WASDE: Wheat feeding, early corn expected to extend supplies

By Susanne Retka Schill | April 10, 2012

USDA left the feed grain balance sheets for the current marketing year unchanged in its monthly World Agriculture Supply and Demand Estimates report. After a couple of reports without a mention of ethanol, the April report simply noted that nothing changed. “Corn used to produce ethanol in 2011-’12 is projected at 5.0 billion bushels, unchanged again this month. The latest monthly data from the Energy Information Administration (EIA) indicates that average daily ethanol disappearance fell to a 23-month low in January pushing ethanol stocks to a new record high. Weekly EIA ethanol production data suggest average daily ethanol production during February and March has continued to fall hitting its lowest level since early last fall.”

In the April 10 WASDE report, the projected range for the season-average corn farm price is narrowed 10 cents on each end to $6 to $6.40 per bushel. Prospects for increased wheat feeding and an early corn crop, plus more intended corn acres in the South, are expected to impact feed and residual disappearance for the remainder of the marketing year. Prospects remain favorable for a large year-to-year increase in winter wheat production with planted area up 1.1 million acres and crop condition ratings substantially improved from last spring at this time, particularly in the Hard Red Winter wheat states. Larger expected supplies and competitive prices for wheat relative to corn suggest an increase in summer wheat feeding compared with last year. USDA left the projected 2011-’12 corn feed and residual use unchanged at 4.6 billion bushels. March 1 stocks indicate a September-February feed and residual disappearance 238 million bushels lower than during the first six months of the 2010-’11 marketing year.

Global coarse grain supplies for 2011-’12 are projected 4.3 million tons lower mostly on a 4.0-million-ton reduction in corn beginning stocks in China with higher 2010-’11 corn feed and residual use. Global barley supplies for 2011-’12 are also lowered 0.6 million tons mostly on lower 2010-’11and 2011-’12 production for Iran.

Global 2011-’12 corn production is nearly unchanged with a number of notable, but offsetting changes made, many of which reflect the latest available updates to officially reported statistics. Corn production is raised 1.7 million tons for Egypt, 0.6 million tons for Indonesia, 0.4 million tons for Cambodia, and 0.2 million tons each for Colombia and Thailand. Production for Mexico is lowered 1.5 million tons based on lower harvested area as government harvest reports suggest last summer’s crop suffered greater losses than previously thought from late planting, sporadic dryness, and an early frost in eastern areas of the south-central Corn Belt. Production for Argentina is reduced 0.5 million tons with lower yields reported for the early planted crop. South Africa production is lowered 0.5 million tons as dryness and late-season heat that persisted through mid-March reduced yield prospects in western areas of the Corn Belt. The resumption in rainfall in late March came too late for much of the crop. Venezuela production is lowered 0.4 million tons with lower reported area and yields and Laos production is lowered 0.3 million tons on lower reported area.

Global coarse grain imports and exports for 2011-’12 are raised slightly with several countries adjusted based largely on the pace of trade to date. A 0.5-million-ton increase for Brazil corn exports is partly offset by a 0.1-million-ton decrease in corn exports for Mexico. Corn imports are lowered for Egypt, Thailand, and Colombia, but raised for Mexico, Indonesia, and Venezuela.

Wheat feeding will likely impact global coarse grain consumption. USDA lowered its 2011-’12 projection 3.4 million tons, mostly on a 3.0-million-ton reduction in corn feed and residual use in China. An increase in China wheat feeding is mostly offsetting. Mexico corn feeding is reduced 0.4 million tons, also with higher expected wheat feeding. Corn feeding is raised 0.5 million tons for Indonesia and 0.4 million tons for Egypt. A 0.5-million-ton reduction in Brazil corn feeding is offset by the same size increase in food, seed, and industrial use for the country.