USDA released it’s monthly projections for U.S. and global agricultural supply and use this morning. According to the market reaction the report was most shocking for soybeans. Both crushings and export use are forecast at 1.625 and 1.3 billion bushels (bbu), respectively, collectively 35 million bushels (mbu) lower then last month’s estimate for the 2011/12 marketing year. Marginal changes from last month’s projections were made for corn, cotton and wheat and no changes were made for rice. Lower corn sugar use brought corn demand down by 5 million bushels putting demand for all food, seed and industrial use at 6.405 bbu. Cotton projections were altered for both supply and demand. Total U.S. yield was lowered to 771 lbs/acre from 794 last month which brought the production estimate down 0.47 million bales to 15.83. Somewhat offsetting the lower supply was lower projected domestic milling, which is currently estimated at 3.6 million bales. Wheat exports were projected lower, from 975 to 925 mbu, due to increased competition from other countries.
Globally, corn ending stocks were bumped a little more than 5 million metric tons as production in China and – to a lesser degree – other countries are projected higher. Lower world cotton use pushed ending stocks higher by almost 3 million bales. Increased wheat production added a little more than 5 million metric tons to global ending stocks.
Soybean prices were hit hard today due to the shock of the increased ending stocks for the crop. Other crop futures felt the ramifications of the soybean pit and were down as well, though to a smaller degree.