September Supply and Demand Report Recap


After all of the news from crop scouts in the corn belt a few weeks ago, the much anticipated September WASDE report has been released. One of the bigger surprises came with the estimated corn yield. Pre-report estimates were expecting a reduction in corn yields from last month on news that the Iowa corn crop was not as good as previously thought. But, the USDA actually revised yields 0.9 bu/acre higher with a great crop in the South and the Eastern Corn Belt more than offsetting lower yields further West. The increase in yields will result in a record 13.843 billion bushels in corn being harvested this fall. Even with an increase of 55 million bushel in demand, ending stocks were revised up 15 million bushels from last month. Mississippi is expected to top last year’s record corn yields with a 170 bu/acre yield.


With reports coming out a few weeks ago of poor pod counts, it is unsurprising that the USDA revised soybean yields down by 1.4 bu/acre to 41.2 bu/acre. This figure is in line with most pre-report estimates. The lower production is partially offset by decreased crush and exports, however ending stocks were still revised down by 70 million bushels from last month to 150 million bushels. This is only 25 million bushels more than last year’s ending stocks.


Stocks of old crop (2012) cotton increased 100,000 bales based on end of marketing year data (the marketing year closed July 31, but balance sheets are still being updated). This pretty much flowed through into the new crop (2013) revised stocks number, which also increased 100,000 bales to 2.9 million total. This is not to say that no changes were made to the 2013 supply and demand projections. The U.S.’s 2013 yield was lowered 17 pounds per acre to 796 (Mississippi’s yield forecast was increased 19 pounds per acre to 1,009) due to lingering drought in West Texas which has kept a lid on crop condition ratings the past number of weeks. This pulled total 2013 production estimates down to 12.9 million bales from 13.05 projected last month (harvested acres were increased by 80,000 to 7.78 million as more information comes in from sources such as Farm Service Agency). Exports were lowered by 200,000 bales to 10.4 million due to the slow pace of sales thus far in the current marketing year.

Globally, projected ending stocks were raised by 960,000 bales largely due to increases from Brazil and India, and are currently projected at 94.73 million. Brazilian ending stocks rose 190,000 bales from last month’s estimate (currently pegged at 6.23 million bales) and India’s projected ending stocks increased 600,000 bales (to 9.39 million from last month). Despite China not seeing many revisions with their crop or ending stocks, they continue to hold the lion’s share of the stocks (62% of total world stocks).


June Supply and Demand Report Recap

The United States Department of Agriculture along with the World Ag Outlook Board released their monthly World Agriculutral Supply and Demand Estimates (WASDE) report June 12 around lunch. The report is the second to provide insight on USDA’s projections for the 2013 U.S. crop (new crop). Many expected some alterations due the slow pace to planting as a result of the cool temps and seemingly never ending rain. Continue reading “June Supply and Demand Report Recap”

April World Agricultural Supply and Demand Estimates: Crop Recap


U.S. ending stocks for soybeans remained unchanged in the April World Agricultural Supply and Demand Estimates (WASDE) report at 125 million bushels. Analysts were expecting the ending stocks number to be 137 million bushels, with a range from 107 to 160 million bushels, given the slightly higher quarterly stocks number from last month that indicated demand had been slipping. Soybean crush and exports were both revised up slightly from last month’s report, however those changes were offset by an equal decrease in residual use. Given the offsetting changes, the stocks-to-use ratio remained unchanged at 4.1%. Soybeans futures were largely unaffected by the report with the nearby May contract closing down 2.6 cents at $13.92/bu.


USDA’s April projections of U.S. corn ending stocks for the 2012/13 marketing year were pegged at 757 million bushels, 135 million higher than March projections. This was, however, lower than the average pre-report expectation of 824 million bushels, but following last month’s surprising Grain Stocks number analysts were all over the board with guesses for this month’s WASDE ending stocks (expectations ranged from 625 to 925 million bushels). Much of the difference comes from the 150 million bushel decrease in projected feed and residual use, although industrial use and ethanol use were both revised higher. Corn exports were projected to be 25 million bushels lower compared to last month’s projections. With many traders still recovering from the shock of the stocks report a couple of weeks ago and thus uncertain of where USDA would peg this month’s number, it is unsurprising that corn futures markets had a minimal response to the latest WASDE report. Corn’s stocks versus use currently sits at 6.8% compared to 5.6% last month. Global corn ending stocks were raised to 125.29 million metric tons, with the U.S. and China each accounting for 40% of the increase. May Corn contracts finished up 4.6 cents today at $6.49/bu.


