USDA March crop report delays making any dramatic changes

08 March 2013 22:54  [Source: ICIS news]

HOUSTON (ICIS)--Pointing to lower-than-expected exports of corn as well as increased imports from South America, the US Department of Agriculture (USDA) postponed making any significant changes to Friday’s release of the March World Agricultural Supply and Demand Estimates (WASDE).

USDA officials said there will be a fresh round of forecasting when it releases its Quarterly Grain Stocks report on 28 March. But for now it has left unchanged its February estimates for ending stocks of corn at 632m bushels, which marked an increase by 30m bushels.

The only immediate change in this month’s release was that the federal agency raised corn imports to the US by 25m bushels based on anticipated strong shipments and lowered the season average price by 20 cents a bushel to a price range of $6.75-7.45/bushel (€5.13-5.66/bushel).

Last month, the USDA released their first grains and oilseeds outlook for the spring crop, in which the federal agency projected that US farmers will grow 14.53bn bushels of corn on 96.5m acres. Additionally, 2013 soybean production was estimated at 3.405bn bushels on plantings totalling 77.5m acres.

For their part, March corn futures have responded positively to the expectations of a robust planting season and a considerable uptick in projected yields following the drought-ravaged crop production of 2012. The rebound lifted prices higher over the past week until this past Wednesday when they fell 24 cents to close at $7.08/bushel.

Market analysts said at the time that they believe the sharp drop was a reaction to improving US crop prospects and the growing concern over export prospects.

On Friday, corn took another leap higher, up 13.75 cents to close at $7.2575/bushel.

Internationally, the estimate for Brazil remains the same as in February, with the USDA pegging that corn crop at 72.6m tonnes, but the organization did slice away some of Argentina’s production. The report lowered corn from 27m tonnes to 26.5m tonnes primarily based on extended dry conditions within that country.

In terms of the other major US crop, the March WASDE did not change soybean supply and usage as it left ending stocks at 125m bushels. This surprised some agricultural analysts who had thought the USDA would decrease those numbers given that exports of the commodity are up 8% ahead of recent projections.

The report did make note that the USDA feels exports will decline going further into the crop season, as there will be pressure applied from South America’s harvesting of soybeans. The only noted change from February to March is that that the report did draw down the forecasted price by 25 cents/bushel to a range of $13.80-14.80/bushel.

Soybeans have been in the driver seat as far as grain commodities have been concerned in recent months due to global demand and indications within the US agricultural community that more acres than initially thought could be planted. On Friday, March soybeans were up 5 cents to close at 15.0850 per bushel.

($1 = €0.76)

By: Mark Milam
+1 713 525 2653

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