USDA reports tightest corn stocks since 1995/96

Washington-USDA’s World Agricultural Supply and Demand Estimates (WASDE), released Feb. 9, lowered U.S. corn ending stocks for 2010/11 by 70 million bushels due to higher expected food, seed, and industrial use. As a result, the stocks-to-use ratio fell to 5 percent, the same as in 1995/96, the last time ending stocks fell to multi-year lows. The 2010/11 marketing year average farm price for corn is projected at $5.05 to $5.75 per bushel, up from $4.90 to $5.70 per bushel last month. WASDE projected corn used for ethanol at 50 million bushels higher on a higher-than-expected November final ethanol production estimate and weekly ethanol data that indicate record output for December and January. Corn food, seed, and industrial use is also projected higher for 2010/11 due to rising prospects for production of sweeteners and starch. The report left U.S. soybean supply and use projections for 2010/11 unchanged this month, leaving ending stocks at 140 million bushels. Although soybean export shipments are only modestly ahead of last year’s pace, record sales through the first five months of the marketing year are expected to result in stronger gains in the second half of the marketing year. Continued strong soybean meal export competition this spring, especially from Argentina, is expected to leave U.S. soybean crush well-below 2009/10 levels. Soybean oil exports are increased to 2.8 billion pounds reflecting continued strong export sales. The U.S. season-average soybean price range for 2010/11 is projected at $11.20 to $12.20 per bushel, unchanged from last month. WASDE said U.S. wheat supply, use, and ending stocks projections for 2010/11 are unchanged this month as well. Higher projected exports for hard red winter wheat were offset by lower domestic use, while the reverse was true for hard red spring wheat. The marketing-year average price received by wheat producers is projected at $5.60 to $5.80 per bushel, up 10 cents on the lower end of the range. No changes were made on the supply side of the U.S. 2010/11 rice supply and use balance sheet, and the all rice season average price is forecast at $12.15 to $12.65 per cwt. The 2010/11 U.S. cotton supply and demand estimates are unchanged from last month. The forecast for the average price received by producers of 79 to 84 cents per pound is raised 1 cent on the lower end and lowered 2 cents on the upper end of the range.