According to Friday’s monthly" World Agricultural Demand Estimates" (WASDE), ending corn stocks are expected to decline 1.1 billion bu. (196 million bu. lower than last month’s forecast), which would be the lowest carryout in eight years. That moves the expected price of corn 50¢ higher on the low end of the range ($4.00) and 70¢ higher on the top end ($4.80), compared to the previous month’s projection.
John Anderson, American Farm Bureau Federation economist, says, “A 2.5-bu. yield reduction is quite substantial because the stocks-to-use ratio for corn is very low, but USDA is still forecasting a record crop of 13.2 billion bu. Demand is strong, which is helping create a bullish situation for corn.”
Anderson explains a major factor the market is looking at is USDA’s projection of 1.1 billion bu. in U.S. corn stocks.
“This would represent a little more than 8% of usage, which would put us at the lowest stocks-to-use ratio since 1995 when the stocks-to-use ratio was 5%. This puts us in a very tight supply situation,” Anderson says.
Because of the tight supply situation and forecasts for a record crop, Anderson expects to see a fairly high average corn price for this marketing year.
“The corn price on average is well supported by this,” he says. “However, I still don’t expect to see the kind of price swings like we saw in 2007-2008.”
In other crop news, though WASDE projects ending wheat stocks at the highest level in more than a decade (projected season average price for 2010-11 of $4.95-$5.65), Chris Hurt, Purdue University ag economist, says Russia's ban of wheat exports is giving U.S. farmers the opportunity to produce more of the crop to meet demands around the world. He predicts a 50% to 75% increase in the amount of wheat planted in the Eastern Corn Belt this fall over 2009, a record-low year.
“The problems in Russia, Canada and other countries around the Black Sea really have elevated wheat prices this year,” Hurt says.
“We're seeing prices about $2 higher per bushel than what we anticipated earlier this year.” See the full reports at: http://usda.mannlib.cornell.edu/usda/current/CropProd/CropProd-09-10-2010.pdf
For the week ending Sept. 5, according to the National Agricultural Statistics Service:
Corn – 98% is at or beyond the dough stage, 13% ahead of last year and 3% ahead of the average pace. Progress was complete or nearly complete in all estimating states except Pennsylvania. Near-normal temps throughout much of the major corn-producing areas provided excellent conditions for continued rapid phenological development. 86% is at or beyond the denting stage, 38% ahead of last year and 15% ahead of average. 33% is at or beyond the mature stage, 25% ahead of last year and 14% ahead of average. The most rapid progress was evident in Illinois, Indiana and Iowa, where 23% or more of the crop matured during the week. 6% of the crop is in the bin, 4% ahead of last year and 2% ahead of average. Harvest was most advanced in Tennessee, where progress was 50% ahead of last year and 32% ahead of normal 69% is in Good to Excellent condition, the same as a year ago.
Soybeans – Leaves were dropping on 19% of the crop, 12% ahead of last year and 4% more than the five-year average. In Indiana, leaf drop was 34%, over two weeks ahead of last year’s pace, with 2% of the crop harvested. 64% is rated in Good or Excellent condition, 4% less than last year.
Spring wheat – 76% is harvested, 20% ahead of last year but 9% behind the five-year average. In Montana, producers harvested just 7% of their crop during the week, as increased rainfall limited fieldwork throughout much of the state.
Sorghum – Coloring advanced to 74% complete, 17% ahead of last year and 10% ahead of the five-year average. As warmer daytime temps prevailed in Kansas, the largest sorghum-producing state, one-quarter of the crop began coloring during the week. 30% of the sorghum crop reached maturity, on par with last year but 3% behind the five-year average. Harvest began in Kansas during the week, ahead of both last year and the average. 19% has been harvested, 6% behind last year and the five-year average. 62% is in Good to Excellent condition, 13% more than the same time last year.
Barley – 78% is harvested, which is 12% ahead of last year but 8% behind the five-year average. Double-digit delays remained evident in Idaho and Montana, two of the three-largest barley-producing states.
Pasture – 45% of the nation’s pasture and range is rated as Good or Excellent, 4% less than last year. 23% is rated Poor or Very Poor, the same as a year ago. States reporting 40% or more of pasture as Poor or Very Poor were: Arkansas (67%); Indiana (46%); Kentucky (42%); Maine (46%); Maryland (42%); Virginia (56%); and West Virginia (55%).