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
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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 | |||||||||
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 | |||||||||
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 | |||||||||
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 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 | 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 | |||||||||