WASDE: Feed grain supplies unchanged

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According to the USDA's World Agricultural Supply and Demand Estimate (WASDE) report, U.S. feed grain supplies for 2012/13 are virtually unchanged as adjustments to 2011/12 balance sheets are largely offsetting and projected 2012/13 production and use are unchanged on the month. Projected 2012/13 season average price ranges for corn, sorghum, barley, and oats are all unchanged.

Adjustments to corn usage for 2011/12 reflect the latest ethanol production and trade data. Corn used to produce ethanol in 2011/12 is projected 50 million bushels higher. Weekly ethanol production has increased since mid-April after gradually declining from the record levels of late December. The higher corn use projection assumes slightly lower ethanol production during the June-August quarter as compared with the same period last year.

Corn exports are projected 50 million bushels lower as shipments and sales continue to fall off of the pace needed to reach last month’s projection. Tight domestic supplies and increased competition, especially from Brazil, are also expected to reduce U.S. export prospects during the summer months. Projected corn ending stocks for 2011/12 are unchanged, as is the 2011/12 season average farm price which remains at $5.95 to $6.25 per bushel.

Changes to the 2011/12 balance sheets for sorghum, barley, and oats are driven by the latest trade data and also mostly offsetting. Sorghum exports for 2011/12 are projected 10 million bushels lower, but offset by a 10-million-bushel increase in expected feed and residual use. Projected barley imports are raised 4 million bushels and exports are lowered 3 million bushels boosting ending stocks 7 million bushels. Oats ending stocks are projected 10 million bushels lower with projected imports lowered 15 million bushels and feed and residual use reduced 5 million bushels. Projected 2011/12 farm prices for all three feed grains are unchanged.

Global coarse grain supplies for 2012/13 are projected 4.8 million tons higher with increases in corn beginning stocks and production. Global corn beginning stocks are increased 1.6 million tons mostly reflecting higher 2011/12 production for Brazil and China. Brazil corn production is raised 2 million bushels for 2011/12.

Despite lower reported area for the main season crop, the rapid expansion in area and nearly ideal weather for the second season (safrinha) crop is boosting Brazil’s corn production prospects to a record 69 million tons. Much of the expansion in safrinha corn has been in the Central West region, where corn is planted in January and a pronounced dry season typically begins by early May. This year’s rainy season extended through early June providing an additional 4 to 6 inches of beneficial rainfall for filling corn. China’s 2011/12 corn production is raised 1.0 million tons in line with recent revisions to official government estimates.

World corn production for 2012/13 is increased 4.2 million tons this month with increases in China, EU-27, and FSU-12. China production for 2012/13 is raised 2.0 million tons based on higher reported corn area as land planted to soybeans declines.

EU-27 corn production is increased 1.1 million tons mostly on higher area and yields for Hungary. Production is up 0.8 million tons for Russia and 0.3 million tons for Belarus both on higher reported area. World barley production is lowered, however, with a 0.5-million-ton reduction for Turkey and 0.2- million-ton reduction for Syria.

Global 2012/13 coarse grain trade is projected higher this month on increased imports and exports of corn. Corn imports are raised for EU-27 and Indonesia. Corn exports are increased for Russia and Belarus, both reflecting higher expected production and supplies.

Higher imports and production support increased corn feeding in EU-27. Higher beginning stocks and production in China boost prospects for feeding, but a partly offsetting reduction in industrial use limits the increase in corn consumption. Russia corn feeding is lowered 0.3 million tons reflecting slower expected year-to-year growth in feed grain consumption with rising feeding efficiencies in pork and poultry production. Global corn consumption is increased 2.4 million tons. Global corn ending stocks are projected 3.4 million tons higher.

Of the increase, 2.0 million tons are for China and 1.0 million tons are for Brazil.

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