Blogging by the Bushel
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The April WASDE forecasted an unchanged balance sheet for U.S. corn. This coms as a surprise as most analysts expected U.S. corn ending stocks to significantly decrease after last month’s Quarterly Stocks Report indicated an 8% drop in corn held in all positions. As predicted, soybean production and stocks decreased worldwide.

Corn

U.S. ending stocks remained at 801 million bushels due to a decrease in expected ethanol use and an increase in expected wheat consumption compared to corn. Corn usage for ethanol production remained unchanged from last month at 5.0 billion bushels. The Energy Information Administration’s latest report indicated average daily ethanol disappearance was at a 23-month low in January, increasing ethanol stocks to a record high. Larger than expected wheat supplies and competitive pricing compared to corn imply wheat could be the choice of feed this year. The projected range for season-average corn prices was narrowed on both ends of the range by 10 cents to $6.00 to $6.40.

2011/12 global coarse grain supplies were decreased by 4.3 million tons reflecting a 4.0 million ton decrease of Chinese corn beginning stocks due to increased 2010/11 corn feed and residual use. We will continue to watch the amount of U.S. corn acres planted as the U.S. is poised to plant the largest amount of corn acres since before World War II.

Soybeans

2011/12 U.S. soybean exports were increased this month by 15 million bushels due to soybean crush experiencing higher than expected meal disappearance resulting in exports increasing by 15 million bushels. The U.S. season-average price range for 2011/12 was projected at $12.00 to $12.50 per bushel. Global oilseed production for 2011/12 was projected 5.2 million tons lower to 440.6 million tons. Weaker foreign production accounts for the decrease. Soybean production in Brazil was lowered 2.5 million tons from last month as warm temperatures and insufficient amounts of rainfall continued to decrease yields. Argentina and Paraguay soybean production was also lowered.

Wheat

U.S. wheat ending stocks for 2011/12 were projected 32 million bushels lower in April as feed and residual usage was increased. The season-average price was narrowed by 5 cents on both ends to $7.20 to $7.40 per bushel. Global wheat supplies for 2011/12 were lowered 0.5 million tons due to decreases in beginning stocks worldwide. Global wheat consumption was also increased due to an expected rise in feed and residual use as wheat appears to be a cheaper feed alternative to corn.
Outlook

The grain markets will continue to watch South American production of corn and soybeans as weather has had an adverse affect on yields.  Tomorrow officially marks the beginning of the U.S. corn planting season in many regions of the Corn Belt and we are excited to get this year’s crop in the ground.

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