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WASDE - Corn

Jul 11, 2012

COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected sharply lower with corn

production prospects reduced 1.8 billion bushels from last month. The projected U.S. corn yield

is lowered 20 bushels per acre to 146 bushels reflecting the rapid decline in crop conditions since

early June and the latest weather data. Persistent and extreme June dryness across the central

and eastern Corn Belt and extreme late June and early July heat from the central Plains to the

Ohio River Valley have substantially lowered yield prospects across most of the major growing

regions. Harvested area is also reduced slightly based on the June 29 Acreage report.

Reduced supplies and higher prices are expected to sharply lower 2012/13 corn usage with the

biggest reduction for feed and residual disappearance, projected down 650 million bushels.

Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting

a 100-million-bushel reduction in corn used to produce ethanol. Exports are projected 300 million

bushels lower as tight supplies, higher prices, and strong competition from South American

exporters limit U.S. shipments. A 52-million-bushel increase in beginning stocks and a 15-

million-bushel increase in imports offset only a small portion of the expected reduction in this

year’s crop. Ending stocks for 2012/13 are projected at 1.2 billion bushels, down 698 million from

last month’s projection. The season average 2012/13 farm price for corn is projected at $5.40 to

$6.40 per bushel, up sharply from $4.20 to $5.00 per bushel in June.

Trade changes to the 2011/12 corn balance sheet boost projected 2011/12 ending stocks.

Imports are raised 2 million bushels based on the latest trade data. Exports are projected 50

million bushels lower reflecting the slowing pace of old-crop sales and shipments. The season

average 2011/12 farm price for corn is projected at $6.10 to $6.30 per bushel, up from $5.95 to

$6.25 per bushel last month, as cash and futures prices have soared since early June on

intensifying drought and heat across the Midwest.

Global coarse grain supplies for 2012/13 are lowered 47.6 million tons mostly reflecting the 46.2-

million-ton projected reduction in the U.S. corn crop. Partly offsetting is a 1.3-million-ton increase

in EU-27 corn production, mostly reflecting higher reported area, and a 0.4-million-ton increase in

Canada corn, also on higher reported area. Other important 2012/13 coarse grain production

changes include a 1.5-million-ton reduction for Ukraine barley, a 1.0-million-ton reduction for

Russia barley, a 0.5-million-ton reduction for Canada barley, and a 0.3-million-ton reduction for

Canada oats. Brazil 2011/12 corn production is raised again this month, up 1.0 million tons,

based on the latest reports from national and state statistical agencies.

Global 2012/13 coarse grain trade is projected lower this month mostly reflecting lower corn

exports from the United States. Corn imports are lowered 2.0 million tons each for China and

EU-27, 0.5 million tons each for Japan and South Korea, and 0.3 million tons for Mexico. Global

barley trade is also lowered with Ukraine exports down 0.5 million tons and Russia and Canada

exports each down 0.2 million tons. Barley exports for Australia and Argentina are raised 0.3

million tons and 0.2 million tons, respectively. Global corn consumption drops 22.9 million tons

with most of the decline in the United States. Corn consumption is also lowered 0.8 million tons

for India and 0.5 million tons each for Japan and South Korea. Global corn ending stocks are

projected 21.7 million tons lower with the United States accounting for 17.7 million tons of the

decline. Stocks are also lowered for China, Brazil, EU-27, and Mexico.

DISCLAIMER: This information is not to be construed as an offer to sell or a solicitation or an offer to buy the commodities herein named. The factual information of this report has been obtained from sources believed to be reliable, but is not necessarily all-inclusive and is not guaranteed as to the accuracy, and is not to be construed as representation by Commodity & Derivative Adv. The risk of trading futures and options can be substantial. Each investor must consider whether this is a suitable investment. Past performance is not indicative of future results. Read Entire Disclaimer.

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