Feed grain supplies are unchanged in 2009/10, but lower ending stocks reduce supply prospects for 2010/11. Use for ethanol is raised in both years, as ethanol plants have come back on line and production of gasoline blended with ethanol has increased. With increased demand, prices are expected higher in 2010/11.
With reduced production and increased forecast use, world 2010/11 coarse grain ending stocks are projected down 9.6 million tons this month to 191.9 million. Moreover, 2010/11 ending stocks are projected 0.9 million tons lower than beginning stocks, implying that the world will use slightly more than it produces. Global coarse grain ending stocks are expected to be down slightly from those in the previous 2 years but 17 percent larger than in 2007/08.
Feed Grains Supplies Lowered in 2010/11
U.S. feed grain production for 2010/11 is projected at 354.1 million metric tons, unchanged from last month. Beginning feed grain stocks for 2010/11 are lowered 3.7 million tons to 45.3 million, as a result of lowered corn, sorghum, and barley beginning stocks, which was slightly offset by an increase in oats beginning stocks. Total feed grain supply is projected at 401.8 million tons in 2010/11, down from 405.5 million last month.
Feed grain use for 2010/11 is expected to be up 2.7 million tons this month to 357.5 million. Feed and residual use is forecast at 141.7 million tons, down from 141.8 million. Food, seed, and industrial (FSI) use is raised 2.8 million tons to 161.2 million, reflecting increased corn used for ethanol, starch, and glucose and dextrose. Exports remain unchanged this month at 54.6 million tons. Ending feed grain stocks are projected to decrease 6.3 million tons this month to 44.3 million, due to lower carryin and increased use. Projected 2010/11 farm prices are raised this month for all four feed grains.
Feed and residual use for the four feed grains plus wheat converted to a September- August marketing year is 147.5 million tons for 2010/11, down slightly from 147.6 million last month. Lower expected cattle slaughter along with lighter carcass weights contribute to lower red meat production in 2010. Hog slaughter is also reduced in 2010; however, slightly heavier carcass weights are expected. Milk production was raised this month reflecting a slower decline in cow numbers and stronger than expected growth in milk per cow. Grain-consuming animal units in 2010/11 are projected at 91.01 million this month, down slightly from 91.8 million last month. Feed and residual use per animal unit increased slightly to 1.62 tons, up from 1.61 tons last month.
There were no changes to the 2009/10 feed grain supply, as the changes to barley and oats imports offset each other. Total use was raised to 353.1 million tons, up 3.7 million tons, reflecting increases in corn FSI use and sorghum exports, which were partially offset by lowered feed and residual use of corn. This lowers ending stocks by 3.7 million tons to 45.3 million for the 2009/10 marketing year.
Record Ethanol Production Boost, Corn Use
Total U.S. corn use for 2009/10 is projected 135 million bushels higher to 13,190 million bushels this month as increased FSI use more than offsets a reduction in expected feed and residual use. Corn use for ethanol is raised 150 million bushels to 4,550 million, reflecting the continued record pace of ethanol production and usage through March based on the latest data from the U.S. Energy Information Administration (EIA). The higher ethanol production is also supported by record production of gasoline blends with ethanol as indicated by weekly data from EIA through May and forecasts for rising gasoline demand during the summer driving season. Corn use is raised 5 million bushels each for starch and glucose and dextrose, 240 million and 250 million bushels, respectively, as the ongoing economic recovery spurs production of these products. As a result of increased corn used for ethanol production, feed and residual use is lowered 25 million bushels to 5,350 million for 2009/10, as more distillers’ grains are expected to be available.
Corn exports remain unchanged this month at 1,950 million bushels. Ending stocks for 2009/10 are lowered 135 million bushels to 1,603 million, reflecting increases in FSI use.
Corn production in 2010/11 remains unchanged this month at 13,370 million bushels; however, beginning stocks are lowered 135 million bushels to 1,603 million. This lowers total supply for 2010/11 to 14,983 million bushels, which is still a record and up 190 million bushels from 2009/10. According to the June 7 Crop Progress report, corn emergence is at 94 percent in 18 major growing States as of June 6. This compares with an average of 91 percent in the previous 5 years and 85 percent last year.
Total corn use for 2010/11 is raised 110 million bushels to 13,410 million this month due to an increase in corn FSI use. Corn used for ethanol production remains strong into 2010/11 with a record 4,700 million bushels projected to be used, up 100 million bushels from last month. Corn used for glucose and dextrose is raised 5 million bushels to 255 million bushels this month. Corn used for starch was also raised 5 million bushels to 245 million this month, as economic recovery is projected to continue and demand for these products rises. Feed and residual use and exports remain unchanged at 5,350 million and 2,000 million bushels, respectively. Projected ending stocks are lowered 245 million bushels this month to 1,573 million for 2010/11.
The season-average farm price for corn is projected higher this month for the 2010/11 marketing year, due to higher expected use and tightening ending stocks. The 2010/11 farm price is projected at $3.30 to $3.90 per bushel, up 10 cents on both ends of the range. The projected range for 2009/10 is lowered 5 cents on both ends of the range to $3.45 to $3.65 per bushel. If farmers have marketed their oldcrop corn at the same rate as the average of the last 5 years, then 19 percent of the 2009/10 marketing year corn remains to be sold through August.
