According to analysis by the American Farm Bureau Federation – the tight corn and soybean stocks forecast for the U.S. in the April World Agricultural Supply and Demand Estimates report confirms the ongoing impact of the extensive drought of 2012. The report estimated an increase in 2012-13 corn ending stocks – but the increase wasn’t as drastic as predicted in the March stocks report. Farm Bureau Economist Todd Davis says the stocks report found 400-million bushels more than the pre-stocks report forecast – but the WASDE report showed ending stocks up only 125-million bushels from the March estimate at 757-million bushels. The stocks-to-use ratio is still straggling at 6.8-percent. Davis says there just isn’t a large buffer of corn available to withstand weather or other production related problems for this year’s crop. He says the latest report – if realized – shows ending stocks to be the smallest since 1995-96.
USDA reduced feed and residual use by 150-million bushels but increased the corn for ethanol demand by 50-million bushels to 4.55-billion bushels. USDA lowered export use predictions by 25-million bushels to 800-million. Davis says that’s a 48-percent decrease from the 2011-12 marketing year. If realized – that would be the lowest corn export since 1971-72. He says it’s a reflection of our already elevated corn prices.
Soybean ending stocks were unchanged from the March estimate of 125-million bushels. The stocks-to-use ratio is tighter than corn at 4.1-percent. There is approximately 15 days of soybean supply on hand on September 1.
World ending stocks for wheat, corn and soybean increased from the March estimates. Davis says the majority of world wheat and corn increases will come from China. The increase in the world soybean crop will come from South America – where Davis notes both Brazil and Argentina rebounded from drought and are expected to handle much of the world demand until the U.S. can harvest and become competitive again.
The next WASDE report will provide the first supply and demand projections for the 2013 crop. It will be released May 10th.
Source: NAFB News Service