Monthly Crop Outlook
Supply, Demand and Price Estimates
The following tables and comments are based on monthly USDA supply/demand estimates and planting intention/acreage reports. Comments in this section are basically price outlook oriented and prepared by Chuck Danehower.
November 10, 2009
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The November USDA report lowered projected 09/10 U.S. Corn Ending Stocks to 1.625 billion bushels, a decrease of 47 million bushels from October and lower than the average pre-report guesses. World ending stocks were decreased 151 million bushels from October with the current projection at 5.213 billion bushels. U.S. corn production is estimated 97 million bushels lower than the October report on a 1.3 bushel/acre reduction in the forecasted yield of 162.9 (U.S. record yield). U.S. corn exports are estimated 50 million bushels lower than last month reflecting a slower pace on recent sales and shipments. The season average price is projected to range from $3.25 to $3.85 a bushel for 09/10, $0.20 bushel higher than October. This report is perceived to be somewhat neutral to friendly to corn prices. Yields in this report were estimates as of November 1. It is possible that future reports might show a further reduction in yield from freeze/frost damage in the Upper Midwest. However, it may be the quality rather than the quantity that was affected. Currently, corn is only 37% harvested compared to the 5 year average of 82%. As more corn nationwide is harvested, prices could see pressure although it may be in the form of a wider basis. Due to the widening of the basis on delivered corn, storage is a viable alternative even for just a month or so. Support for the December 09 contract is at $3.57 bushel with resistance at $4.03 bushel. Producers should consider pricing some 2010 corn at current levels. Over the past 28 years the average difference between the November projection for U.S. ending stocks and the final estimate has been 20.5% or 329 million bushels. These numbers can and will change, but do reflect the best information and estimates at the time of the report. The next USDA Supply & Demand report will be released December10, 2009.
| Supply | 2003/ 2004 |
2004/ 2005 |
2005/ 2006 |
2006/ 2007 |
2007/ 2008 Est. |
2008/ 2009 USDA Projected |
2009/ 2010 Bearish CD est. |
2009/ 2010 USDA Projected |
2009/ 2010 BullishCD est. |
|---|---|---|---|---|---|---|---|---|---|
| Acres Planted (million acres) |
78.6 | 80.9 | 81.8 | 78.3 | 93.5 | 86.0 | 86.4 | 86.4 | 86.4 |
| Acres Harvested | 70.9 | 73.6 | 75.1 | 70.6 | 86.5 | 78.6 | 79.4 | 79.3 | 79.2 |
| U.S. Average Yield | 142.2 | 160.4 | 147.9 | 149.1 | 150.7 | 153.9 | 163.9 | 162.9 | 161.9 |
| Beg. Stocks (million bushels) |
1087 | 958 | 2114 | 1967 | 1304 | 1624 | 1674 | 1674 | 1674 |
| Production | 10089 | 11807 | 11114 | 10531 | 13038 | 12101 | 13014 | 12921 | 12822 |
| Imports | 14 | 11 | 9 | 12 | 20 | 14 | 10 | 10 | 10 |
| Total Supply | 11190 | 12776 | 13237 | 12510 | 14362 | 13739 | 14698 | 14605 | 14506 |
| Use | |||||||||
| Feed and Residual | 5795 | 6162 | 6141 | 5591 | 5913 | 5254 | 5350 | 5400 | 5450 |
| Ethanol | 1168 | 1323 | 1603 | 2119 | 3049 | 3677 | 4100 | 4200 | 4300 |
| Food, seed & industrial | 1369 | 1363 | 1378 | 1371 | 1338 | 1276 | 1260 | 1280 | 1300 |
| Exports | 1900 | 1814 | 2147 | 2125 | 2437 | 1858 | 2050 | 2100 | 2150 |
| Total Use | 10232 | 10662 | 11270 | 11207 | 12737 | 12065 | 12760 | 12980 | 13200 |
| U.S. Ending Stocks | 958 | 2114 | 1967 | 1304 | 1624 | 1674 | 1938 | 1625 | 1306 |
| Foreign Stocks | 3134 | 3092 | 2943 | 2983 | 3505 | 4072 | 3588 | ||
