. Imports in 2010/11 are lowered five million bushels this month as a result of low planted area in Canada. This is down two million bushels from the prior marketing year. Small changes were made in 2009/10, reflecting the 1 June Grain Stocks, which finished the marketing year for barley. Imports were unchanged at 17 million bushels. Feed and residual use was lowered one million bushels, and food, seed, and industrial use was lowered one million bushels. Ending stocks were reported at 115 million bushels, up from the earlier estimate of 113 million for 2009/10.

Prices received by farmers for barley in 2010/11 are expected to average $3.50 to $4.10 per bushel, up 15 cents on both ends of the range. The 2009/10 season average price for barley is raised one cent to $4.66 per bushel, due to historical revisions in monthly prices from USDA’s National Agricultural Statistics Service. The spread between malting barley and feed barley prices is projected to be down from last year, as contract prices for malting barley were not as high as seen last year. In 2009/10, the spread was $2.41 vs. $1.89 in 2008/09.

 

[mikey]

Oats Production at Record Lows
According to the first survey results, oats production is forecast at a record low of 88 million bushels for 2010, down two million bushels from last month’s projection and down five million from 2009. Planted acres are down 188,000 acres from the March intentions, and harvested acres are also down from last month’s projection. Yields are forecast at 66.7 bushels per acre, up 1.2 bushels from the trend yield used last month but down 0.8 bushels from 2009. At the forecast, yields for 2010 would be second only to last year’s record 67.5 bushels per acre. As of 4 July, 81 per cent of the crop was rated in good to excellent condition, compared with 59 per cent last year at the same time.

Beginning stocks for oats are estimated at 80 million bushels for 2010/11, down seven million bushels from last month based on 11 June stocks. Despite decreases in supply, total use in 2010/11 remains unchanged this month, resulting in a 19-million bushel decrease in ending stocks.

For 2009/10, feed and residual use was raised five million bushels to account for reported 1 June ending stocks. Imports were also lowered three million bushels to 95 million. Ending stocks are estimated at 80 million bushels for 2009/10. Oats farm prices are projected at $2.10 to $2.70 per bushel for 2010/11, which was raised 25 cents on both end of the range, as prices for all feed grains have increased with decreasing supplies. In 2009/10, the season-average farm price for oats is estimated at $2.02 per bushel.

 
Hay Acreage Down in 2010/11
Producers expect to harvest 59.7 million acres of all hay in 2010, down slightly from 2009. Expected harvested area of alfalfa and alfalfa mixtures, at 20.7 million acres, is down 495,000 acres from 2009. Expected area for harvest of all other types of hay totals 38.9 million acres, up 396,000 acres from 2009.

Harvested area for alfalfa and alfalfa mixtures is expected to decrease or remain unchanged from last year in all states except Arizona, Montana, New York, Oregon, Texas and Utah. While Montana acreage is expected to increase 100,000 acres, large decreases are expected in North Dakota and Minnesota, down 180,000 and 100,000 acres, respectively.

Compared with amounts last year, area harvested for all other types of hay is expected to increase by 100,000 acres or more in Missouri, Montana, Texas, Virginia, and Washington. Texas is expecting the largest increase in acreage as producers look to replenish hay supplies after last year’s severe drought. However, decreases of 100,000 acres or more are expected in Kansas, Kentucky, New York, Oklahoma and South Dakota.

World Coarse Grain Production Prospects Cut This Month
Global coarse grain production forecast for 2010/11 is reduced 10.8 million tons to 1,117.6 million, a cut of about one per cent this month. Much of the decline is in other countries, down 7.3 million tons to 766.8 million, and in barley, with foreign production prospects cut 6.7 million tons to 131.6 million. Foreign oats production is reduced 0.8 million tons, corn and rye are trimmed 0.2 million each, and sorghum is virtually unchanged, but mixed grain is increased 0.6 million due to improved prospects in Germany and Hungary.

Foreign corn production prospects are reduced slightly to 495.9 million tons this month. Russia’s projected production is reduced 0.5 million tons to 5.0 million as planting reports indicate that harvested area will not expand as much as previously forecast. In the EU, a 0.3-million-ton increase in corn production prospects is caused by small improvements in prospects for several countries, more than offsetting a decline in corn area for France.

Global barley production prospects for 2010/11 are cut five per cent this month to 135.5 million tons. The largest drop is for Russia, down 2.5 million tons to 13.0 million. Serious drought and severe high temperatures in the spring grains areas of the Volga region and the Urals, with dryness extending into parts of Siberia and the Central production region, are sharply curtailing spring barley production prospects. The same drought extends into Kazakhstan, where expected barley production is cut more than 30 per cent this month to 1.8 million tons.

 
Canada’s barley production prospects are cut 1.1 million tons this month to 8.4 million as excessive rains and below-normal temperatures during the second half of May and the first half of June in the Prairie Provinces (especially in parts of Saskatchewan) left many fields too wet for field work and planting. Canada’s barley area is cut 12 per cent due to the planting problems. The same wetness prevented oats planting, cutting Canada’s oats area 26 per cent and slashing production prospects 0.9 million tons to 2.8 million.

