WASDE: 2012 farm price for corn projected 30 cents lower

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According to the USDA's latest World Agricultural Supply and Demand Estimates report, U.S. feed grain ending stocks for 2011/12 are projected slightly higher with a small decrease in domestic corn use and a small increase in oats imports. Corn food, seed, and industrial use is lowered 5 million bushels with early marketing-year corn use for sweeteners down slightly year on year.

Projected corn ending stocks rise 5 million bushels to 848 million. Oats imports are increased 5 million bushels with the strong pace reported in recent months and larger production in Canada. Ending stocks for oats are raised the same amount. Sorghum exports are reduced 20 million bushels reflecting the continued slow pace of sales and shipments and increased buying of feed quality wheat by Mexico. Feed and residual use for sorghum is raised an offsetting 20 million bushels.

The 2011/12 season-average farm price for corn is projected 30 cents lower on each end of the range to $5.90 to $6.90 per bushel. Corn prices received by producers have been reported 40 to 50 cents per bushel below prevailing cash market bids reflecting apparent deliveries of grain that was forward priced below $6 per bushel ahead of planting this past spring.

Declines in futures prices since early November have also tempered the outlook for seasonal price gains over the coming months. The sorghum farm price is lowered 30 cents on each end of the range to $5.70 to $6.70 per bushel. The barley farm price is lowered to $5.20 to $5.80 per bushel compared with $5.35 to $6.05 last month as reported prices for malting barley continue to fall short of earlier expectations.

The oats farm price range is narrowed 5 cents on each end to $3.20 to $3.60 per bushel.

Global coarse grain supplies for 2011/12 are projected 7.4 million tons higher as lower beginning stocks for corn and barley are more than offset by an 8.5-million-ton increase in corn production, mostly reflecting higher output from China. Global corn beginning stocks for 2011/12 are reduced 0.8 million tons with a downward revision to 2010/11 production for South Africa. Global barley beginning stocks for 2011/12 are lowered 0.8 million tons mostly reflecting the lower 2010/11 Australia barley production estimate recently released by the Australian Bureau of Statistics.

Global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a 3.5-million-ton decline year-to-year in the United States. Foreign corn production is expected to be up 43.4 million tons from 2010/11. China 2011/12 production is raised 7.3 million tons this month based on the recently released estimate from the National Bureau of Statistics. Slightly higher area and a 3 percent increase in yields from the previous forecast boost this year’s crop to a record 191.8 million tons.

This year’s yield estimate is up 3 percent (3 bushels per acre) from the previous record in 2008/09 and up 9 percent (8 bushels per acre) from the recent low in 2009/10. Weather was generally favorable for this year’s crop; record yields were reported despite summer conditions in the northeast growing areas that were somewhat warmer and drier than in 2008/09. Corn production is also raised 1.0 million tons for EU-27 and 0.7 million tons for Canada based on the latest government reports.

World coarse grain trade for 2011/12 is mostly unchanged this month with corn and sorghum imports and exports down slightly, but partly offset by small increases for barley. Corn imports are lowered 0.5 million tons for EU-27 with the larger crop and lower expected shipments from Serbia. Lower sorghum imports for Mexico and an increase in exports for Australia mostly offset the reduction in expected U.S. shipments.

Barley exports are raised for Russia and Argentina countering a reduction for Australia and higher imports for Algeria. Global corn consumption is raised mostly reflecting a 2.0-million-ton increase in China corn feeding. Global corn ending stocks are projected 5.6 million tons higher, mostly on increased stocks in China. At the projected 127.2 million tons, world ending stocks remain at a 5-year low.

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