WASDE: Feed grain balance sheets unchanged

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According to the USDA's WASDE report, U.S. feed grain balance sheets for 2011/12 are unchanged this month. The projected ranges for the season-average corn and sorghum farm prices are both narrowed 10 cents on each end to $6.00 to $6.40 per bushel and $5.90 to $6.30 per bushel, respectively. The barley and oats farm price ranges are both narrowed 5 cents on each end to $5.25 to $5.45 per bushel and $3.40 to $3.50 per bushel, respectively.

Corn used to produce ethanol in 2011/12 is projected at 5.0 billion bushels, unchanged again this month. The latest monthly data from the Energy Information Administration (EIA) indicates that average daily ethanol disappearance fell to a 23-month low in January pushing ethanol stocks to a new record high.

Weekly EIA ethanol production data suggest average daily ethanol production during February and March has continued to fall hitting its lowest level since early last fall. Projected 2011/12 corn feed and residual use is unchanged at 4.6 billion bushels. March 1 stocks indicate a September-February feed and residual disappearance 238 million bushels lower than during the first 6 months of the 2010/11 marketing year.

Prospects for feed and residual disappearance during the remainder of 2011/12 will be limited by an improving outlook for summer wheat feeding and the potential for 2012 new-crop corn use during August. Prospects remain favorable for a large year-to-year increase in winter wheat production with planted area up 1.1 million acres and crop condition ratings substantially improved from last spring at this time, particularly in the Hard Red Winter wheat states. Larger expected supplies and competitive prices for wheat relative to corn suggest an increase in summer wheat feeding compared with last year. The quick start to corn planting this spring and more intended acres across the South raise the potential for a substantial increase in new-crop corn use before the September 1 start of the new marketing year.

Global coarse grain supplies for 2011/12 are projected 4.3 million tons lower mostly on a 4.0- million-ton reduction in corn beginning stocks in China with higher 2010/11 corn feed and residual use.

Global barley supplies for 2011/12 are also lowered 0.6 million tons mostly on lower 2010/11 and 2011/12 production for Iran. Partly offsetting is an increase in global sorghum supplies reflecting higher 2010/11 and 2011/12 production in China that more than offsets a 0.5-million-ton reduction in 2011/12 sorghum production for Mexico. Global 2011/12 corn production is nearly unchanged with a number of notable, but offsetting changes made, many of which reflect the latest available updates to officially reported statistics.

Corn production is raised 1.7 million tons for Egypt, 0.6 million tons for Indonesia, 0.4 million tons for Cambodia, and 0.2 million tons each for Colombia and Thailand. Production for Mexico is lowered 1.5 million tons based on lower harvested area as government harvest reports suggest last summer’s crop suffered greater losses than previously thought from late planting, sporadic dryness, and an early frost in eastern areas of the south-central Corn Belt.

Production for Argentina is reduced 0.5 million tons with lower yields reported for the early planted crop. South Africa production is lowered 0.5 million tons as dryness and late-season heat that persisted through mid- March reduced yield prospects in western areas of the Corn Belt. The resumption in rainfall in late March came too late for much of the crop. Venezuela production is lowered 0.4 million tons with lower reported area and yields and Laos production is lowered 0.3 million tons on lower reported area.

Global coarse grain imports and exports for 2011/12 are raised slightly with several countries adjusted based largely on the pace of trade to date. A 0.5-million-ton increase for Brazil corn exports is partly offset by a 0.1-million-ton decrease in corn exports for Mexico. Corn imports are lowered for Egypt, Thailand, and Colombia, but raised for Mexico, Indonesia, and Venezuela. Argentina sorghum exports are lowered 0.2 million tons. Sorghum imports are lowered for Japan. Kazakhstan barley exports are raised 0.2 million tons. Barley imports are raised for Morocco and Iran. Global coarse grain consumption for 2011/12 is lowered 3.4 million tons mostly on a 3.0-million-ton reduction in corn feed and residual use in China. An increase in China wheat feeding is mostly offsetting.

Mexico corn feeding is reduced 0.4 million tons, also with higher expected wheat feeding. Corn feeding is raised 0.5 million tons for Indonesia and 0.4 million tons for Egypt. A 0.5- million-ton reduction in Brazil corn feeding is offset by the same size increase in food, seed, and industrial use for the country. Sorghum consumption is raised for China, but lowered for Mexico and Japan. Barley feeding is lowered for Saudi Arabia. Global coarse grain ending stocks for 2011/12 are lowered 0.9 million tons, with a 1.8-million-ton decline for corn partly offset by increases for barley and sorghum.


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