An analysis of U.S. grain sorghum and World coarse grain supply-demand factors and 2013 price prospects following the USDA’s July 11th World Agricultural Supply Demand Estimates (WASDE) report can be found on the KSU AgManager website (http://www.agmanager.info/default.asp).
Following is a summary of the article on U.S. Grain Sorghum and World Coarse Grain Market Outlook – with the full analysis-article to be available on the KSU AgManager website – to be found at http://www.agmanager.info/marketing/outlook/newletters/Corn.asp
On June 28, 2013 the USDA released its 2013 Acreage and June Quarterly Stocks reports, followed on July 11th by the release of the July Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports. Taken together, these reports were characterized by lower 2013 U.S. grain sorghum planted acres, higher U.S. grain sorghum projected harvested-to-planted acreage than a year ago, an increase in projected average 2013 U.S. sorghum yields, lower projected U.S. 2013 grain sorghum production, strength in “old crop”2012/13 marketing year food-seed-industrial usage being partially offset by lower projected export and feed and residual usage, a sharp reduction on projected “new crop” 2013/14 U.S. ending stocks of grain sorghum, and a marginal tightening of projected World coarse grain ending stocks for “new crop” MY 2013/14. Projected U.S. grain sorghum ending stocks and % ending stocks-to-use for both “old crop” MY 2012/13 and “new crop” MY 2013/14 tightened considerably.
USDA Grain Sorghum Market Forecast: The USDA projected that 2013 U.S. grain sorghum production would be 395 million bushels (mb) – down 30 mb – but up from 247 mb in 2012. This forecast was based on U.S. planted and harvested acreage of 7.2 and 6.1 million acres (ma), respectively, and U.S. grain sorghum yields of 64.9 bu/ac – up 0.5 bu from June and up from 49.8 bu/ac in 2012. The USDA lowered its forecast of “new crop” MY 2013/14 total supplies (410 mb – down 30 mb) and use (380 mb – down 10 mb), leading to new crop projected ending stocks of 30 mb – down 27 mb from June, but up from 15 mb last year. Projected % ending stocks-to-use of 7.9% are down sharply from 14.6% in June, but still up from 5.6% for “old crop” MY 2012/13. The USDA projected U.S. average grain sorghum prices for “new crop” MY 2013/14 of $4.00-$4.80 bu/ac, down significantly from $6.60-$7.00 in “old crop” MY 2012/13.
A Kansas Grain Sorghum Field Headed Out from Past Years (Source: http://www.kssorghum.com/2012)
KSU Grain Sorghum Market Forecast: KSU projections of 2013 U.S. grain production and “new crop” MY 2013/14 supply-demand and price scenarios are: a) “Low Yield-Production” Scenario: 30% prob. of 7.2 ma planted, 5.2 ma harvested, 50.0 bu/ac yields, a 287 mb U.S. sorghum crop, 7.7% S/U, and prices of $5.45-$6.45 /bu; b) “Likely Yield-Production” Scenario: 60% prob. of 7.2 ma planted, 6.1 ma harvested, 66.1 bu/ac yields, a 402 mb U.S. grain sorghum crop, 9.7% S/U, and prices of $4.75-$5.75 /bu; and c) “High Yield-Production” Scenario: 10% prob. of 7.2 ma planted, 6.1 ma harvested, 73.0 bu/ac yields, a 444 mb 2013 U.S. grain sorghum crop, 12.0% S/U, and prices of $4.10-$5.10 /bu.
World Coarse Grains: Forecast global coarse grain total supplies of 1,399.7 mmt in “new crop” MY 2013/14 are down 3.6 mmt from June, but up from 1,291.8 mmt in “old crop” MY 2012/13, and 1,320.5 mmt in MY 2011/12. Projected World coarse grain ending stocks of 182.2 mmt (15.1% S/U) in “new crop” MY 2013/14 are up from 152.2 mmt (13.3% S/U) in “old crop” MY 2012/13, and from 165.8 mmt (14.6% S/U) in MY 2011/12.
Foreign Coarse Grain Production (Source: http://en.mercopress.com/2011/)
Market Perspective: U.S. feedgrain crop and market prospects for the “new crop” 2013/14 marketing year remain uncertain – with earlier concerns about feedgrain crop development and adequate moisture the western half of the U.S. Corn Belt giving way to concerns about slow feedgrain crop development prospects in Iowa and other parts of the central U.S.. Questions remain concerning final 2013 U.S. corn and grain sorghum planted and harvested acreage, yield, and production levels – which are likely to be addressed in upcoming USDA Crop Production and WASDE reports. Extremely tight “old crop” 2012/13 feedgrain supplies in June-August will likely continue to provide strength in U.S. grain sorghum basis levels and cash markets through the summer months – before giving way to expected large supplies and lower prices as fall harvest approaches.