U.S. wheat carryover unchanged, corn down

by Ron Sterk
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WASHINGTON — The U.S. Department of Agriculture today projected carryover of wheat on June 1, 2008, at 242 million bus, unchanged from its March projection but down 214 million bus, or 47%, from 456 million bus the previous year.

Projected carryover of corn on Sept. 1, 2008, was 1,283 million bus, down 155 million bus, or 11%, from March and down 21 million bus, or 2%, from 2007.

Carryover of U.S. soybeans on Sept. 1, 2008, was projected at 160 million bus, up 20 million bus, or 14%, from March but down 414 million bus, or 72%, from 2007.

The U.S.D.A. projected carryover for wheat was well below analysts’ average pre-report expectations of about 262 million bus as was the U.S.D.A. corn number that compared with expectations of 1,303 million bus. But the U.S.D.A. soybean carryover was slightly above average trade estimates of 157 million bus.

The U.S.D.A. projected the wheat ending stocks-to-use ratio for 2007-08 at 10%, unchanged from March and still the lowest since 1946-47.

"Feed and residual use is projected 50 million bus lower as the March 1 stocks indicated lower-than-expected use in the December-February quarter," the U.S.D.A. said. "Exports are projected 50 million bus higher as export sales and shipments remain strong with several major export competitors taxing or otherwise restricting shipments."

Projected wheat supply in 2007-08 was unchanged from March at 2,613 million bus. Domestic use of wheat in 2007-08 was projected at 1,096 million bus, down 50 million bus from March. Food use was projected at 950 million bus, unchanged from March and equal to record food use in 2000-01. Seed use of wheat was projected at 86 million bus, unchanged from February but up 5 million bus from previous year. Feed and residual use was projected at 60 million bus, down 50 million bus from March and down 65 million bus from 2006-07. Wheat exports were projected at 1,275 million bus, up 50 million bus from March, up 75 million bus from February and up 366 million bus, or 40%, from 2006-07. Projected average farm price of wheat in 2007-08 was narrowed 5c at each end of the range to a record $6.55@6.75 a bu compared with $4.26 in 2006-07 and $3.42 in 2005-06. The previous record price was $4.55 a bu in 1995-96.

The U.S.D.A. projected carryover of hard red winter wheat at 101 million bus, down 5 million bus from March as the result of a projected 10 million bus increase in exports for 2007-08, to 535 million bus, partially offset by a 5 million bus reduction in domestic use, to 491 million bus.

Carryover of soft red winter wheat was projected at 42 million bus, up 10 million bus from March. Projected exports were 225 million bus, up 25 million bus from March, while domestic use was projected at 210 million bus, down 35 million bus.

Hard red spring wheat carryover was projected at 58 million bus, down 5 million bus from March as a 10-million-bu increase in exports, to 310 million bus, was only partially offset by a 5-million-bu decrease in domestic use, to 235 million bus.

White wheat ending stocks were unchanged at 27 million bus as a 5-million-bu reduction in domestic use was offset by a 5-million-bu increase in exports. Durum ending stocks were unchanged at 14 million bus with no changes from March in domestic use or exports.

The 2007-08 reduced carryover for corn ending stocks came about as "increases in feed and residual use and exports more than offset a reduction in corn use for ethanol," the U.S.D.A. said. Total corn supply was unchanged from March at 14,393 million bus. Feed and residual use of corn for 2007-08 was projected at 6,150 million bus, up 200 million bus from March, while food, seed and industrial use was projected at 4,460 million bus, up 5 million bus. But projected use of corn for ethanol production was trimmed 100 million bus, to 3,100 million bus, still 983 million bus, or 46%, above last year. The average farm price of corn in 2007-08 was projected at $4.10@4.50 a bu, compared with $3.75@4.25 in March, $3.04 a bu in 2006-07 and $2 in 2005-06.

"Record use during the first six months of the 2007-08 marketing year, and prospects for smaller-than-expected production in 2008, are expected to support cash and futures prices near current record levels through the summer," the U.S.D.A. said.

Projected exports were increased from March for soybeans, soybean oil and meal.

"Despite record high soybean prices, exports have remained strong, especially to China, where imports from the United States are likely to exceed the 2004-05 record," the U.S.D.A. said.

Total 2007-08 soybean supply was projected at 3,169 million bus, up 4 million bus from March. U.S. soybean imports for 2007-08 were projected at 10 million bus, up 4 million bus from March. Crushings were projected at 1,840 million bus, up 5 million bus from March, seed use at 92 million bus, up 6 million bus, and exports at 1,075 million bus, up 50 million bus. Still, total soybean use for 2007-08 was projected at 3,009 million bus, down 16 million bus from March as the result of a 77 million bus decrease in the "residual" category. The average farm price of soybeans in 2007-08 was projected at $10@10.50 a bu, compared with $10@10.80 in March, $6.43 in 2006-07 and $5.66 in 2005-06.

The carryover of soybean oil on Oct. 1, 2008, was projected at 2,792 million lbs, down 45 million lbs from March and down 112 million lbs from 2007. Production of soybean oil for 2007-08 was projected at 21,250 million lbs, up 55 million lbs from March. Domestic use of soybean oil was projected at 18,700 million lbs, down 200 million lbs from March despite an increase of 150 million lbs for methyl ester (biodiesel) production, projected at 2,950 million lbs. Soybean oil exports were projected at 2,700 million lbs, up 300 million lbs from March and up 812 million lbs from a year ago. The average price of soybean oil was projected to range from 50@54c a lb, down 3c from March and compared with 31.02c in 2006-07 and 23.41c in 2005-06.

Projected carryover of soybean meal on Oct. 1, 2008, was unchanged from February at 300,000 tons as a 150,000-ton increase in production, to 43,934,000 tons, was offset by an equal increase in exports, to 8,850,000 tons. The average price was lowered to $315@335 a ton from $320@350 in March and compared with $205.44 in 2006-07 and $174.17 in 2005-06.

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