Chad Hart calls USDA crop report 'the January Surprise'
By Jean Caspers-Simmet
Agri News
Date Modified: 01/29/2010 4:06 PM
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MASON CITY, Iowa —Iowa State University Extension grain marketing specialist Chad Hart called USDA's Jan. 12 crop production summary for 2009, "the January Surprise."
"If the market was looking for bearish information, the reports provided it," Hart said at last week's Crop Advantage Conference at North Iowa Area Community College in Mason City.
For corn, national average yields are projected at 165.2 bushels per acre, up 2.3 bushels from last month's record estimate, Hart said. Corn production is projected at 13.15 billion bushels, up 230 million bushels. With this revision, the 2009 crop becomes the largest corn crop the U.S. has ever produced, exceeding the 2007 crop by 113 million bushels.
For soybeans, national average yields are projected at 44 bushels per acre, up 0.7 bushels from last month, Hart said. Soybean production is projected at a record 3.36 billion bushels. So both the corn and soybean yield and production records fell in 2009.
The stocks report showed corn stocks are up 9 percent from last year, at 10.9 billion bushels, Hart said. The stock situation was helped by larger corn disappearance over the first three months of the marketing year as 3.89 billion bushels of corn were used, versus 3.64 billion bushels last year. But the record size of this year's crop more than offset the strong disappearance numbers and stocks increased.
A similar story holds for soybeans, Hart said. Soybean stocks are up 3 percent from last year even though disappearance from September to November was 30 percent higher than last year.
On the demand side, soybean demand continues to build, Hart said. Soybean exports were raised again, another 35 million bushels to 1.375 billion, based on continued Chinese demand. But some other soybean markets, such as Taiwan, Egypt, and Canada, have grown year over year as well. Soybean crush is projected at 1.71 billion bushels, up 15 million on the strength of soybean meal exports. The demand growth is greater than the production update, so soybean ending stocks for the 2009 to 2010 marketing year are projected at 245 million bushels, down 10 million.
With the boost in soybean exports and crush and the reduction in ending stocks, USDA raised the midpoint of its season-average price range to $9.65 per bushel, up 15 cents from last month.
For corn, feed and residual demand was raised to 5.55 billion bushels, based on the stock disappearance numbers, Hart said. Ethanol demand held at 4.2 billion bushels, but food and seed demand was lowered 10 million bushels as shipments of high fructose corn syrup were off. Corn exports held steady at 2.05 billion bushels. The record crop pushed projected 2009 to 2010 corn ending stocks to 1.764 billion bushels, up 89 million. The midpoint of USDA's corn season-average price range was raised to $3.70 per bushel, up 15 cents.
Hart said that because there were so many unharvested corn and soybeans when USDA surveyed producers in late November for the Jan. 12 report, it will resurvey producers who previously reported acreage not yet harvested. If the newly collected data justifies any changes, USDA will update the Jan. 12 estimates in the March 10 report.
Hart said that the outlook for 2010 has improved with reductions in key input costs. Preliminary estimates for 2010 costs show nearly a dollar per bushel reduction in costs for both corn and soybeans.
"Returns to both crops look to be better in 2010 than they were for 2009," Hart said.