| U.S. Avg. Season Price | $2.42 | $2.06 | $2.00 | $3.04 | $4.20 | $4.06 | $3.10 | $3.55 | $4.25 |
| Stocks/Use | 9.4% | 19.8% | 17.5% | 11.6% | 12.8% | 13.9% | 15.2% | 12.5% | 9.9% |
| Supply and Demand Projections and Historical Data Source: USDA | |||||||||
November 10, 2009
Projections for the 09/10 U.S. Cotton ending stocks are 4.9 million bales, down 500,000 bales from last month on the basis of a production reduction of 502,000 bales. Production is estimated at 12.5 million bales, with usage at 13.9 million bales. Yields were reduced 31 pounds from 807 pounds/acre to 776 pounds/acre with the largest declines in Arkansas, Missouri, and Texas. World ending stocks for 09/10 are expected at 53.72 million bales, a reduction of 2.41 million bales from October and 8.3 million bales from the 08/09 marketing year. This is considered a friendly report for cotton. December cotton has support at 66.14 cents/pound with resistance just under 70 cents/pound. Cotton prices have broken out of their summer trading range and have been trading in the 65 – 70 cent area for the last month. The cotton market has responded to the cut in production, but most likely had already started pricing it in over the last month. Further reductions in production could be possible in future reports. As with all commodities, cotton prices will need additional help from a continued weaker dollar, and an overall economic recovery. Producers should be in contact with their cotton buyer for the best pricing alternative. Producers wanting to stay in the market may want to consider selling their crop and buying May call options to benefit in case the market continues to go up. Producers should understand any option strategies they undertake. Over the past 28 years the average difference between the November projection for U.S. ending stocks and the final estimate has been 23.8% or 1.1 million bales. These numbers can and will change, but do reflect the best information and estimates at the time of the report. The next USDA Supply & Demand report will be released December 10, 2009.
| Supply | 2003/ 2004 |
2004/ 2005 |
2005/ 2006 |
2006/ 2007 |
2007/ 2008 Est. |
2008/ 2009 USDA Projected |
2009/ 2010 USDA CD est. |
2009/ 2010 USDA Projected |
2009/ 2010 Bullish CD est. |
|---|---|---|---|---|---|---|---|---|---|
| Acres Planted (million acres) |
13.5 | 13.7 | 14.2 | 15.27 | 10.83 | 9.47 | 9.14 | 9.14 | 9.14 |
| Acres Harvested | 12.0 | 13.1 | 13.8 | 12.73 | 10.49 | 7.57 | 7.9 | 7.73 | 7.5 |
| U.S. Average Yield (lbs/acre) |
730 | 855 | 831 | 814 | 879 | 813 | 790 | 776 | 765 |
| Beg. Stocks (million bales) |
5.38 | 3.45 | 5.50 | 6.07 | 9.48 | 10.04 | 6.34 | 6.34 | 6.34 |
| Production | 18.25 | 23.25 | 23.89 | 21.59 | 19.21 | 12.82 | 13.0 | 12.5 | 12.0 |
| Imports | 0.05 | 0.03 | 0.03 | 0.02 | 0.01 | 0.00 | .01 | .01 | .01 |
| Total Supply | 23.68 | 26.73 | 29.41 | 27.66 | 28.7 | 22.86 | 19.4 | 18.84 | 18.3 |
| Use | |||||||||
| Domestic | 6.49 | 6.69 | 5.89 | 4.94 | 4.59 | 3.59 | 3.30 | 3.40 | 3.50 |
| Exports | 13.76 | 14.41 | 18.04 | 13.01 | 13.65 | 13.28 | 10.0 | 10.5 | 11.0 |
| Total Use | 20.25 | 21.10 | 23.92 | 17.95 | 18.24 | 16.86 | 13.3 | 13.9 | 14.50 |
| U.S. Ending Stocks | 3.51 | 5.50 | 6.05 | 9.48 | 10.04 | 6.34 | 6.0 | 4.90 | 3.8 |
| Foreign Stocks | 39.5 | 51.8 | 56.4 | 53.34 | 52.69 | 55.67 | 48.82 | ||
| U.S. Avg. Season Price | $0.618 | $0.416 | $0.477 | $0.465 | $0.593 | $0.478 | $0.47 | $0.53 | $0.68 |
| Stocks/Use | 17.3% | 26.1% | 25.3% | 52.8% | 55.0% | 37.6% | 49.5% | 35.3% | 26.0% |
| Supply and Demand Projections and Historical Data Source: USDA | |||||||||
November 10, 2009
