USDA's World Ag Supply Demand Estimates Report

Thursday, USDA released its latest World Agriculture Supply and Demand Estimates report. U.S. wheat ending stocks for 2008/09 are projected to be 16-million bushels lower this month as a 5-million bushel increase in imports are more than offset by higher projected domestic use. Seed use is raised 1 million bushels based on producer intentions. Feed and residual use is projected 20 million bushels higher. The 2008/09 season-average farm price is projected up 10 cents on the lower end of the range to $6.80 to $6.90 per bushel. This is well above the previous record of $6.48 per bushel in 2007/08. Global wheat supplies for the period are nearly unchanged. World wheat trade is projected to be higher this month while world consumption is projected lower.
U.S. corn ending stocks for 2008/09 are projected 40 million bushels lower this month as higher expected feed and residual use more than offsets a reduction in food, seed, and industrial use. Feed and residual use is raised 50 million. Food, seed, and industrial use is lowered 10 million bushels. Corn use for starch is projected down 10 percent from 2007/08 as declining demand for construction materials and paper products reduce demand for starch. The 2008/09 season-average farm price for corn is projected at $4.00 to $4.40 per bushel, up 10 cents on both ends of the range. This compares with the 2007/08 record of $4.20 per bushel.

Feed and residual use for 2008/09 is lowered 5 million bushels each for barley and oats. Barley exports are also lowered slightly based on the pace of exports to date. Projected ending stocks for both commodities are raised accordingly. The season-average farm price for barley is projected at $5.20 to $5.30 per bushel, up 10 cents on the lower end of the range. The oats farm price range is narrowed 5 cents on both ends of the range to $3.10 to $3.20 per bushel.

The projected sorghum farm price is raised 10 cents on both ends of the range to $3.15 to $3.45 per bushel. Global coarse grain supplies for 2008/09 are projected 2.7 million tons lower this month with lower sorghum, barley, and corn production. Brazil corn production is raised 1.0 million tons reflecting higher indicated yields for the primary summer crop now being harvested. World corn exports for 2008/09 are projected 1.2 million tons higher this month. Global corn feed use is nearly unchanged. Global corn ending stocks for 2008/09 are projected 1.3 million tons lower.

For Rice no changes are made on the supply side of the U.S. supply and use balance sheets. On the use side, domestic and residual use is estimated at a record 135 million cwt, 6 percent above last month, and 9 percent above 2007/08. The all rice season-average farm price for 2008/09 is forecast at $15.75 to $16.75 per cwt, up 25 cents on both ends of the range from a month ago. The combined medium- and short-grain farm price range is projected at $21.25 to $22.25 per cwt, up 75 cents on each end of the range from a month ago, while the long-grain farm price range is projected at $14.50 to $15.50 per cwt, unchanged from last month. Global 2008/09 production, consumption, trade, and ending stocks are nearly unchanged from a month ago.

U.S. soybean exports for 2008/09 are increased 25 million bushels to a record 1.21 billion reflecting strong year-to-date shipments and outstanding sales, and prospects for reduced export competition from South America as the Argentina soybean crop continues to deteriorate. Soybean crush is reduced 5 million bushels and seed use is raised reflecting expected plantings for 2009. U.S. soybean ending stocks are reduced 20 million bushels to a projected 165 million, the lowest since 2003/04.

Price forecasts for soybeans, soybean oil, and soybean meal are all raised. The U.S. season-average soybean price range for 2008/09 is projected at $9.25 to $10.05 per bushel compared with $8.85 to $9.85 per bushel last month. Soybean oil prices are forecast at 30 to 32 cents per pound, compared with the previous range of 28.5 to 31.5 cents per pound. The soybean meal price range is narrowed to $280 to $300 per short ton compared with $265 to $305 last month.

Global oilseed production for 2008/09 is projected at 403.5 million tons, down 4.2 million tons from last month. Soybean production for Argentina is projected at 39.0 million tons, down 4 million due to lower harvested area and yields. Global 2008/09 oilseed ending stocks are reduced 4.1 million tons due mostly to lower soybean stocks in Argentina, Brazil, and the United States.

Projected 2008/09 U.S. sugar supply is increased 274-thousand short tons, raw value, from last month, mainly due to increased imports. Production changes were largely offsetting. Imports from Mexico are increased 320-thousand tons to 1 million tons, based on the strong pace to date.