This morning, the USDA issued its monthly update to the supply and demand outlook for the 2010-11 crop year, as well as its monthly crop production report, both of which analysts called “bullish for commodity prices” and near-term farm equipment sales.
The agency lowered its forecast for corn production to 12.447 billion bushels from 12.540 billion bushels and lowered its forecast for 2010-11 ending corn stocks to 745 million bushels from 832 million bushels, 5% below the consensus forecast of 782 million bushels.
USDA also dropped its soybean ending stocks forecast by 15% to 140 million bushels, which is about 8% below consensus of 153 million bushels. The wheat ending stocks forecast was also lowered by by 5% to 818 million bushel.
“We see the report as generally bullish for corn, soybean and wheat prices,” Henry Kirn, analyst for UBS, said in a note.
Grain Pricing
USDA raised the midpoints of its corn forecast to $5.30/bushel from $5.20. Soybean pricing was increased from $11.70/bushel from $11.45. Pricing on wheat was also raised to $5.65/bushel from $5.50.
“We view today’s report to be a positive read for 2010-11 cash receipts, as we increase our projected total major crop receipts for the year by 29% year-over-year to $123.49 billion vs. our prior view of $122.14 billion,” said Ann Duignan in a note to investors.
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