USDA Projects Lower Grain Exports

In the September 12 World Agricultural Supply and Demand Estimates (WASDE) report, USDA projected wheat, corn, and soybean total exports in the coming crop year (2011/12) to be 4.09 billion bushels, 12 percent lower than the 2010/11 crop year. U.S. corn exports for 2011/12 are projected to be 1.650 billion bushels, 10 percent lower than last year. The national average corn yield is forecast to be 148.1 bushels per acre, 16.3 bushels below the 2009/2010 crop year and the lowest since 2005/06. Corn use for ethanol is expected to be 5.0 billion bushels, a drop from last month’s projection of 5.1 billion bushels caused by higher corn prices and a weakening outlook for U.S. gasoline demand. Soybean exports are projected to be 1.415 billion bushels, 80 million bushels less than last year. Overall, WASDE production projections for the new crop of wheat, corn, and soybeans are 17.7 billion bushels, a 2 percent reduction from last year. This year’s crops have been adversely impacted by widespread disruptive weather that included extensive flooding and late-season droughts. On Thursday morning (September 15), an early freeze covered portions of the upper Midwest, including North Dakota, Minnesota, eastern South Dakota, northern Iowa, and parts of Wisconsin. Early frosts and prolonged freezing temperatures could impact crop development; final assessments will be made before the peak harvest season.

World Agriculture Supply and Demand Estimates

Projected U.S. wheat ending stocks for 2011/12 are raised 90 million bushels this month with higher expected imports and lower expected food use and exports. Imports are raised 10 million bushels with larger supplies in Canada. Food use is projected 5 million bushels lower in line with revisions to 2010/11 based on the latest and final U.S. Bureau of Census mill grind estimates and reflecting reduced prospects for per capita flour consumption during calendar year 2011.

Exports for 2011/12 are projected 75 million bushels lower with larger supplies and exports expected for Canada and the EU-27. The season-average farm price for all wheat is projected at $7.35 to $8.35 per bushel, up from last month’s range of $7.00 to $8.20 per bushel supported by higher corn prices. Global wheat supplies for 2011/12 are projected 7.6 million tons higher mostly on larger beginning stocks in Canada and increased production for Canada, EU-27, and Ukraine. Beginning stocks for Canada are raised 1.3 million tons and production is raised 2.5 million tons, both reflecting the latest estimates from Statistics Canada.

EU-27 production is raised 2.3 million tons with increases for Germany, Romania, France, Spain, and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised 1.0 million tons based on the latest harvest reports. Other smaller production changes include 0.2-million-ton increases for both Brazil and Morocco, and a 0.2-million-ton reduction for Uzbekistan. World wheat trade is raised slightly for 2011/12 with increased imports projected for the United States and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU- 27 more than offset reductions for the United States and Turkey. Global wheat consumption is increased 1.9 million tons with higher expected wheat feeding in Canada, China, Morocco, and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/12 are projected 5.7 million tons higher at 194.6 million. At this level, global stocks would be up from 2010/11 and the second largest in the past decade.