The USDA November 10, 2009 report increased Soybean Ending Stocks 40 million bushels for 2009/2010 from the October report to 270 million bushels, above the average pre-report guess. Forecasted yields were increased .90 bushels/acre to a record 43.3 bushels/acre, higher than expected. Production is forecast at 3.319 billion bushels, a 69 million bushel increase above the October estimate. Exports were again raised 20 million bushels to a still record 1.325 billion bushels due to increased supplies, and increased global import demand, mainly for China, European Union, and Russia. I would still question the export number as Argentina and Brazil are expected to increase production from 08/09, which could compete for exports later in the marketing year. Currency exchange rates and the value of the U.S. Dollar will impact where the best buy in the world’s market is. World ending stocks for 09/10 increased 95.5 million bushels from the October report at 2.1 billion bushels. Currently, the season average price for 09/10 is expected to be in the range of $8.20 - $10.20 bushel, up $.20 bushel on the average from October. This report is considered neutral to negative although it is expected that outside markets will have as much influence on commodity prices as fundamental factors will. January soybean futures currently have support at $9.42 bushel with resistance at $9.89. Although soybean futures are not showing enough carry in the market to support storage, the basis has widened so that short term storage is a viable alternative to delivery. I would not want to be completely un-priced with storage so consider either locking in with a forward contract or store and protect prices with a put option. Outside influences such as the U.S. Dollar, crude oil and the stock market will affect prices. Over the past 28 years the average difference between the November projection for U.S. ending stocks and the final estimate has been 29.7% or 77 million bushels. These numbers can and will change, but do reflect the best information and estimates at the time of the report. The next USDA Supply & Demand report will be released December 10, 2009.
| Supply | 2003/ 2004 |
2004/ 2005 |
2005/ 2006 |
2006/ 2007 |
2007/ 2008 |
2008/ 2009 USDA Projected |
2009/ 2010 Bearish CD est. |
2009/ 2010 USDA Projected |
2009/ 2010 BullishCD est. |
|---|---|---|---|---|---|---|---|---|---|
| Acres Planted (million acres) |
73.4 | 75.2 | 72.0 | 75.5 | 64.7 | 75.7 | 77.5 | 77.5 | 77.5 |
| Acres Harvested | 72.5 | 74.0 | 71.3 | 74.6 | 64.1 | 74.7 | 76.8 | 76.6 | 76.1 |
| U.S. Average Yield | 33.9 | 42.2 | 43.0 | 42.9 | 41.7 | 39.7 | 43.8 | 43.3 | 42.8 |
| Beg. Stocks (million bushels) |
178 | 112 | 256 | 449 | 574 | 205 | 138 | 138 | 138 |
| Production | 2454 | 3124 | 3063 | 3197 | 2677 | 2967 | 3364 | 3319 | 3258 |
| Imports | 6 | 5 | 4 | 9 | 10 | 13 | 10 | 8 | 6 |
| Total Supply | 2638 | 3241 | 3323 | 3655 | 3261 | 3182 | 3512 | 3465 | 3402 |
| Use | |||||||||
| Crushings | 1530 | 1696 | 1739 | 1808 | 1801 | 1662 | 1675 | 1695 | 1700 |
| Exports | 885 | 1103 | 948 | 1116 | 1161 | 1283 | 1290 | 1325 | 1330 |
| Seed, Feed and Residual | 111 | 186 | 188 | 156 | 93 | 101 | 170 | 175 | 180 |
| Total Use | 2526 | 2985 | 2874 | 3081 | 3056 | 3047 | 3135 | 3195 | 3210 |
| U.S. Ending Stocks | 112 | 256 | 449 | 574 | 205 | 138 | 377 | 270 | 192 |
| Foreign Stocks | 1312 | 1486 | 1509 | 1727 | 1739 | 1419 | 1838 | ||
| U.S. Average Season Price | $7.34 | $5.74 | $5.66 | $6.43 | $10.10 | $9.97 | $7.50 | $9.20 | $10.00 |
| Stocks/Use | 4.4% | 8.6% | 15.6% | 18.6% | 6.7% | 4.5% | 12.0% | 8.5% | 6.0% |
| Supply and Demand Projections and Historical Data Source: USDA | |||||||||
