Corn and soybean stocks increase around the world

By ANDREA JOHNSON, Assistant Editor
Thursday, April 26, 2007 6:24 PM CDT

With good weather found in many parts of the world, supplies of corn and soybeans have increased. World supplies of wheat have decreased in recent months.

At the end of the 2007 harvest, Brazil will harvest fewer acres of soybeans than a year ago, but will bring in a larger crop.

Brazil's harvested acreage is down 6 percent from a year ago, but the average yield of 41.65 bushels/acre is up 9 percent from a year ago.

Many regions of Brazil experienced good soybean growing conditions this year. Higher yields were expected in Mato Grasso, Parana and Rio Grande do Sul, according to USDA's World Agricultural Production report, released April 10.

“Harvest progress has been swift due to earlier than normal plantings, greater use of short season varieties and good weather,” said the report.

USDA estimates Brazil's crop at 58.8 million metric tons or 2.16 billion bushels. Brazil's corn crop is forecast at 49.5 million metric tons or 1.95 billion bushels.

Argentina's soybean crop is not much smaller, at 45.5 million metric tons or 1.67 billion bushels. The average soybean yield is 42.8 bushels/acre.

Argentina is also harvesting a record corn crop at 22 million metric tons, or 866 million bushels. The average corn yield is 7.72 tons/hectare or 123 bushels/acre.

Together, Brazil and Argentina will produce a 3.83 billion bushel soybean crop in 2007 vs. 3.18 billion bushels produced in the United States in 2006.

John Markus, of Lakefront Futures and Options, Chicago, said that most market analysts expected South America's soybean yields to increase.

“Those numbers are not much of a surprise based on the weather and production in Brazil,” said Markus.

China is also expected to raise good crops this year.

USDA forecasts China's corn production at 143 million metric tons, or 5.629 billion bushels. The wheat crop is projected at 103.5 million metric tons or 3.8 billion bushels.

Unfortunately, drought continues to hurt corn production in South Africa. Production is forecast at just 6 million metric tons or 236 million bushels.

The South Africa 2007 yield per acre is forecast at 2.14 tons/hectare or 34 bushels/acre. The five-year average yield in South Africa is 3.1 tons/hectare or 49 bushels/acre.

Thailand will produce about 3.8 million metric tons of corn, or 150 million bushels. Yields have increased due to greater availability of seed corn and favorable weather. Good farm prices have encouraged farmers to try to maximize yields.

Thailand was expected to harvest a 3.8 ton/hectare corn crop or 61 bushels/acre average yield.

Ethiopia has record corn production at 5 million metric tons or 197 million bushels. Wheat production was also very good at 3.7 million metric tons or 135.9 million bushels. Favorable weather and well-distributed rain fell on the main production areas as well as marginal regions.

Ethiopia has better access to fertilizers, seed and financing this year, said USDA's report.

Canada is forecast to raise 27.3 million metric tons (1 billion bushels) of wheat, while the European Union is expected to raise 117.1 million metric tons (4.3 billion bushels) of wheat.

In their April report, USDA pegged 2006/2007 world ending-stocks of wheat at 121.2 million metric tons, or 4.45 billion bushels.

The global carryout figure in wheat was down from the 121.23 million metric tons number published in March. The ending stocks are also projected down 26.68 million metric tons - or 980 million bushels - from the 2006 ending stocks numbers.

Markus said that traders thought the world carryout for wheat would be slightly higher. The lower carryout was viewed as bullish for wheat.

The April USDA report estimated world 2006/2007 ending stocks of corn at 91.82 million metric tons, or 3.6 billion bushels.

The global marketing year begins on Oct. 1 and ends on September 31 of the next year.

“We were looking for 87.79 million metric tons, so corn came in at the high end,” said Markus.

The soybean carryout also increased in size from the March report. Traders had expected the carryout number would come in at about 57.5 million metric tons. Instead, USDA said that world carryout supplies of soybeans were estimated at 61.02 million metric tons, or 2.24 billion bushels for.

While supplies of soybeans and corn remain generous around the world, the market continues to focus on the U.S. growing season.

Markus encourages crop farmers and livestock producers to pay attention to the market and make grain sales or purchase feedstuffs when prices are attractive.

“If you can get your corn sold at $4 or get your spring wheat sold in the $5.10-$5.15 area, it's probably not a bad place to start,” said Markus. “(For the livestock producer) the best idea, as far as I am concerned, is keep an eye on the market.”

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