July Supply/Demand Estimates Recap


Soybeans

The 2013/14 crop saw a few changes from last month’s report should be considered slightly bearish even as the market moved higher. Planted acres were revised up 0.6 million acres from last month to reflect the June Acreage report. Harvested acres were revised up by 0.7 million acres while yield estimates remained the same. Soybean production was estimated to be 3.4 billion bushels, about 30 million bushels higher than the June estimate due to the higher acreage number. Soybean use also remained unchanged with ending stocks estimated to be around 295 million bushels. Most pre-report estimates were expecting a slight increase in ending stocks, even so the USDA estimate was 25 million bushels higher than analysts thought. As with corn, soybeans are trading higher on the day, shrugging off the bearish report with weather conditions worsening in a few important soybean-producing states.

Soybeans (incl. Crush) 2012-2013 Marketing Year 2013-2014 Marketing Year
Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report
Planted Acres (mil. ac.) 77.20 0.0% 2.9% 77.70 0.8% 0.6%
Harvested Acres (mil. ac.) 76.10 0.0% 3.1% 76.90 0.9% 1.1%
Yield (bu/ac) 39.60 0.0% -5.5% 44.50 0.0% 12.4%
Production (mil. bu.) 3,015 0.0% -2.6% 3,420 0.9% 13.4%
Total Supply (mil. bu.) 3,209 0.0% -3.5% 3,560 0.8% 10.9%
All Domestic Use (mil. bu.) 1,382.50 -0.1% -4.5% 1,435.83 0.0% 3.9%
SB Exports (mil. bu.) 1,330.00 0.0% -2.3% 1,450.00 0.0% 9.0%
Crush Exports (mil. bu.) 386.67 0.9% 10.8% 361.67 0.0% -6.5%
Total Use (mil. bu.) 3,085.00 0.0% -2.2% 3,264.00 0.0% 5.8%
Ending Stocks (mil. bu.) 125.00 0.0% -26.0% 3.3% 295.00 11.3% 136.0% 9.3%
Stocks/Use 4.1% 9.0%

 

Corn

The July WASDE report can be considered as slightly bearish. The projected corn production is revised down slightly at 13.95 billion bushels, down 50 million from last month’s estimate. Planted acres were revised up 0.1 million acres from last month, but is consistent with the June Acreage report. Despite this, the decreased production comes from lower expected harvested acres, which were revised down 400,000 acres from last month. Ending stocks were revised up from last month by 10 million bushels, with a 50 million bushel decrease in both feed use and exports. Many industry experts were expecting ending stocks to fall to around 1.87 billion bushels, lower than the reported 1.96 billion bushels. Although this report appears to be somewhat bearish for corn prices, both new and old crop futures were trading higher on the day on news of hot dry weather in the Western Corn Belt.

Corn: 2012-2013 Marketing Year 2013-2014 Marketing Year
Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report
Planted Acres (mil. ac.) 97.2 0.0% 5.8% 97.4 0.1% 0.2%
Harvested Acres (mil. ac.) 87.4 0.0% 4.0% 89.1 -0.4% 1.9%
Yield (bu/ac) 123.4 0.0% -16.2% 156.5 0.0% 26.8%
Production (mil. bu.) 10,780 0.0% -12.8% 13,950 -0.4% 29.4%
Total Supply (mil. bu.) 11,929 0.1% -11.7% 14,709 -0.6% 23.3%
All Domestic Use (mil. bu.) 10,500 0.5% -4.4% 11,500 -0.4% 9.5%
Exports (mil. bu.) 700 0.0% -54.6% 1,250 -3.8% 78.6%
Total Use (mil. bu.) 11,200 0.4% -10.6% 12,750 -0.8% 13.8%
Ending Stocks (mil. bu.) 729.0 -5.2% -26.3% 1.0% 1,959.0 0.5% 168.7% 4.5%
Stocks/Use 6.5% 15.4%

 

Cotton

New crop cotton stocks were raised to 2.9 million bales from last month’s projection of 2.6, largely due to increased carry-over from the 2012/13 marketing year. Current marketing year exports have been below the needed pace for some time and especially since last month’s supply/demand report. As a result, USDA lowered the estimate for 2012/13 cotton exports from 13.6 million bales last month to 13.3 in the current report. This was the only change to old crop cotton and led to higher carry-over into the 2013/14 crop year. The new crop projections showed higher planted acres (from the June Acreage report) but smaller acres harvested (with an expected increase in Texas abandonment). Yield was raised to equally offset the lower harvested acres and thus production was unchanged (interpret this as: those abandoned acres in Texas would have been low yielding). There were no changes to the projections for 2013/14 crop demand, thus the old crop carry-over was the source of the higher ending stock number for 2013/14 cotton.

