The USDA updated the U.S. and World balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report on Friday. The USDA made few changes in the December WASDE, which is to be expected.
U.S. soybean ending stocks were tightened by 20 million bushels from November’s estimate and global soybean ending stocks were decreased by 2% due to strong demand. Small changes were made to U.S. ending corn and wheat stocks, which increased 5 million bushels and 10 million bushels, respectively.
The only change made in the December WASDE to corn estimates was a 5 million bushel increase to corn imports from Canada, which had a larger crop than expected this year. Ending U.S. corn stocks increased to 832 million bushels from November’s estimate of 827 million bushels. Despite increasing reports of higher ethanol production, ethanol usage was left unchanged at 4.8 billion bushels.
World corn ending stocks was raised to 130 million metric tons, up from 129.16 million metric tons in the November report due to higher production estimates in Canada, Europe, and the Former Soviet Union.
Soybeans continued the bullish theme as U.S. ending stocks were reduced by 20 million bushels to 165 million bushels. Production estimates were unchanged with an average yield estimate of 43.9 bushels per acre, but exports were raised by 20 million bushels to 1.59 billion bushels. The reduction in ending stocks was within analyst’s estimates, so the report should have little response in the market.
Global soybean production was also reduced to 60.12 million metric tons from November’s estimate of 61.41 million metric tons. Production numbers in major producers Argentina and Brazil were left unchanged, but strong demand from China reduced ending stocks.
U.S. 2010/11 wheat ending stocks were increased to 858 million bushels in December due to a 10 million bushel decline in wheat usage for food. The USDA narrowed it estimate of price range for wheat to $5.30 to $5.70 from November’s estimate of $5.25 to $5.85.
World wheat ending stocks were raised by 4 million metric tons to 176.72 million metric tons in December. Australian and Canadian production was increased by 2.5 million metric tons combined, partially offset by a decrease in Russian production by 500,000 metric tons.
December’s WASDE was very uneventful, but this is to be expected at the end of the year. We believe the market will quickly look past this month’s WASDE and focus on weather and export demand.
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