The US Department of Agriculture raised forecasts world production of corn and soybeans, only slightly reducing of wheat. Meanwhile, forecasts of global ending stocks for wheat exceeded market expectations, and for corn and soybeans - are lower.

WHEAT: Global wheat production for 2012/13 is cut slightly as a result of a smaller crop in Argentina and Russia. Global trade is raised slightly and U.S. exports are unchanged. The season-average U.S. farm price is lowered, but is still projected to be a record.

TRADE CHANGES IN 2012/13

Selected Exporters
• Australia is lowered 500,000 tons to 19.0 million on slowing shipments and uncompetitive prices.
• Canada is trimmed 500,000 tons to 18.5 million as a result of slower-than-expected shipments to date.
• India is up 500,000 tons to 8.0 million as sales from government stocks are expected to pick up.
• Russia is raised 500,000 tons to 10.5 million on the strong shipment pace.
• Ukraine is up 200,000 tons to 6.2 million as a result of the government’s intention to sell additional wheat from state reserves.

Selected Importers
• Iran is up 200,000 tons to 2.7 million attributable to strong deliveries to date.

CORN: Global corn production is up because of a larger crop estimate for the United States and higher forecasts for Brazil, Paraguay, and Argentina. Global corn trade is nearly unchanged. U.S. corn exports are slashed on indications of strong domestic use, slow export sales, and strong competition from South America.

Drought-reduced production drove up U.S. prices at the same time that key competitors had record or near-record supplies. Simultaneously, early Brazilian soybean shipments and a smaller crop provided port availability to boost corn exports. Black Sea (mostly Ukrainian)corn has been competitively priced, making its way to traditional U.S. markets such as South Korea and Japan. The tailing-off of wheat exports from the Black Sea should provide traders with ample port capacity in the months ahead to execute sales.

Consequently, U.S. corn exports for the year are poised to drop to the lowest level in over 40 years, falling below wheat exports. Competitor trade has contributed to U.S. exports crashing by nearly 60 percent in just 5 years, despite world demand trending higher.

Since late November, U.S. prices have shed about $1.00 per bushel (nearly $40 per ton) and are now competitive against South American and Ukrainian prices. U.S. export sales (and shipments) are expected to surge in coming months given strong global demand and constraints on South American infrastructure.

TRADE CHANGES IN 2012/13

Selected Exporters
• U.S. corn is cut by 5.0 million tons to 26.0 million, the lowest in over 40 years.
• Argentine corn is raised by 2.0 million tons to a record 19.5 million because of strong shipments of last year’s crop and a larger forecast for the new crop.
• Brazilian corn is up 1.5 million tons to a record 22.5 million on greater production prospects and diminished U.S. competition.
• EU corn is doubled to 1.0 million tons on the pace of export licenses.
• Paraguayan corn is boosted by 800,000 tons to a record 2.4 million on strong earlyseason shipments

SOYBEAN: Global soybean production is forecast higher, with gains in the United States and Brazil partly offset
by a reduction for Argentina. Global trade is up slightly. World imports for soybean meal and oil are
up.

Accelerated by economic growth, China has rapidly become the world’s largest crusher of soybeans, capturing the value added from processing beans into oil and meal. Demand for soy oil in the food sector has remained strong, supported by rising incomes and changing diets. Rising production of soy oil has eroded the need for imports. Demand for meal in the feed sector has been stimulated by the expanding use of commercial feed which contains amhigher percentage of soybean meal. Increasing supplies of meal are partially offsettingdemand for other feed ingredients.

Most of the beans used for crushing are imported from Argentina, Brazil, and the United States. Conversely, much of the domestic beans are used directly for food, or more recently,has been sold to state reserves.

TRADE CHANGES IN 2012/13

• U.S. soybean exports are unchanged. Soybean meal exports are raised 454,000 tons to 7.9 million, and oil exports up 159,000 tons to 975,000 tons to reflect larger sales commitments.
• Argentina’s soybean exports are cut 1.0 million tons to 11.0 million on reduced supplies.
• Brazil’s soybean exports are up 1.0 million tons to 38.4 million to reflect competitiveness supported by larger supplies.
• China’s soybean meal exports are boosted 200,000 tons to 1.1 million on the unusually strong pace for the first two months into the marketing year.

anyfoodanyfeed.com