WASDE points to lower prices

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USDA's July World Agricultural Supply & Demand Estimates (WASDE) report kept the projected 2014 U.S. corn yield unchanged from last month at a record 165.3 bushel/acre. A 500,000-acre reduction in U.S. harvested corn acres puts the projected size of the 2014 U.S. corn crop at 13.860 billion bushels, which is 75 million bushels smaller than last year's record crop.

Ending stocks for the 2014/2015 crop year increased by 75 million bushels, as a decrease in the crop size was offset by reductions in Feed and Residual usage. U.S. corn ending stocks are projected to be 1.801 billion bushels, which equates to a stock-to-usage ratio of 13.5%. World corn carryover from the 2013/2014 crop year was increased by 4.37 million metric tons (mmt) to 173.42 (mmt). Global corn production was lowered slightly to 980.96 mmt. Overall, world corn ending stocks increased from 182.65 mmt to 188.05 mmt.

The projected range for the 2014/15 season-average corn price (paid at the farm level) was lowered 20¢ on each end, to $3.65 to $4.35 per bushel.

U.S. soybean yield was left unchanged at a record 45.2 bushel/acre. The 3.6 million acre increase in harvested acres from last month increases U.S. soybean production to 3.8 billion bushels from 3.635 billion bushels last month. 2013/2014 soybean ending stocks increased by 15 million bushels to 140 million bushels as a 45 million bushel increase in crush and export demand was offset by a 69 million bushel negative residual number (this negative residual number will be accounted for on a future report). For the 2014/2015 crop year, soybean demand was increased in the crush and export categories by 90 million bushels, but an increase in carryover and the projected crop size netted a 90 million bushel increase in 2014/2015 ending stocks to 415 million bushels (largest since 2006). The projected soybean stocks-to-usage ratio is at 11.7%. On the world front, soybean production was increased by 4.8 mmt to 304.79 mmt. Slight increases in global demand mean ending stocks increased by 2.43 mmt to 85.31 mmt.

Prices for soybeans and products for 2014/15 are all reduced. The U.S. season-average soybean price was projected at $9.50 to $11.50 per bushel, down 25¢ on both ends of the range. Soybean meal prices are projected at $350 to $390 per short ton, down $5 on both ends.

Source: Matt Mattke, Commodity Consultant Team Lead for Stewart-Peterson. Matt can be reached at mmattke@stewart-peterson.com



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