Globally, 2013/14 ending stocks were raised 1.85 million bales from last month’s estimate to 94.34 largely as a result of higher stocks in India (up 1.15 mb to 8.39). China’s stocks number was unchanged at 58.93 (62.5% of total world ending stocks).

Cotton: 2012-2013 Marketing Year 2013-2014 Marketing Year
Jul Estimate Change vs Jun Change vs 2011/12 Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report
Planted Acres (mil. ac.) 12.31 0.0% -16.5% 10.25 2.2% -16.7%
Harvested Acres (mil. ac.) 9.37 0.0% -1.0% 7.80 -3.7% -16.8%
Yield (lbs/ac) 887 0.0% 12.3% 831 3.9% -6.3%
Production (mil. bales) 17.32 0.0% 11.2% 13.50 0.0% -22.1% -1.7%
Total Supply (mil. bales) 20.67 0.0% 13.6% 17.41 1.8% -15.8%
All Domestic Use (mil. bales) 3.45 0.0% 4.5% 3.50 0.0% 1.4%
Exports (mil. bales) 13.30 -2.2% 13.6% 11.00 0.0% -17.3%
Total Use (mil. bales) 16.75 -1.8% 11.6% 14.50 0.0% -13.4%
Ending Stocks (mil. bales) 3.90 8.3% 16.4% 2.90 11.5% -25.6% -1.7%
Stocks/Use 23.3% 20.0%

 

Wheat

The projected harvested acres for wheat were revised down by a million acres in the July WASDE report. The expected yield was raised by 1.6 bu/acre for a 34 million bushel boost in wheat production. Feed and residual use was revised down by 10 million bushels but exports were increased by 100 million bushels. Domestic wheat use remained unchanged, however exports were revised up 50 million bushels to 975 million bushels. Wheat ending stocks were revised down by 83 million bushels to 576 million bushels, significantly lower than pre-report expectations of 624 million bushels. The bullish report has positively impacted wheat prices with September futures closing up four cents on the day.

Wheat: 2012-2013 Marketing Year 2013-2014 Marketing Year
Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report Jul Estimate Change vs Jun Change vs 2011/12 vs Pre-Report
Planted Acres (mil. ac.) 55.70 0.0% 2.4% 56.50 0.2% 1.4%
Harvested Acres (mil. ac.) 49.00 0.0% 7.2% 45.70 -2.1% -6.7%
Yield (bu/ac) 46.30 0.0% 5.9% 46.20 3.6% -0.2%
Production (mil. bu.) 2,269 0.0% 13.5% 2,114 1.6% -6.8%
Total Supply (mil. bu.) 3,134 -0.1% 5.4% 2,962 0.2% -5.5%
All Domestic Use (mil. bu.) 1,407 1.9% 19.0% 1,311 -0.8% -6.8%
Exports (mil. bu.) 1,009 -0.1% -3.9% 1,075 10.3% 6.5%
Total Use (mil. bu.) 2,416 1.0% 8.3% 2,386 3.9% -1.2%
Ending Stocks (mil. bu.) 718 -3.8% -3.4% 0.0% 576 -12.6% -19.8% -7.7%
Stocks/Use 29.7% 24.1%

 

Rice

Rice: 2012-2013 Marketing Year 2013-2014 Marketing Year
Jul Estimate Change vs Jun Change vs 2011/12 Jul Estimate Change vs Jun Change vs 2011/12
Planted Acres (mil. cwt.) 2.70 0.0% 0.4% 2.47 -5.4% -8.5%
Harvested Acres (mil. cwt.) 2.68 0.0% 2.3% 2.45 -5.4% -8.6%
Yield (lbs/ac) 7,449 0.0% 5.4% 7,330 0.2% -1.6%
Production (mil. cwt.) 199.50 0.0% 7.9% 179.50 -5.3% -10.0%
Total Supply (mil. cwt.) 261.60 -0.2% 3.5% 235.60 -4.3% -9.9%
All Domestic Use (mil. cwt.) 120 0.0% 9.0% 112 -2.6% -6.7%
Exports (mil. cwt.) 109 0.9% 7.3% 95 -3.1% -12.8%
Total Use (mil. cwt.) 229 0.4% 8.2% 207 -2.8% -9.6%
Ending Stocks (mil. cwt.) 32.60 -4.4% -20.7% 28.60 -13.6% -12.3%
Stocks/Use 14.2% 13.8%
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