NEWS for North Dakotans
Agriculture Communication, North Dakota State University
7 Morrill Hall, Fargo, ND 58105-5665

February 11, 1999

The Market Advisor: Exports Dominate USDA Supply and Demand Report

George Flaskerud, Extension Crops Economist
NDSU Extension Service

The pace of exports needed to boost wheat prices has not materialized. USDA responded by lowering the export projection for the current marketing year by 75 million bushels in the Supply and Demand Report released Feb. 10. USDA also increased the level of wheat imports by 5 million bushels. The net effect was to increase ending stocks by 80 million bushels to an amount that is 41 percent of total use, similar to the percentage in 1990-91, another low-price year. The projected range for the seasonal average farm price remained unchanged from last month, at $2.65 to $2.75.

USDA increased ending stocks of hard red winter wheat the most, up 55 million bushels (14 percent). Hard red spring ending stocks were increased by 22 million bushels (10 percent). Durum ending stocks were increased by 2 million bushels (3 percent). Ending stocks of soft red winter wheat were left unchanged while ending stocks were increased by 1 million bushels for white wheat (1 percent).

USDA raised the export projection for corn by 25 million bushels even though they added about 39 million bushels to the size of the Argentine crop. A small increase of 2 million bushels was projected for imports. The projected seasonal average farm price was left unchanged from last month, at $1.80 to $2.10.

The barley fundamentals did not change from last month, but USDA did change the projected seasonal average farm price, from $1.85 to $2.05 last month to $1.90 to $2.00 this month. Oats imports were increased by 5 million bushels, which translate into higher ending stocks. However, the seasonal average farm price was increased anyway, by 5 cents in the range to $1.10 to $1.20.

USDA dropped soybean exports from 830 million bushels to 810 million bushels, a decrease that was expected by the trade because of very favorable growing conditions in South America. Production in Argentina and Brazil was increased by about 55 million bushels. The seasonal average farm price was reduced by 10 to 20 cents, to $5.00 to $5.40.

Reductions in soybean meal and oil exports were largely offset by increases in domestic use. The seasonal average price projection remained about unchanged for meal but was reduced for oil from $25.00 to $27.00 per hundredweight a month ago to $23.50 to $25.00 this month because of weaker-than-expected prices to date.

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Source: George Flaskerud (701) 231-7377

Editor: Dean Hulse (701) 231-6136