Market Watch

USDA released an update of its World Ag. Supply and Demand Estimates report March 10, but the update changed little in the corn and soybean outlook. Corn estimates were unchanged, with 2010/11 ending stocks projected at 675 million bushels and the midpoint of the season-average price range at $5.40 per bushel. Soybeans had a small adjustment to seed demand that was offset by a reduction in residual demand. So 2010/11 ending stocks remain at 140 million bushels, but the midpoint of the season-average price was lowered to $11.60 per bushel. Wheat 2010/11 ending stocks rose 25 million bushels, based on a reduced export outlook. This could open up more wheat in domestic feed channels to compete with corn. Looking at the world situation, corn production in 2010/11 was reduced by 0.5 million metric tons with the bigger shifts coming from Mexico (down 2 million tons) and Brazil (up 2 million tons). Corn exports to the European Union and Mexico for the 2010/11 crop year are projected to inc

With corn production down and corn consumption up, the market is poised to see record-high prices per bushel in the 2010-11 marketing year, according to a marketing and outlook brief prepared by University of Illinois agricultural economists Darrel Good and Scott Irwin. "We looked at the current situation in which we're expecting very tight year-ending stocks and developed three supply, consumption, and price scenarios for the 2011-12 marketing year," Good said. "The yield alternatives include a trend yield, an average yield resulting from good weather, and an average yield resulting from poor weather. We followed those scenarios through a balance sheet and into a price projection under each of those three scenarios, just to underscore how important crop size is to next year's average price." In one scenario, Good and Irwin calculated a trend yield based on actual U.S. yields since 1960 at 158 bushels for 2011. This was applied to an expected 92 million acr