The EU has suffered from excessive rains in the east, disrupting barley harvests in the Balkans, but below normal precipitation in England, northern France, across the low countries, and into northern Germany. EU barley production is reduced 2.4 million tons this month to 56.4 million. The largest reductions are for France and Finland, with smaller declines for Germany, Spain, Hungary, Italy, the Czech Republic, Sweden, Austria and Portugal.

Forecast 2010/11 global beginning stocks of coarse grains are reduced 4.1 million tons this month, contributing to tighter supplies, but most of the reduction is for the United States. Foreign beginning stocks are down only 0.7 million tons to 146.8 million. EU coarse grain beginning stocks are reduced 0.5 million tons, mostly due to increased 2009/10 barley exports and a slight reduction in 2009/10 production. Brazil’s 2010/11 beginning stocks are reduced 0.5 million tons this month because of increased 2009/10 corn exports. Russia’s barley beginning stocks are trimmed 0.4 million tons due to increased 2009/10 exports. Partly offsetting the reductions are increased beginning stocks of corn, oats and barley for Canada, and barley for Saudi Arabia.

 
Coarse Grain Consumption Prospects, Ending Stocks Trimmed
Projected global 2010/11 coarse grain use is down 3.2 million tons this month to 1,126.2 million. Russia, with reduced production, is forecast down 2.5 million tons to 26.9 million. The largest cut in use is for barley, down 1.7 million tons, with corn reduced 0.5 million and rye 0.3 million. The reduction in feed and residual use of 2.0 million tons is offset by an increase in expected wheat feeding, as meat production prospects in Russia continue to be for strong growth. EU coarse grain use is forecast down 0.8 million tons, with feed use of corn and barley each reduced 0.5 million tons and a small reduction in oats, partly offset by increased feed use of mixed grain. Meat production prospects in the EU are stagnant for 2010/11. There is also a small reduction this month in forecast feed use in Kazakhstan, as well as small increases for Brazil, Turkey, and Serbia.

World coarse grain ending stocks forecast for 2010/11 are down 11.8 million tons this month to 180.2 million. More than half the decline is in foreign stocks, down 6.0 million tons to 141.6 million. The largest decline is for the EU, down 2.5 million tons to 16.7 million. EU barley stocks are reduced 3.9 million tons this month to 8.3 million. With intervention no longer available for barley, its price is expected to decline compared to that for other grains, encouraging use, but grains prices are expected to be high enough to facilitate some reduction in stock levels. EU corn, rye and mixed grain projected ending stocks are up this month, partly offsetting the barley reduction. Canada, with reduced production, has coarse grain ending stocks reduced 1.0 million tons this month to 4.0 million. Kazakhstan, with reduced barley production, has ending stocks cut 0.6 million tons. With higher corn price prospects, Mexico is not expected to import as much corn to build stocks, trimming corn stocks 0.6 million tons. Brazil, with strong 2009/10 corn exports trimming 2010/11 beginning stocks, is projected to have ending stocks of corn 0.5 million tons lower. Ukraine, with increased corn export prospects, has ending stocks reduced 0.5 million tons this month. Russia’s barley ending stocks are reduced 0.4 million tons this month. Australia’s barley stocks are reduced 0.3 million tons as export prospects improve with reduced competition. Barley stocks are increased 0.3 million tons this month for Saudi Arabia due to increased 2009/10 imports.

US Corn Export Prospects for 2010/11 Reduced This Month
US corn exports for October-September 2010/11 are reduced 1.5 million tons to 49.5 million (down 50 million bushels to 1.95 billion for the September-August local marketing year). Tighter supplies and strong domestic demand are expected to increase corn prices, limiting the competitiveness of US corn exports. World corn trade for 2010/11 is projected down 0.5 million tons to 89.7 million, as increased corn prices trim Mexico’s imports 0.5 million tons to 9.1 million. Ukraine and Brazil are expected to benefit from reduced US competition, and corn exports are raised 0.5 million tons each.

Barley world trade projected for 2010/11 is increased 0.4 million tons to 16.5 million. China’s imports are up 0.4 million based on strong demand for malting barley to meet beer demand. Reduced production prospects slash Russia’s exports 0.8 million tons to 1.0 million and cut Canada’s exports 0.4 million tons to 1.0 million. There is also a small reduction in Kazakhstan’s exports. With large stocks, EU barley exports are increased 1.4 million tons despite reduced production. Reduced competition is also boosting export prospects for Australia.

US corn exports for 2009/10 are unchanged this month at 49.0 million tons. Census exports for October 2009 to May 2010 reached 31.5 million tons, and June grain export inspections of corn reached 4.1 million tons. As of 1 July 2010, outstanding export sales for shipments in 2009/10 reached 9.9 million tons. However, the pace of recent shipments indicates that a larger-than-usual share of the 1 July outstanding sales are likely to get carried into the next marketing year. World corn trade in 2009/10 is increased slightly this month to 85.9 million tons mostly due to a small increase in corn exports for Ukraine. Corn imports for South Korea are increased 0.4 million tons to 8.2 million. 

July 2010