USDA's World Agricultural Outlook Board reduced projected ending stocks for U.S. corn to just under 1 billion bushels and lowered its expectation for U.S. cotton exports and consumption in its Oct. 12 estimate of supply and demand.

USDA projected cotton domestic mill use 200,000 bales lower based on declining use rates in recent months. Projected exports were also reduced 200,000 bales due to lower world import demand. Ending stocks for 2006-07 are 17 percent higher this month but are 11 percent below 2005-06.

Larger supplies and lower consumption are boosting projected 2006-07 world cotton stocks by 12 percent compared with last month. Beginning stocks were raised 5 percent based on a reassessment of 2005-06 ending stocks in China.

World production for 2006-07 is 1 percent higher as increases for China, Uzbekistan and the United States are partially offset by reductions for Australia and Iran. World consumption was reduced 1 percent from last month due to decreases for China and the United States.

U.S. corn ending stocks were reduced 225 million bushels to just below 1 billion bushels. The 2006-07 marketing-year average price was raised 25 cents on both ends of the range to $2.40 to $2.80 per bushel, reflecting the tighter balance sheet, higher-than-expected cash prices in recent weeks and strong futures prices.

China corn production was raised 3 million tons to a record 141 million tons on record area and a projected yield just below last year's record, while Mexican corn production was raised 700,000 tons reflecting favorable crop weather this summer.

Domestic and residual use for rice was forecast at 122.8 million hundredweight, down 2.1 million hundredweight from last month, but up 3.6 million hundredweight from 2005-06. Total projected exports were unchanged at 97 million hundredweight, however, rough rice exports were lowered 2 million hundredweight to 35 million hundredweight and combined exports of milled and brown rice were raised 2 million hundredweight to 62 million hundredweight (rough-equivalent basis).

Long- grain exports were lowered 1 million hundredweight to 75 million hundredweight, while combined medium- and short-grain exports were raised 1 million hundredweight to 22 million hundredweight. Ending stocks of all rice are now projected at 33.4 million hundredweight, 1.6 million hundredweight above last month. The season-average farm price is projected at $9 to $9.50 per hundredweight, up 25 cents per hundredweight on each end of the range compared to last month.

World rice production was lowered slightly primarily because of a decline in Australia, nearly offset by an increase for Pakistan. World ending stocks were lowered 600,000 tons from last month to 78.8 million tons due mainly to reductions for China, EU-25 and Egypt.

U.S. soybean exports and crush were raised 20 million and 10 million bushels, respectively, due to increased supplies. U.S. soybean ending stocks are projected at 555 million bushels, up 25 million from last month.

U.S. season-average soybean prices for 2006-07 are projected at $4.90 to $5.90, unchanged from last month.

Projected U.S. 2006-07 wheat ending stocks were lowered 11 million bushels from last month despite higher production and carryin. Exports were increased 25 million bushels this month reflecting tighter world supplies. The projected price range was raised 15 cents on both ends of the range to $4.10 to $4.60 per bushel, reflecting higher domestic and world prices resulting from reduced global production and supplies.

Projected global wheat production for 2006-07 was lowered 11 million tons this month to 585.1 million tons, while global ending stocks declined 7.1 million tons to 119.3 million tons, which would be the lowest stocks in 25 years.

Wheat production in Australia was lowered to 11 million tons, down 8.5 million tons from last month, due to persistent drought and September heat. At this level, Australia's wheat production would be only 900,000 tons higher than in 2002-03 when record drought and heat devastated the crop. Exports for Australia were lowered 5 million tons from last month.

Wheat production was also lowered in China, EU-25 and Brazil, and far outweighed a 400,000-ton increase in Canada. USDA increased exports for Canada, EU-25, Kazakhstan and the United States. With tighter supplies, world consumption was lowered 2.7 million tons and world exports reduced 1.7 million tons.