Skip to Main Content

The University of Tennessee | Institute of Agriculture

Department of Agricultural and Resource Economics

Frequently Used Tools:




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.

February 9, 2010


Listen to the comments or download the file

click to subscribe to rss feed for Podcast Click to subscribe to podcast


Corn X

February 9, 2010

The February USDA report lowered projected 09/10 U.S. Corn Ending Stocks to 1.719 billion bushels, a decrease of 45 million bushels from January and 28 million bushels lower than the average trade guess. Usage is projected to increase 45 million bushels on a 100 million bushel increase in ethanol, a 5 million bushel reduction in corn use for sweeteners, and a 50 million bushel decrease in exports. World ending stocks were decreased 85 million bushels from January with the current projection at 5.3 billion bushels. An increase in world consumption more than offset the increase in production. The season average price was narrowed 5 cents on both ends and is projected to range from $3.45 to $3.95 a bushel for 09/10. I would look for a little strength or bounce in corn prices before downward pressure starts to exert itself. March corn futures closed today at $3.59 with support at $3.49 bushel and resistance at $3.66 bushel. If you believe in the theory that chart gaps get filled there is a gap at $3.92, but it would take a strong rally to fill it. A more reasonable target to sell corn in storage would be $3.70 - $3.75 bushel. Corn prices like all commodities will need additional help from outside influences for prices to move higher.  The September contract was up 3 cents at $3.87 bushel with current chart support at $3.78 and resistance at $3.92 bushel. It also has a chart gap at $4.15. I look for corn to trade sideways until 2009 production is more finalized and we begin to see a clearer picture on 2010 acreage. The March USDA report will include a resurvey of states that still have un-harvested corn and an update in production if warranted. The prospective planting report will be released March 31. For 2010 corn production, I would target $4.00 bushel to make catch up sales. I am currently at 40% forward priced. Over the past 28 years the average difference between the February projection for U.S. ending stocks and the final estimate has been 11.6% or 152 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 March 10, 2010.

 

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)
78.6 80.9 81.8 78.3 93.5 86.0 86.5 86.5 86.5
Acres Harvested 70.9 73.6 75.1 70.6 86.5 78.6 79.6 79.3 79.0
U.S. Average Yield 142.2 160.4 147.9 149.1 150.7 153.9 165.5 165.2 164.9

Beg. Stocks
(million bushels)
1087 958 2114 1967 1304 1624 1673 1673 1673
Production 10089 11807 11114 10531 13038 12092 13174 13151 13027
Imports 14 11 9 12 20 14 10 10 10
Total Supply 11190 12776 13237 12510 14362 13729 14857 14834 14710

Use
Feed and Residual 5795 6162 6141 5591 5913 5246 5550 5550 5600
Ethanol 1168 1323 1603 2119 3049 3677 4200 4300 4400
Food, seed & industrial 1369 1363 1378 1371 1338 1276 1260 1265 1270
Exports 1900 1814 2147 2125 2437 1858 1950 2000 2050
Total Use 10232 10662 11270 11207 12737 12056 12910 13115 13320
U.S. Ending Stocks 958 2114 1967 1304 1624 1673 1947 1719 1390
Foreign Stocks 3134 3092 2943 2983 3478 4070   3558  
U.S. Avg. Season Price $2.42 $2.06 $2.00 $3.04 $4.20 $4.06 $3.25 $3.70 $4.25
Stocks/Use 9.4% 19.8% 17.5% 11.6% 12.8% 13.9% 15.1% 13.1% 10.4%
Supply and Demand Projections and Historical Data Source: USDA

 

Cotton X

February 9, 2010

Projections for the 09/10 U.S. Cotton ending stocks are 3.3 million bales, down a million bales from last month on increased exports. Exports were raised to 12 million bales as new export sales of 1.8 million bales were made in January. Lower prices for U.S. cotton coupled with strong foreign mill demand boosted exports. The stocks to use ratio is estimated at 21.4%, the lowest since the 2003/04 marketing year. World ending stocks for 09/10 are expected at 52.08 million bales, a slight increase of 360,000 bales from January. This is considered a friendly report for cotton.  March Cotton closed today at 72.18 cents/pound with support at 67.95 cents/pound and resistance at 74.27 cents/pound. Equities for the 2009 crop have been quoted in the 10 cent range.  December cotton closed at 72.26 cents per pound with support at 70.18 cents per pound and resistance at 74.04.  Keep in contact with your cotton buyer on current prices as well as forward pricing alternatives. Any rallies on December futures to 76 – 78 cents, should be rewarded with forward sales or a put option strategy.  Over the past 28 years the average difference between the February projection for U.S. ending stocks and the final estimate has been 14.1% or 800,000 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 March 10, 2010.

