USDA lowers corn ending stocks estimates once again

By Susanne Retka Schill | February 09, 2012

In an unsettled market, traders were looking for the February USDA World Agriculture Supply and Demand Estimates report released Feb. 9. The report lowered estimates for the 2011-’12 marketing year ending stocks on expected higher exports, leaving estimates for corn use for ethanol production unchanged from the previous month at 5 billion bushels. That compares to 5.021 billion bushels used in 2010-’11 and 4.591 billion in the previous year.

U.S. corn exports are projected 50 million bushels higher with reduced supplies in Argentina and recent increases in both sales and shipments. Corn ending stocks are projected 45 million bushels lower at 801 million. The projected range for the average farm corn price is narrowed 10 cents on both ends of the range to $5.80 to $6.60 per bushel.

Global coarse grain supplies for 2011-’12 are projected 3.1 million tons lower mostly reflecting reduced corn production prospects in Argentina and, to a lesser extent, Paraguay. Argentina corn production is lowered 4 million tons to 22 million. In spite of recent rains, the USDA says, “field reports confirm that high temperatures and extensive dryness during pollination in late December and early January resulted in irreversible damage to early corn in the central growing region. Late planted corn, which has been on the increase in recent years, will help offset some of the earlier losses, but additional rainfall is needed to stabilize production prospects.” USDA also lowered Paraguay’s corn production by 0.4 million tons due to hot, dry weather reducing both planted area and yields. Partly offsetting are small corn production increases for EU-27 and the Philippines.

Global coarse grain trade for 2011-’12 is raised with higher corn imports for EU-27 and higher barley imports for Saudi Arabia, EU-27, and Jordan. Partly offsetting is a reduction in corn imports for Canada. Higher corn exports for a number of countries offset a 4.5-million-ton reduction for Argentina. Along with the projected increase for the United States, corn exports are raised 2.0 million tons for Ukraine, 0.5 million tons each for Brazil and EU-27, and 0.2 million tons for Russia.

Global coarse grain consumption for 2011-’12 is raised slightly with higher barley feeding in Ukraine and Jordan and higher corn feeding in Argentina and Ukraine. Corn feeding, however, is lowered for Canada and barley feeding is lowered for Kazakhstan and Saudi Arabia. Global coarse grain ending stocks for 2011-’12 are lowered, with a 2.8-million-ton reduction in corn stocks and a 0.6-million-ton reduction in barley stocks.

At the projected 125.4 million tons, global corn ending stocks would be the lowest since 2006-’07.