"The changes in world production forecast and the related
changes in forecasts of year-ending stocks do not alter the
fundamental picture significantly but do reflect a marginally
more abundant supply situation," said Darrel Good. "The markets
will continue to monitor the rate of U.S. exports and exports
sales and anticipate the Jan. 12 reports of Dec. 1 grain stocks,
2006 winter wheat seedings and final 2006 U.S. production
"Following the sharp increase in prices since
mid-September, some consolidation would not be surprising over
the next four weeks. The major issue will continue to be U.S.
producer planting intentions for 2007."
Good's comments came as he reviewed the USDA's December
report of World Agricultural Supply and Demand Estimates, which
contained only a few changes for the balance sheet for U.S.
crops. However, forecasts of South American corn, soybean and
wheat production exceeded the November forecasts.
For the 2006-07 U.S. wheat marketing year, the USDA increased
the forecast of domestic food use by 5 million bushels, reduced
the forecast of exports by 25 million bushels, increased the
forecast of year-ending stocks by 20 million bushels and reduced
the midpoint of the forecast of the marketing year average price
by 5 cents.
"At 900 million bushels, U.S. wheat exports are expected to
be 109 million less than exported last year, at the lowest level
since 2002-03 and at the second-lowest level since 1971-72,"
As of Dec. 7, 27 weeks into the marketing year, cumulative
U.S. wheat export inspections totaled 441 million bushels, 102
million less than the total of a year ago. Unshipped export
sales as of Nov. 30 totaled 162 million bushels, compared with
184 million bushels on the same date last year.
"The year-over-year decline in exports is distributed among
most major buyers, with only Egypt buying more U.S. wheat than
at this time last year," said Good. "By class, the largest
decline is for hard red winter wheat, while sales of soft red
winter wheat are larger than those of a year ago."
For feed grains, the USDA made no changes in the 2006-07
marketing year projection of consumption of U.S. corn but
increased the midpoint of the projection of the marketing year
average farm price by 10 cents, to $3.10.
Similarly, no changes were made in sorghum consumption
forecasts, but the average price forecast was also increased by
10 cents. The projection of barley exports was increased by 5
million bushels, and no changes were made in the oats balance
[to top of second column]
For soybeans, the balance sheet projections were unchanged from
November, but the midpoint of the projection of the marketing year
average farm price was increased by 20 cents, to $6.10. For soybean
oil, the estimate of stocks at the beginning of the 2006-07
marketing year (Oct. 1) was increased by 48 million pounds, to 3.019
"The forecast of soybean oil production was increased by 90
million pounds, to a total of 20.205 billion pounds, reflecting a
slightly larger oil yield expectation," said Good. "The projection
of marketing year oil exports was increased by 100 million pounds,
and the projection of year-ending stocks was increased by 41 million
"The marketing year average price is projected in a range of 26
cents to 29 cents per pound, compared to the November price
projection of 24 cents to 28 cents. The only changes in the soybean
meal balance sheet were a 6,000-ton reduction in the estimate of
stocks on Oct. 1, 2006, and an equal increase in the projection of
meal production for the current marketing year."
More significant changes were registered for production prospects
outside the United States, particularly for Argentina.
"The current Argentine wheat crop is now forecast at 522 million
bushels, 35 million larger than the November forecast and 16 million
larger than last year's crop," Good said. "The projection of
Argentine wheat exports was increased by 37 million bushels. The
Argentine corn crop is forecast at 748 million bushels, 59 million
larger than the November forecast and 126 million larger than the
"Finally, the 2007 Argentine soybean crop is forecast at 1.543
billion bushels, 26 million larger than the November forecast and 55
million larger than the 2006 crop."
Other significant changes included a 37-million-bushel increase
in the estimated size of the Canadian wheat crop and a
39-million-bushel increase in the projected size of the 2007
Brazilian corn crop.
"The projections of world stocks were increased for wheat, coarse
grains and oilseeds," Good said.
of Illinois College of Agricultural, Consumer and Environmental
Sciences news release]