Sorghum Exports Raised in 2009/10
Sorghum exports for 2009/10 are raised 10 million bushels this month to 170 million based on the pace of shipments to date. This lowers 2009/10 ending stocks 10 million bushels to 33 million. The lower carryout reduces projected supplies for 2010/11, limiting opportunities for sorghum feeding. Feed and residual use for 2010/11 is projected 5 million bushels lower. Projected ending stocks for 2010/11 are also lowered 5 million bushels.
Prices received by producers for sorghum in 2010/11 are projected higher at $3.00 to $3.60 per bushel, up 10 cents on both ends of the range, supported by higher expected corn prices. The expected season average price for 2009/10 is $3.05 to $3.25 per bushel, lowered this month 5 cents on both ends of the range. If farmers have marketed their old-crop sorghum at the same rate as the average of the last 5 years, then 17 percent of the 2009/10 marketing year sorghum remains to be sold.
Barley Imports Lowered in 2009/10
The only change to barley supply and use this month is a 3-million-bushel decrease in 2009/10 barley imports to a projected 17 million bushels based on shipments from Canada. This lowers 2009/10 ending stocks 3 million bushels to 113 million, which lowers projected 2010/11 beginning and ending stocks 3 million bushels.
The barley farm price for the 2010/11 marketing year is projected at $3.35 to $3.95 per bushel, up 5 cents on both ends of the range and down from $4.65 per bushel in 2009/10. Marketings for feed barley have been extremely light in 2009/10, which can be partially attributed to weaker demand and lower prices with increased feeding of distillers' grains. Although down from record highs seen in 2008/09, the continued strength in barley prices results from increased production of malting barley, which is primarily grown on contract.
Oats Imports Up in 2009/10
The only change to oats supply and use this month is a 3-million-bushel increase in 2009/10 oats imports to a projected 98 million bushels based on shipments from Canada. This increase raises 2009/10 ending stocks 3 million bushels to 87 million, which raises projected 2010/11 beginning and ending stocks 3 million bushels.
The oats farm price for the 2010/11 marketing year is projected at $1.85 to $2.45 per bushel, up 5 cents on both ends of the range and up from $2.02 per bushel in 2009/10.
Global Coarse Grain Production Changes for 2009/10 and 2010/11 Offset
World coarse grain production projected for 2010/11 is down 1.4 million tons this month while estimated 2009/10 production was increased 1.4 million. Foreign production is forecast to increase from 754.5 million tons in 2009/10 to 774.1 million in 2010/11.
EU coarse grain production in 2010/11 is projected down 2.2 million tons this month to 147.6 million as excessive rains and flooding in eastern countries, especially Poland, reduced area and yield prospects. Some flooded fields are not expected to be harvested, while yields on other fields are likely to be reduced as fertilizers are washed away and field work is prevented by muddy soils. Reductions due to excess rain are made for Poland, Hungary, Slovakia, the Czech Republic, and Lithuania. Also, spring dryness in northern France and England reduced coarse grain production prospects. EU-27 mixed grain and barley production are each reduced 0.7 million tons, while corn and oats are each trimmed by 0.3 million, and rye is down 0.2 million.
Mexico’s 2010/11 corn production is reduced 0.5 million tons to 24.0 million as a late start to rains in the central corn area has the crop off to a poor start. Russia’s rye production is cut 0.4 million tons to 3.6 million as area harvested is reduced by greater-than-expected winterkill. The heavy rains in Eastern Europe trimmed prospects for corn yields in Croatia and barley in Serbia.
Corn production in Ukraine in 2010/11 is up 1.5 million tons this month to 13.0 million as record planted area is reported. Good late spring rains and attractive returns compared to alternative crops boosted corn area. An increase in corn area is also reported for Bosnia-Herzegovina, boosting production prospects 0.2 million tons to 0.7 million. Algeria reported an increase in barley harvested area and record yields, boosting production 0.2 million tons to 2.0 million.
Coarse grain production changes estimated for 2009/10 include a 1.5-million-ton increase for Argentina corn as increased harvested area this month and record yields boost production to 22.5 million, matching the record production reached in 2006/07. Argentina’s barley production is increased 0.2 million tons to 1.4 million. India’s millet production is estimated up 1.0 million tons this month to 8.6 million, based on higher reported yields. Partly offsetting these increases are a reduction for corn in the Philippines of 0.8 million tons to 6.2 million based on Government reports. Drought associated with El Nino in the Pacific cut corn yields in some areas, while flooding associated with typhoons also damaged corn. In Brazil, corn production for 2009/10 is reduced 0.5 million tons to 53.0 million as an early end to the rainy season in Mato Grosso and Goias reduced second-crop corn.