Supply and demand estimates for cotton, while not mundane, were largely in-line with last month’s projections. Interestingly yield was raised 14 pounds per acre to 880 based on information from the final Cotton Ginnings report. This was partially offset by an increase in demand. Exports were raised 250,000 bales to 13.0 million. Ending stocks remained unchanged at 4.2 million bales and the ratio of stocks versus use is now at 25.6% compared to 26.0% last month. Analysts had expected the ending stock number to drop to 4.1 million bales due to the higher pace of exports, but the larger yield appears to have not been accounted for. Global cotton ending stocks were raised to 82.45 million bales, up from 81.74. China’s ending stocks are currently projected at 45.61 million bales, up 1.5 million due to increased imports, and therefore they now account for 55.3% of total world ending stocks. Cotton futures still managed to end the day higher with the nearby May contract ending the day at 85.37 cents/pound, up 0.73, and December ended at 86.57 cents/pound, up 0.78.


Today’s WASDE report appears to have had the most significant impact on the wheat market. Ending stocks for all wheat were revised up 15 million bushels compared to last month at 731 million bushels. The additional bushels are a result of lower feed and residual use than expected, however all other numbers remained unchanged. The higher than expected wheat ending stocks pushed the May wheat contract down 12 cents on the day to close at $6.96/bu


All rice ending stocks projections were raised to 34.1 million hundredweight, up from 29.1 last month. The increase stems from larger long- and medium/short-grain stocks, but with long-grain getting the bigger bump. Domestic demand is the culprit of the higher stocks; with this number decreasing from 125 million hundredweight in last month’s report to 120 projected this month. Rough rice futures ended mildly lower on the day with the nearby May contract closing at $15.675/cwt, down 3 cents/cwt, and the September contract finished at $15.42/cwt, down 4.5 cents/cwt.

Cattle Market Notes: Week Ending Jan 11, 2013

Cash Cattle:

After some slow movement to close out last week, sales were more robust this week. The five-area price was mostly unchanged at $126.37/cwt. In Texas and Oklahoma, Thursday’s trade was at $126/cwt for live cattle. In Kansas trade was at $126/cwt on Thursday and at $125/cwt on Friday. Live and dressed cattle in Nebraske were called at $125/cwt and $201-$203/cwt, respectively on Friday. The Western Cornbelt reported similar prices with live at $125/cwt and dressed at $202-$203/cwt. Continue reading “Cattle Market Notes: Week Ending Jan 11, 2013”

October Supply and Demand Tables

 Cattle & Beef 2012 2013
U.S. Beef Production (bil lbs) 25.593 24.630
% change* -0.7% -0.2%
U.S. Per Capita Beef Consumption 57 55.1
% change* -0.9% -0.2%
Fed Steer Price $121.72 $127.00
% change* 0.6% 0.0%
* percent change from previous month’s estimate

2011 % change year ago % change prev. month
Harvested Acres (mil. ac.) 87.7 4.4% 0.3%
Yield (bu/ac) 122 -17.1% -0.7%
Production (mil. bu.) 10,706 -13.4% -0.2%
Total Supply (mil. bu.) 11,769 -12.9% -1.8%
Feed Use (mil. bu.) 4,150 -9.0% 0.0%
Ethanol Use (mil. bu.) 4,500 -10.0% 0.0%
Exports (mil. bu.) 1,150 -25.5% -8.0%
Total Use (mil. bu.) 11,150 -11.0% -0.9%
Ending Stocks (mil. bu.) 619 -37.3% -15.6%
Stocks/Use 5.6%

2012 % change year ago % change prev. month
Harvested Acres (mil. ac.) 75.7 2.6% 1.5%
Yield (bu/ac) 37.8 -9.8% 7.1%
Production (mil. bu.) 2,860 -7.6% 8.6%
Total Supply (mil. bu.) 3,050 -8.3% 9.5%
Crushings 1,540 -9.6% 2.7%
Exports (mil. bu.) 1,265 -7.0% 19.9%
Total Use (mil. bu.) 2,920 -7.4% 9.4%
Ending Stocks (mil. bu.) 130 -23.1% 13.0%
Stocks/Use 4.5%

August Supply and Demand Report

[note: I have a prior obligation today. Here is a quick synopsis of the reports with more to come in later today or over the weekend]

This morning USDA’s World Agricultural Outlook Board released their August estimates of U.S. and global supply and demand (S&D) for major ag commodities. This month’s report is the first to incorporate objective field data for summer crops into the predictions. Also, USDA also released state level information in their Crop Production report, which sheds light on the locations that the drought is impacting most.

U.S. Crops

The S&D report revealed that yields for both corn and soybeans continue to be damaged. They cut the projected corn yield from 146 bushels per acre (bu/ac) reported last month to 123.4 bu/ac. This follows a drastic reduction from last month’s report (from 166 in June, see the discussion here). Collectively, the estimated national corn yield has been reduced 25.7% since June.

The projected national soybean yield was trimmed to 36.1 bu/ac from 40.5 last month.Similar to corn, this follows a reduction reported last month and collectively expected soybean yields have fallen 17.8% since June.

