March Supply and Demand Report Recap


Crops:

Grains/Oilseeds:
USDA released their monthly World Agricultural Supply and Demand Estimates report on Friday (Mar 9). With respect to crops, the report continues to project production and use for the 2011/12 marketing year which encompasses the 2011 crop. Therefore, the United State’s production estimates are mostly concrete by this point and thus only demand values fluctuate.

This month analysts’ forecasted ending stocks for corn, soybeans and wheat were 785, 260, and 836 million bushels respectively. Both corn and soybean values reported by USDA were unchanged from February’s at 801 and 275 million bushels, respectively, and therefore above the pre-report estimates. Wheat ending stocks were lowered from February by 20 million bushels to 825 largely due to increased wheat exports.

Globally, analyst expected ending stocks for corn, soybeans and wheat to be 123.49, 57.758, and 212.608 million metric tons (MMT), respectively. The report showed that world corn ending stocks are currently projected at 124.53 MMT versus 125.35 in February, but not as low as analyst expected. The slight decrease cannot be attributed to any one leading factor and was a result of some shuffling of values across a number of countries. Global soybean ending stocks are currently projected at 57.30 million metric tons versus 60.28 last month and marginally lower than pre-report expectations. The decrease is related to the weather issues in South America as Brazil and Argentina’s production were cut by 3.5 and 1.5 MMT, respectively. World wheat ending stocks are currently projected at 209.58 MMT versus 213.10 last month, and below expectations. The lower wheat stocks is mostly due to lower carry-over in China as well as increased use in the country.

Cotton:
U.S. cotton ending stocks were raised by 100,000 bales from last month’s estimates to 3.9 million. The decrease is solely a result of lower domestic consumption. Globally, ending stocks are projected at 62.32 million bales versus 60.77 in last month’s report. Production was increased in Brazil and Pakistan but lowered Australia and collectively increased by 300,000 bales. Consumption was lowered by noticeable amounts in Brazil and China and marginally in a few other countries totaling a drop of about 1 million bales.

Livestock:
No adjustments were made to beef or pork production estimates for 2011and total annual production for the year was 26.199 and 22.759 billion pounds, respectively.  These are mostly in-line with 2010 production as beef was down only 0.3% from 2010 and pork was up 1.4%.  For the current year, beef production was revised downward from 25.115 to 25.035 billion pounds. The decrease is largely a result of the continuing tight supply situation that is gripping the beef industry. Pork production for 2012 was unchanged at 23.235 billion pounds. Broiler production for 2011 was adjusted up to 37.201 billion pounds from 37.176 last month. The 2011 broiler production estimate is 0.8% above the 2010 production level.  Broiler production for 2012 was adjusted up from 36.100 billion pounds to 36.300.

On the demand side, 2011 domestic beef consumption was unchanged at 57.3 pounds per person annually. 2011 Beef exports were increased to 2.788 billion pounds, up 9 million pounds. Domestic beef consumption for 2012 was raised to 54.9 pounds per person, up from 54.7 last month. Beef exports for 2012 were unchanged at 2.765 billion pounds. Domestic pork consumption for 2011 was lowered slightly from 45.8 pounds per person to 45.7, while for 2012 per capita consumption is projected at 46.4 pounds versus 46.5 last month. Pork exports for 2011 were increased by 81 million pounds to 5.193 billion pounds. Exports are projected at 5.200 billion pounds for pork in 2012 compared to 5.115 last month. Domestic chicken consumption for 2011 is estimated at 82.9 pounds per person annually, up from 82.6 last month, while 2012 consumption is down from that number just a bit at 79.0 pounds per person (versus 78.3 reported last month). Chicken exports for 2011 were revised downward to 6.991 billion pounds, from 7.012 last month. Exports of chicken in 2012 are currently projected at 7.050 billion pounds, unchanged from February’s report.

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