November 10, 2009
The USDA November 10, 2009 report projected U.S. wheat ending stocks 21 million bushels higher from last month and 16 million bushels higher than the average trade pre report guess. USDA projections for the 09/10 marketing year are for ending stocks of 885 million bushels, which if realized would be a 10 year high. The season average price is projected to range from $4.65 to $5.05 a bushel, a narrower range from last month. This compares to $6.78 in 08/09. U.S. production is reduced 4 million bushels, but was more than offset by a decrease of 25 million bushels in exports. Projected World Ending Stocks for 09/10 are projected to be 6.918 billion bushels, an increase of 56.95 million bushels from October. Producers planning on 2010 wheat should be watching that market for pricing. Current support for July 2010 wheat is at $5.31 bushel with resistance at $5.85 bushel. Even with a weaker U.S. Dollar, U.S. wheat is overpriced in the world market as exports have continually been reduced. With projected U.S. stocks to use ratio of 42.2% and a World ratio of 24.3%, supplies are plentiful with no real incentives for prices to move up. Unless demand changes, a lower supply through reduced production will be necessary to help wheat prices. Currently, wheat is not so much trading the negative fundamentals as it is the outside markets and following the direction of corn and soybeans. I would currently have 10% priced for July 2010. If prices move back up toward $6.00 and the wheat is planted and emerged, I would add to forward pricing. On a positive note, the basis for 2010 appears to be better than it has been. Check with your elevator on 2010 pricing. Over the past 28 years the average difference between the November projection for U.S. ending stocks and the final estimate has been 9.5% or 77.2 million bushels. These numbers can and will change, but do reflect the best information and estimates at the time of the report. The next USDA Supply & Demand report will be released December 10, 2009.
| Supply | 2003/ 2004 |
2004/ 2005 |
2005/ 2006 |
2006/ 2007 |
2007/ 2008 Est. |
2008/ 2009 USDA Projected |
2009/ 2010 Bearish CD est. |
2009/ 2010 USDA Projected |
2009/ 2010 Bullish CD est. |
|---|---|---|---|---|---|---|---|---|---|
| Acres Planted (million acres) |
62.1 | 59.7 | 57.2 | 57.3 | 60.5 | 63.2 | 59.5 | 59.1 | 58.6 |
| Acres Harvested | 53.1 | 50.0 | 50.1 | 46.8 | 51.0 | 55.7 | 50.4 | 49.9 | 50.0 |
| U.S. Average Yield | 44.2 | 43.2 | 42.0 | 38.6 | 40.2 | 44.9 | 45.4 | 44.4 | 43.4 |
| Beg. Stocks (million bushels) |
491.0 | 546 | 540 | 571 | 456 | 306 | 657 | 657 | 657 |
| Production | 2345.0 | 2158 | 2105 | 1808 | 2051 | 2499 | 2288 | 2216 | 2168 |
| Imports | 68.0 | 71 | 82 | 122 | 113 | 127 | 115 | 110 | 105 |
| Total Supply | 2904.0 | 2775 | 2727 | 2501 | 2620 | 2932 | 3060 | 2983 | 2930 |
| Use | |||||||||
| Food | 912.0 | 907 | 915 | 938 | 947 | 925 | 938 | 955 | 972 |
| Seed | 80.0 | 79 | 78 | 82 | 88 | 75 | 78 | 78 | 78 |
| Feed | 203.0 | 187 | 153 | 117 | 15 | 260 | 185 | 190 | 195 |
| Exports | 1158.0 | 1063 | 1009 | 908 | 1264 | 1015 | 850 | 875 | 900 |
| Total Use | 2353.0 | 2235 | 2155 | 2045 | 2314 | 2275 | 2051 | 2098 | 2145 |
| U.S. Ending Stocks | 546.0 | 540 | 571 | 456 | 306 | 657 | 1009 | 885 | 785 |
| Foreign Stocks | 4320 | 4993 | 4837 | 4205 | 4181 | 5396 | 6033 | ||
| U.S. Avg. Season Price | $3.40 | $3.40 | $3.42 | $4.26 | $6.48 | $6.78 | $3.85 | $4.85 | $5.25 |
| Stocks/Use | 23.2% | 24.2% | 26.5% | 22.3% | 13.2% | 28.9% | 49.2% | 42.2% | 36.6% |
| Supply and Demand Projections and Historical Data Source: USDA | |||||||||