Supply 2003/
2004
2004/
2005
2005/
2006
2006/
2007
2007/
2008
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 9.15 9.15 9.15
Acres Harvested 12.0 13.1 13.8 12.73 10.49 7.57 7.73 7.69 7.65
U.S. Average Yield
(lbs/acre)
730 855 831 814 879 813 783 774 765

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 12.6 12.4 12.2
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 19.0 18.74 18.5

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 11.5 12.0 12.5
Total Use 20.25 21.10 23.92 17.95 18.24 16.86 14.8 15.4 16.0
U.S. Ending Stocks 3.51 5.50 6.05 9.48 10.04 6.34 4.1 3.3 2.5
Foreign Stocks 39.5 51.8 56.4 53.34 52.61 56.08   48.78  
U.S. Avg. Season Price $0.618 $0.416 $0.477 $0.465 $0.593 $0.478 $0.51 $0.605 $0.69
Stocks/Use 17.3% 26.1% 25.3% 52.8% 55.0% 37.6% 37.1% 29.9% 23.3%
Supply and Demand Projections and Historical Data Source: USDA

 

Soybeans X

February 9, 2010

The USDA February 9, 2010 report decreased Soybean Ending Stocks 35 million bushels for 2009/2010 from the January report to 210 million bushels, lower than the average pre-report guess. Exports were raised 25 million bushels to a record 1.4 billion bushels as shipments continue to exceed earlier projections. China appears to be in a process of stockpiling protein for livestock expansion and has a need for soybeans. Soybean crush was also increased 10 million bushels reflecting strong soybean meal exports and a lower soybean meal extraction rate. World ending stocks were 2.2 billion bushels for 09/10, a decrease of 2.6 million bushels from the January report. Brazil’s soybean crop is projected at a record 2.43 billion bushels while Argentina is projected to produce a record 1.95 billion bushel crop. Currently, the season average price for 09/10 is expected to be in the range of $8.70 - $10.20 bushel, down $.20 bushel on the average from January. The soybean market opened up strong on a friendly USDA report, but has since given back the earlier gains. March soybean futures closed today at $9.25 a bushel with current support at $9.08 bushel with resistance at $9.50. November soybeans closed at $9.13 bushel with support at $9.03 bushel and resistance at $9.25. There is concern that the record South American crop will put a lid on prices. As in corn, 2010 acreage will dictate price movement. I would be 15% forward priced for 2010 soybeans. I would use $9.50 as a target price to catch up or increase sales. To make that price move, the soybean market will need help from outside influences, at least in the short term. Over the past 28 years the average difference between the February projection for U.S. ending stocks and the final estimate has been 22.9% or 62.5 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 March 10, 2010.

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 76.4 76.2
U.S. Average Yield 33.9 42.2 43.0 42.9 41.7 39.7 44.2 44.0 43.8

Beg. Stocks
(million bushels)
178 112 256 449 574 205 138 138 138
Production 2454 3124 3063 3197 2677 2967 3395 3361 3338
Imports 6 5 4 9 10 13 10 8 6
Total Supply 2638 3241 3323 3655 3261 3182 3543 3507 3482

Use
Crushings 1530 1696 1739 1808 1801 1662 1710 1720 1730
Exports 885 1103 948 1116 1161 1283 1385 1400 1415
Seed, Feed and Residual 111 186 188 156 93 101 172 177 182
Total Use 2526 2985 2874 3081 3056 3047 3267 3297 3327
U.S. Ending Stocks 112 256 449 574 205 138 276 210 155
Foreign Stocks 1312 1486 1509 1727 1741 1392   1985  
U.S. Average Season Price $7.34 $5.74 $5.66 $6.43 $10.10 $9.97 $8.00 $9.45 $10.10
Stocks/Use 4.4% 8.6% 15.6% 18.6% 6.7% 4.5% 9.9% 7.5% 5.4%
Supply and Demand Projections and Historical Data Source: USDA

 

Wheat X

February 9, 2010

The USDA February 9, 2009 report projected U.S. wheat ending stocks 5 million bushels higher from last month and slightly higher than the average trade pre report guess. USDA projections for the 09/10 marketing year are for ending stocks of 981 million bushels reflecting a 5 million bushel increase in imports. The season average price is projected to range from $4.75 to $4.95 a bushel, narrowed by 5 cents on both ends. World Ending Stocks for 09/10 are projected to be 7.2 billion bushels, a slight increase of 9.6 million bushels from January. July wheat closed at $5.10 today with current support at $4.98 bushel with resistance at $5.22 bushel. On its own, wheat prices will have difficulty moving higher. Ending stocks are burdensome. For wheat prices to rally, there will need to be a combination of a lower dollar, improving economy, and a rally in corn and soybeans. Wheat has tended to be a follower of corn and soybeans. I would currently have 20% priced for July 2010. I would expect lower prices at harvest, but I am hesitant to price more until wheat breaks dormancy. Put options should be considered as a means of setting a floor price. Over the past 28 years the average difference between the January projection for U.S. ending stocks and the final estimate has been 6.9% or 47.8 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 March 10, 2010.

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
Bullish
C
D 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 44.4 44.4 44.4

Beg. Stocks
(million bushels)
491.0 546 540 571 456 306 657 657 657
Production 2345.0 2158 2105 1808 2051 2499 2238 2216 2218
Imports 68.0 71 82 122 113 127 120 115 110
Total Supply 2904.0 2775 2727 2501 2620 2932 3015 2988 2960

Use
Food 912.0 907 915 938 947 925 928 940 978
Seed 80.0 79 78 82 88 75 72 72 72
Feed 203.0 187 153 117 15 260 160 170 180
Exports 1158.0 1063 1009 908 1264 1015 800 825 950
Total Use 2353.0 2235 2155 2045 2314 2275 1960 2007 2080
U.S. Ending Stocks 546.0 540 571 456 306 657 1055 981 905
Foreign Stocks 4320 4993 4837 4205 4143 5370   6216  
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% 53.8% 48.9% 42.3%
Supply and Demand Projections and Historical Data Source: USDA