The eyes of the commodity markets are on drought-plagued South American corn and soy in advance of the monthly Supply-Demand report from the USDA.
“A closely watched piece of information for each crop is ending stocks,” Scott Stiles, Extension economist for the University of Arkansas Division of Agriculture. The ending stocks are the amount of inventory left over at the end of each crop’s marketing year.
The marketing year for wheat ends May 31, cotton and rice on July 31, and corn and soybeans Aug. 31. Small changes are expected in the U.S. crop balance sheets.
“Excessive heat and drought across southern Brazil and Argentina over the past few months has impacted both corn and soybean production. This has in turn shifted more export demand to the U.S. for both of those crops.
“Last month USDA pegged Brazil’s soybean production at 72 million metric tons,” Stiles said. “Estimates out of Brazil from its agriculture ministry currently see production at 68.75 million metric tons.”
Based on news agency polls of private analysts, the average pre-report guess for corn ending stocks is 776 million bushels, versus 801 in February and 1.128 billion bushels in 2011.
Soybeans came in at 253 million bushels, compared to 275 last month. The average guess for wheat was 837 million bushels, versus 845 in February. No pre-report estimates were released for cotton and rice.
“Demand remains a problem for U.S. rice, with export sales only showing a moderate pace, and domestic demand is said to be very slow,” Stiles said.
In cotton, India has banned exports until further notice.
“India is the second largest exporter of cotton in the world, so lost availability there could create new demand for U.S. cotton. However, there are questions about the continued strength of Chinese demand and world demand in general. World inventories of cotton have rebuilt significantly following last year’s record production.”
For more information about agricultural economics, visit www.uaex.edu, or contact your county Extension office.