- No big surprises in February USDA supply/demand.
- Corn remains strong; cotton, rice outlook gloomier.
Corn, rice and cotton were all trading lower by lunch on Feb. 9 hard on the heels of the morning’s World Agricultural Supply and Demand Estimates from the USDA.
“Although corn ending stocks were not reduced as much as some analysts anticipated, the current levels are still historically tight and will offer price support through planting,” said Scott Stiles, Extension economist with the University of Arkansas System Division of Agriculture. “Soybean prices should remain near current levels to avoid losing too many acres to corn this year.”
However, the outlook was not so upbeat for cotton and rice.
“Price-wise, the upside in cotton and rice is limited, considering world supplies of cotton and rice have rebuilt to comfortable levels. Both of these commodities are struggling to compete in the export market on the heels of record world production in 2011.”
- Corn: U.S. corn 2011-12 ending stocks were reduced to 801 million bushels.
Exports were increased by 50 million, while imports were increased by 5 million bushels. The average pre-report trade estimate was 791 million bushels.
Argentine corn production was reduced 4 million metric tons from 26 to 22. Brazilian corn production was unchanged. World 2011-12 projected corn ending stocks were reduced from last month’s 128.14 million metric tons to 125.35 million metric tons.
- Soybeans: There were no changes to the U.S. soybean balance sheet.
Ending stocks for the 2011 marketing year are currently projected at 275 million bushels; up from 215 million last year. The average trade pre-report estimate was 273 million bushels.
Soybean production in Brazil and Argentina was reduced, contributing to a cut in expected world soybean ending stocks from 63.43 million metric tons in January to 60.28 million metric tons. Chinese imports were lowered by 1 million metric tons to 55.5 million metric tons.
- Cotton:U.S. cotton mill use was trimmed 100,000 bales to 3.5 million.
There were no changes to exports. Ending stocks are now forecast at 3.8 million bales; up from 2.6 million last year.
World cotton ending stocks were increased 2.4 million bales, due largely to USDA’s adjustments to India’s production going back to 2009-2010. Chinese imports were increased by 1 million bales to 17 million.
- Rice:The only adjustment to the U.S. rice balance sheet was on the long-grain side.
Exports were cut 1 million hundredweight from last month’s estimate. Total long-grain exports are now projected at 58 million hundredweight, compared with 78 million hundredweight last year.
“This sharp reduction in exports is partly attributed to more competition from Brazil in key Central American markets,” Stiles said.
U.S. long-grain ending stocks are down considerably – 39 percent – from last year, falling to 21.6 million hundredweight. U.S. long-grain harvested acreage also fell 39 percent from 2010 to 2011.
World rice ending stocks were essentially unchanged from last month.
“2012 will continue to offer the price and market volatility we’ve come to expect. U.S. corn, cotton, long-grain rice and soybean carryovers are low and new crop production will be important, especially in the event of production shortfalls elsewhere in the world,” Stiles said. “Ongoing drought conditions here in the U.S. are already making the news and will continue to influence the markets in the months ahead.”