Yields were not the only reductions made for the U.S. corn and soybean crops. Projected acres harvested were cut as well. Corn acres harvested are currently estimated at 87.4 million and soybeans are at 74.6. These are lower by 1.5 million and 700,000 when compared to last month’s projections, respectively. If these turn out to be true this would put the percentage of acres abandoned at 9.3% for corn and 2.0% for soybeans.

Cotton experienced a yield reduction as well, albeit a very, very small reduction. Yields were lowered by 1 pound per acre (lb/ac), from 785 last month to 784. However, this was more than offset by an increase in the projected number of acres that will be harvested; an increase of 410,000 from last month’s estimate.

This, in my opinion, is the telling difference from last year’s drought compared to the drought the U.S. is experiencing this year. Last year the drought was less wide-spread and did it’s most extensive damage in the southwestern U.S. Texas, as the largest cotton producing state, was extremely dry and numerous cotton acres were left unharvested (35.8% nationally in 2011). This year, although the Southwest is still quite dry, it is not as severe as a year ago. On the other hand, the Midwest is taking the larger hit and it is shown in the projected level of abandonment for corn.

Mississippi Crops

The August Crop Production report is the first of the year to detail state specific information. Here’s a quick recap of those for Mississippi:

Acres Harvested Change from 2011 Yield Change from 2011 Production (1,000) Change from 2011
Corn 800,000 8.1% 147 14.8% 117,600 24.2%
Cotton 570,000 -5.8% 926 -2.7% 1,100 -8.3%
Peanuts 47,000 235.7% 3,900 -2.5% 183,300 227.3%
Rice 133,000 -15.8% 6,700 -2.2% 8,911 -17.7%
Sorghum 63,000 26.0% 79 6.8% 4,977 34.5%
Soybeans 2,100,000 16.7% 39 0.0% 81,900 16.7%

Corn, Sorghum and Soybean yield and production is in bushels; Cotton yield is pounds per acre and production is 480 pound bales; Rice yield is pounds per acre and production is hundredweight; Peanut yield and production is pounds.

June Supply and Demand Report Recap

The United States Department of Agriculture’s World Ag Outlook Board released their monthly supply and demand estimates report earlier this morning. The report was the second round of forecast for the current summer (new) crops, which is the 2012/13 marketing year.

Old crop (2011/12 marketing year) soybean demand estimates were really shaken up. Crushing demand was increased from 1.645 billion bushels (bbu) to 1.660 and export estimates were raised 20 million bushels (mbu) to 1.335 bbu. This pulled soybean ending stocks back to 175 mbu, 35 mbu below May’s estimate and 17 mbu lower than pre-report estimates. At 175 mbu carry-over and total use of 3.111 bbu the old crop stocks-to-use ratio is projected at 5.6%.

New crop soybean demand estimates were lowered as crushing and export use was smaller by 10 mbu and 20 mbu at 1.645 bbu and 1.485 bbu, respectively. These projected changes offset the smaller carry-over for the most part as 2012/13 ending stocks are forecast at 140 mbu (compared to 145 last month and 143 expected in pre-report estimates). The stocks-to-use ratio for the 2012/12 marketing year is currently projected at 4.3%, which if realized would be the lowest since the 1965/66 marketing year.

As an aside, winter wheat harvest is, like everything else this year, ahead of schedule which will likely translate into more bean acres in the upcoming June Acreage report (to be released June 29) as compared to the March Prospective Plantings report (which took many by surprise at that time).

Old crop corn estimates were unchanged at the aggregate level as total use and ending stocks were the same as the May report. Some shuffling within use categories was seen. Ethanol demand was lowered by 50 mbu, which was shifted to exports. Ending stocks were unchanged at 851 mbu, which was 25 mbu above pre-report estimates (last month similar expectations were made with the same outcome from USDA).

New crop corn estimates were unchanged across the board. Pre-report expectations looked for 2012/13 marketing year ending stocks to be 1.740 bbu. USDA pegged this at 1.881 bbu which, as mentioned, was unchanged from May’s report.

Much contention surrounds the 2012 crop. Early plantings pushed yield estimates higher (current USDA projected yield of 166 bu/ac is higher than the trend adjusted 160.5 bu/ac due to the fast pace to planting). On the other hand, the dry and hot conditions over the past few weeks has caused the crop’s condition to suffer as evidenced in the weekly Crop Condition report. Many expected this to push this month’s yield and production estimates lower. There remains a lot of growing season ahead and USDA apparently took that thought into their projections.

Old crop cotton experienced a bullish shift as exports were bumped up 0.2 million bales which pulled down ending stocks by the same amount. Ending stocks are currently projected at 3.2 million bales putting the 2011/12 marketing year stocks-to-use ratio at 21.3%.

New crop cotton brought in the lower stocks number but this was exactly offset by lower exports and thus the 2012/13 ending stocks estimate was unchanged at 4.9 million bales putting the current stocks-to-use ratio at 32.0%.