No surprises in the USDA grains and oilseeds outlook.Planted Area 2010:A wet fall combined with lower prices and demand will reduce winter wheat seeded areas as follows: HRW -3.2 M acres to 27.8 Ma; SRW -2.4 Ma to 5.9 Ma. Spring wheat is expected to increase slightly. Overall, 2010 wheat plantings will be the lowest since 1913.As reported yesterday, corn plantings will increase to 89 Ma from 86.5 last season. Main factors for the increase will be a higher return per acre due to lower fertilizer cost and higher demand for 2010-11.Soybeans will decline 500K acres to 77. Reasons are lower return per acre this season in comparison with corn, large South American crop, lower demand (exports), and lower double crop soybeans area lost slightly to cotton and corn.USDA estimates that out of the 2.5 million acres that expired from the CRP program in 200c, les than 1/2 will be planted.Production:Wheat production will decrease 12% to 1.945 MB due to lower area and yields. National yield average is projected at 42.6 bpa, 0.9 lower due to expectations of yields coming back to trend.Corn production will decrease 60 million bushels to 14.894 million bushels in 2010. Higher planted area will be offset by lower yields, which are expected to decrease to the trend at 160.9 vs the 165.2 estimated for 2009-10.Soybean production will register a decrease of 100 MB to 3.260 MB due to smaller area and yields. Yields are expected to drop to trend 42.9 bpa vs the 44 reported for last season.Demand and ending stocks:US consumption of wheat will increase 60 Mb and exports will increase 25 million bushels. This will result in ending stocks falling 40 million bushels to 940 mb. Stocks to use ratio will decrease to 44.8% form 48.9%. Average farm price will be $4.90Corn stocks will decrease 65 Mb to 1.654 bil bushels. This is the result of lower production, higher exports (up 100mb), higher demand from ethanol (up 200 mb) vs lower feed (down 200 mb). Stock to use ratio will decrease to 12.5% and avg farm price wil be $3.60.Soybean crush will decrease 65 mb to 1.655 bb due to lower soy meal exports based on SA competition. Soy exports are to decline 75 mb to 1.325 bb. Ending stocks will increase to 330 mb and avg farm price will drop to $8.80.Soy meal demand is expected to fall domestically due to lower livestock consumption in the US and lower exports. Avg price is expected to fall to $260 per short ton in 2010. Stocks will increase.Soy oil demand will increase in 2010. A trend from manufacturers to substitute bean oil to other veggie oils is expected, partly offsetting the increase in demand from biodiesel. Soy oil stocks will fall.Remarks:Focus this year is more towards sustainability, technology, and social aspects of rural America than biofuels, commodity prices, speculation, and supply/demand. The USDA did not give estimates regarding South America, only that world grain and oilseed stocks will increase as a result.USDA did not answer questions regarding of the impact in demand if Biodiesel tax credit is not passed by Congress or if US ethanol blend is increased from 10% to 12% or more.
Futures