Grain Marketing Highlights – September 14, 2012

Carl German, Extension Crops Marketing Specialist; clgerman@udel.edu

USDA’s September 12 U.S. and World Supply and Demand Highlights
Trader reaction to the September report was apparently negative for the corn and soybean  markets with corn and wheat futures trading lower as of 1 p.m., Wednesday, September 12. Soybean futures were surging higher. Trader attention in the ensuing weeks will turn to the status of the 2012 crop harvest with both the U.S. corn and soybean 2012 average yield estimates being revised downward (.6 and .8 bushels per acre). There were no changes made in planted or harvested acreage estimates across the board.

Brazilian and Argentine corn production estimates for the ‘12/‘13 marketing year were unchanged from last month for a combined total of 98 MMT (million metric tons). Argentine corn production for the ‘11/‘12 marketing year was unchanged at 21 MMT. The estimate for Brazilian ‘11/‘12 marketing year corn was reduced slightly from 72.8 to 72.7 MMT.

Projected Brazilian and Argentine soybean production was unchanged from last month for the ‘12/‘13 marketing year for a combined total of 136 MMT, a projected increase of 28.5 MMT from the drought stressed ‘11/‘12 Southern Hemisphere crop. Argentine soybean production for the ‘11/‘12 marketing year was left unchanged at 41 MMT while Brazilian production was revised upward from 65.6 to 66.5 MMT, for a combined total of 107.5 MMT.

U.S. S&D Summary, 9/12/12, Million Bushels

 

Corn

Soybeans

Wheat

Crop Year

11-12

12-13

12-13

11-12

12-13

12-13

11-12

12-13

12-13

Report Date

09/12

08/10

09/12

09/12

08/10

09/12

09/12

08/10

09/12

Carryin

1,128

1,021

1,181

215

145

130

862

743

743

Production

12,358

10,779

10,727

3,056

2,692

2,634

1,999

2,268

2,268

Imports

25

75

75

16

20

20

112

130

130

Tot Supply

13,511

11,875

11,983

3,287

2,857

2,785

2,974

3,141

3,141

 

Feed

4,400

4,075

4,150

163

220

220

Crush/Mill*

1,360

1,320

1,320

1,705

1,515

1,500

941

950

950

Ethanol Prod

5,000

4,500

4,500

Seed/Other

30

30

30

101

116

114

77

73

73

Exports

1,540

1,300

1,250

1,360

1,110

1,055

1,050

1,200

1,200

Total Use

12,330

11,225

11,250

3,157

2,742

2,670

2,231

2,443

2,443

Carryout

1,181

650

733

130

115

115

743

698

698

Stocks/Use Rate

9.6%

5.8%

6.5%

4.1%

4.2%

4.3%

33.3%

28.6%

28.6%

Avg Price

$6.25

$8.20

$7.90

$12.45

$16.00

$16.00

$7.24

$8.30

$8.10

*Excludes corn for ethanol

● Projected corn ending stocks for the ‘12/‘13 marketing year were increased by 83 million bushels from last month (650 to 733 million bushels), largely attributed to reductions in demand/use categories for the ‘11/‘12 and ‘12/‘13 marketing years.

● Ending stocks-to-use estimates for ‘12/‘13 marketing year corn increased from 5.8% last month to 6.5% in the September report.

● Ending stocks for U.S. soybeans were essentially unchanged from last month at 4.3%.

● Ending stocks for all U.S. wheat and stocks-to-use were left unchanged at 698 million bushels and 28.6%, respectively.

● USDA’s projection for the season average price for U.S. corn was reduced from $8.20 to $7.90 per bushel (ranging from a low of $7.20 to a high of $8.60 per bushel).

● The season average price for U.S. soybeans was unchanged from last month at $16.00 per bushel (ranging from $15.00 to $17.00 per bushel).

● The season average price for all U.S. wheat was lowered 20 cents to $8.10 per bushel (ranging from $7.50 to $8.70 per bushel).

World S& D Summary, 8/10/12, Million Metric Tons

 

Corn

Soybeans

Wheat

Crop Year

11-12

12-13

12-13

11-12

12-13

12-13

11-12

12-13

12-13

Report Date

09/12

08/10

09/12

09/12

08/10

09/12

09/12

08/10

09/12

Carryin

876.68

849.01

841.06

237.09

260.46

258.13

695.04

662.83

658.73

Production

1004.20

984.98

980.66

307.35

312.40

311.78

892.99

860.42

857.37

Total Supply

 

504.47

508.74

508.84

144.80

134.09

132.09

Feed

225.43

227.03

226.91

Crush

360.19

352.90

347.86

29.03

29.89

29.82

549.55

549.16

548.57

Other

864.66

861.64

856.70

254.46

256.92

256.73

694.35

683.25

680.66

Total Use

 

139.60

123.33

123.95

53.65

53.38

53.10

198.64

177.17

176.71

End Carryout

16.1%

14.3%

14.5%

21.1%

20.8%

20.7%

28.6%

25.9%

26.0%

Stocks/Use Rat

876.68

849.01

841.06

237.09

260.46

258.13

695.04

662.83

658.73

● Projected world ending stock estimates for corn were increased from 123.33 last month to 123.95 (+.62) MMT in the September report for the ‘11/‘12 marketing year.

● World ending stock estimates were also increased by 3.63 MMT for the ‘11/‘12 marketing year corn.

● World ending stocks for ‘12/‘13 marketing year soybeans were reduced slightly from last month.

● World ending stocks for ‘11/‘12 marketing year soybeans were increased from last month’s estimates by 1.71 MMT.

● World ending stock projections for all wheat for the ‘12/‘13 marketing year were reduced .46 MMT.

● World ending stock estimates for all wheat for the ‘11/‘12 marketing year were increased by 1.05 MMT.

● World stocks-to-use projections for the ‘12/‘13 marketing year were increased slightly for corn, reduced slightly for soybeans, and increased slightly for wheat.

Market Strategy
Advancing new crop harvest sales for 2012 corn and soybeans continues to make sense considering price level and the lack of carry being reflected in these markets. The July ‘13 SRW wheat futures contract is currently bidding within 11 cents per bushel of the life-of-contract high. Currently, in e-trade Dec ‘12 corn futures are $7.71; Nov ‘12 soybeans are $17.48; and July ‘13 SRW wheat futures are bidding at $8.64 per bushel.

For technical assistance on making grain marketing decisions contact Carl L. German, Extension Crops Marketing Specialist.

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