Milling & Baking News - August 21, 2012 - 23

would be added pressure on Congress to reduce the ethanol mandate, Mr. Meyers said, but if prices stay around $8, “they might not do anything.” Livestock feeders will (or already have) feel the most pain with cash basis levels also expected to be strong, resulting in record high feed prices. Farmers, coming off two or three years of strong corn prices, are expected to be ﬁrm holders of their 2012 corn crop. In addition to forecast increased wheat feeding, modest relief also may be seen from increased production from 2011 of sorghum, barley and oats. Soybeans still have hope Although U.S.D.A. crop condition ratings for soybeans have been nearly as bad as those for corn, the drought’s actual effect on the soybean crop is expected to be somewhat less than on corn. But due to extremely tight soybean stocks, the price impact may be just as great. “The soybean situation was tight even before the drought,” Mr. Meyers noted. He suggested soybean supplies will remain especially tight until the South American harvest begins early next year. The U.S.D.A. on Aug. 10 forecast U.S. soybean production at 2,692 million bus, down 12% from 3,056 million bus in 2011 and 3,050 million bus forecast in July and down 16% from the initial May projection of 3,205 million bus. If realized it would be the smallest crop since 2,677 million

bus in 2007. The soybean number was below the pre-report average of 2,786 million bus. Average soybean yield was forecast at 36.1 bus an acre, down 5.4 bus from 41.5 bus an acre in 2011 and the lowest since 33.9 bus an acre in 2003. Forecast yield was down 4.4 bus from 40.5 bus an acre in July and down 7.8 bus, or 18%, from 43.9 bus an acre as the initial projection in May. Harvested area was forecast at 74.6 million acres, down 1% from 75.3 million acres forecast previously but up 1% from 73.6 million acres in 2011 and still the fourth largest on record if realized. Mr. Meyers said the soybean crop has about an equal chance of getting larger or smaller depending on weather over the next few weeks, although it still will be much smaller than ﬁrst projected. Carryover of U.S. soybeans on Sept. 1, 2012, was projected at 115 million bus, down 15 million bus, or 12%, from 130 million bus in July and down 30 million bus, or 21%, from a downwardly revised 145 million bus estimated for this year. The U.S.D.A. 2013 soybean carryover number was as expected by the trade. Total supply in 2012-13 was projected at 2,857 million bus, down 378 million bus, or 12%, from 3,235 million bus in July and down 429 million bus, or 13%, from 3,286 million bus in 2011-12. Total use of soybeans in 2012-13 was projected at 2,742 million bus, down 363 million bus, or 12%, from 3,105

million bus in July and down 399 million bus, or 13%, from 3,141 million bus in 2011-12. Crushings were projected at 1,515 million bus, down 95 million bus from July and down 175 million bus from 1,690 million bus in 2011-12. Exports were projected at 1,110 million bus, down 260 million bus, or 19%, from 1,370 million bus in July and down 240 million bus, or 18%, from an upwardly revised 1,350 million bus in 2011-12. The average farm price of soybeans in 2012-13 was projected to range from $15@17 a bu, up $2 from July and compared with $12.45 in 2011-12. Mr. Meyers said he expects soybean futures prices to range from $16.25@16.75 a bu through December, with soybean meal in the $495@510 a ton range and soybean oil around 53@55½c a lb. Prices should get some relief from a projected 30% larger South American soybean crop, harvest of which begins in the ﬁrst half of 2013. He expects U.S. soybean futures to trade from $15½@16 a bu in the ﬁrst quarter of 2013 and $14@14½ a bu in the second quarter. “South America can respond” to the high prices, Mr. Meyers said. Soybean and soy product users tend to beneﬁt more from Southern Hemisphere soybean production than do corn users, who may see some help as well, he said. But U.S. corn supplies “will remain tight until this time next year,” he added. MBN
— Ron Sterk

Wheat combines race against drought, and win
KANSAS CITY — Wheat stood out as the outstanding survivor of the great American drought of 2012. While early hopes for a record corn crop evaporated under the searing summer sun, a record early start to the wheat harvest pit producers and combines against a rapidly expanding drought in a race against the clock. The combines won. By the end of July, the winter wheat harvest was completed except in Montana and the Paciﬁc Northwest, and the spring wheat harvest was more than two-thirds completed by mid-August. The drought was only just extending into the northern Plains when a large percentage of the region’s spring wheat crop already was entering marketing channels or stored safely in the bin. Remarkably, spring wheat crop condition ratings improved just as the harvest was getting under way.
bakingbusiness.com / world-grain.com

In a season of contrasts, the U.S. Department of Agriculture in its World Agricultural Supply and Demand Estimates report issued on Aug. 10 lowered its forecasts for corn production and average corn yield to 10,779 million bus

and 123.4 bus per acre, respectively, but raised its forecasts for wheat production and average wheat yield to 2,268 million bus and 46.5 bus per acre. The average corn yield was forecast to be the lowest since 1995. The average wheat yield was

$1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0 -$0.20 -$0.40 -$0.60 Aug. 2011

Wheat/corn spread

Oct.

Dec.

Feb. 2012

April



Grain Market Roundtable

June

Aug.

Milling & Baking News August 21, 2012 / 23

http://www.bakingbusiness.com http://www.world-grain.com

Milling & Baking News - August 21, 2012

Table of Contents for the Digital Edition of Milling & Baking News - August 21, 2012