While global coarse grain supplies for 2010/11 are reduced 5.3 million tons this month due to reduced beginning stocks, the decline is concentrated in the United States. Foreign coarse grain beginning stocks are reduced only 0.1 million tons to 147.6 million as changes were mostly offsetting. With reduced 2009/10 corn production, Brazil’s 2010/11 beginning stocks are reduced 0.5 million tons this month, but due to increased corn production, Argentina beginning stocks were increased nearly the same amount. Increased corn feed use for 2009/10 in China more than offset increased imports, trimming 2010/11 beginning stocks prospects 0.3 million tons. However, a revision to South Africa’s 2008/09 corn exports boosted estimated stocks by 0.3 million. A 0.2-million-ton reduction in corn stocks for the Philippines is partly offset by small increases for Russia, India, and Norway.
Prospects for Global Coarse Grain Use Boosted This Month
World coarse grain use projected for 2010/11 increased 4.3 million tons this month to 1,129.3 million, with much of the increase in the United States. Foreign coarse grain use is projected up 1.7 million tons this month to 826.1 million. EU feed use is increased 0.9 million tons, mostly driven by an increase of 1.0 million tons for barley, offsetting a 1.0-million-ton reduction in wheat feeding. There is also a small reduction in EU mixed grain feeding due to reduced production. Ukraine corn feed use is up 0.5 million tons this month as increased production feeds into a dynamic poultry sector. Vietnam’s corn consumption is up 0.2 million tons this month, reflecting strong imports, and Bosnia’s corn use is boosted slightly with increased production. Partly offsetting are a 0.4-million-ton reduction in the use of rye in Russia due to reduced production and a small decline in barley feeding for Serbia, also the result of reduced production prospects.
Global Coarse Grain Stocks To Decline Slightly in 2010/11
With reduced production and increased forecast use, world 2010/11 coarse grain ending stocks are projected down 9.6 million tons this month to 191.9 million. Moreover, 2010/11 ending stocks are projected 0.9 million tons lower than beginning stocks, implying that the world will use slightly more than it produces. Global coarse grain ending stocks are expected to be down slightly from the previous 2 years, but 17 percent larger than in 2007/08.
Foreign coarse grain ending stocks for 2010/11 are projected down 3.2 million tons this month to 147.7 million. The largest decline is for the EU, down 3.1 million tons to 19.2 million as reduced production combines with increased use. EU stocks are still projected to be ample. Argentina’s coarse grain stocks are projected down 0.5 million tons this month as strong exports are expected to more than offset increased supplies from the large 2009/10 corn crop. Brazil’s reduced 2009/10 corn crop is cutting supplies and projected 2010/11 ending stocks 0.5 million tons. Increased 2009/10 corn use in China is expected to shrink 2010/11 supplies and trim coarse grain ending stocks 0.3 million tons. These declines more than offset increases in ending stocks projected this month for Ukraine, South Africa, Algeria, Vietnam, Russia, Bosnia, Philippines, India, and Norway.
World Corn Trade Boosted for 2009/10 and 2010/11
Global corn trade for 2010/11 (October-September) is up 0.9 million tons this month to 90.2 million. Mexico’s corn imports are up 0.5 million tons to 9.6 million as production prospects are reduced. Vietnam’s imports are up 0.3 million tons to 1.3 million as the previous year’s strong pace is expected to be maintained. With regional trade agreements and tight 2009/10 supplies, Philippines corn imports in 2010/11 are projected to reach a record 0.6 million tons, up 0.2 million this month.
Corn export prospects for Ukraine and Argentina are each increased 0.5 million tons this month based on increased supplies. Ukraine’s increased production is expected to boost exports to a record 5.5 million tons. Argentina’s large 2009/10 corn crop and the Government’s apparent willingness to approve export quota are boosting 2010/11 trade year export prospects to 13.5 million tons. Croatia’s corn export prospects are trimmed 0.1 million tons to 0.1 million due to reduced production. Projected 2010/11 world trade for barley, sorghum, oats, and rye are not changed this month.
Corn trade forecast for 2009/10 is revised up 1.1 million tons this month to 85.7 million tons. China’s imports are raised 0.7 million tons to 1.0 million, based on purchases from the United States. China is selling Government reserves and increasing imports to limit corn price increases. Vietnam’s corn imports are increased 0.4 million tons to 1.3 million due to robust feed demand. Argentina’s corn export prospects are increased 1.0 million tons to 13.0 million based on increased production and the strong pace of sales and shipments.
U.S. corn exports for 2009/10 are forecast unchanged this month at 49.0 million tons, up 1.1 million from the previous year. Census data indicate October 2009 to April 2010 corn shipments reached 26.6 million tons, up 1.4 million tons from a year ago, and May Export Inspections were reported 0.6 million tons higher than a year earlier. Also, as of June 3, 2010, outstanding sales were up 0.9 million tons. However, additional corn sales shipped by the end of September are expected to slump, mostly due to strong competition from Argentina and Brazil.
U.S. sorghum exports for 2009/10 are raised 0.1 million tons to 4.2 million (increased 10 million bushels to 170 million bushels for the September-August local marketing year). Sudan’s imports are increased 0.1 million tons this month to 0.3 million.
Further Reading
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June 2010
