Friday, April 8, 2011

UPDATED: World Agricultural Supply and Demand Estimates April 8, 2011

UPDATE: Bloomberg has the story, below.
Original post:
Wheat up 3 1//2 cents at $8.125.
Corn futures are up 8 cents at $7.67. Our thinking yesterday was to fade the release, nothing done yet.
Here's the release, we'll be back later today with comments:
Wheat: ending stocks slightly lower
Corn: ending stocks unchanged.
...COARSE GRAINS: U.S. corn ending stocks are unchanged this month as a projected increase in corn use for ethanol is offset by a reduction in expected feed and residual use. Corn used to produce ethanol is raised 50 million bushels as strong blender incentives and positive ethanol producer margins continue to encourage expansion in ethanol production and use. Rising gasoline prices have pulled ethanol prices higher helping to offset increases in corn feedstock costs for ethanol producers.

U.S. corn feed and residual use is lowered 50 million bushels as increased prospects for 2011 SRW wheat production and higher year-to-year corn plantings in the South reduce expected corn feed and residual disappearance during the second half of the 2010/11 corn marketing year. SRW wheat plantings are up sharply year-to-year with the March 31 Prospective Plantings report further increasing acreage in the SRW wheat states. A weighted average of early April crop conditions in the SRW states shows the highest percent of the crop in good-to-excellent condition in 5 years. Winter wheat conditions are especially favorable in Arkansas and North Carolina where wheat feeding is an alternative for poultry and hog producers. Cash and futures prices for SRW wheat have recently dropped below those for corn on a pound-for-pound basis creating opportunities for wheat to replace higher priced corn in feeding rations. Prospects for early new-crop corn usage ahead of September 1 are also increased with the largest intended southern corn plantings since 2007 and high expected summer corn prices....
From Bloomberg:
U.S. Corn, Soybean Inventory Outlook Unchanged; Wheat Stockpiles Decline
...“It gets kind of scary, from the standpoint of how tight the supply currently is,” said Christian Mayer, a market analyst at Northstar Commodity Investments Co. in Minneapolis. “Something has got to change. Either end- users have to slow down on demand, or use something else” as a substitute for corn, he said....MORE