Source: MEATINGPLACE, 12/9/11

USDA lowered its average farm price projection for corn in the 2011/12 marketing season, which began Sep. 1, by 30 cents per bushel to a range of $5.90 to $6.90.

In its monthly World Agricultural Supply and Demand Estimates report, USDA also lowered its soybean price projection by 90 cents to a range of $10.70 to 12.70 per bushel and lowered the projected soybean meal price by 30 dollars to a range of $280 to $310 per short ton.

The report reduced the U.S. corn food, seed and industrial use estimate by 5 million bushels, which boosted projected corn ending stocks by the same amount to 848 million bushels. The agency lowered its soybean crush forecast by 25 million bushels and lowered exports by 10 million bushels, thus increasing ending stocks by 35 million bushels to 230 million bushels. Both ending stocks forecasts came in above what market analysts were expecting.

Global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a 3.5-million-ton decline year-to-year in the United States. Foreign corn production is expected to be up 43.4 million tons from 2010/11. China 2011/12 production is raised 7.3 million tons this month based on the recently released estimate from China’s National Bureau of Statistics.

Global corn imports are lowered 0.5 million tons for EU-27. Global corn ending stocks are projected 5.6 million tons higher, mostly on increased stocks in China. At the projected 127.2 million tons, world ending corn stocks remain at a 5-year low.

Soybean exports are reduced 25 million bushels to 1.3 billion reflecting the slow pace of shipments and outstanding sales through November, and strong export competition from South America.

The report was called bearish for both corn and soybean prices by Deutsche Bank analyst Christina McGlone. Corn futures were trading down about 7 cents to 9 cents per bushel and soybean futures were down about 23 cents per bushel for nearby delivery months in morning trade on the Chicago Board of Trade.
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