KSU U.S. Grain Sorghum and World Coarse Grain Market Outlook

An analysis of U.S. grain sorghum and World coarse grain supply-demand factors and 2013 price prospects following the USDA’s November 8th 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  available on the KSU AgManager website – to be found at http://www.agmanager.info/marketing/outlook/newletters/Sorghum.asp



On November 8, 2013 the USDA released its monthly Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.  Several changes were made in “old crop” 2012/13 marketing year U.S. grain sorghum supply-demand balances – leading to small changes in “old crop” 2012/13 ending stocks and in % ending stocks-to-use.  These changes in turn led to larger beginning stocks of grain sorghum for the “new crop” 2013/14 marketing year.  Combined with an increase in projected 2013 U.S. grain sorghum production, moderate increases were projected in “new crop” 2013/14 total supplies, total use, ending stocks, and % ending stocks-to-use.  Upward adjustments were made by the USDA in projected 2013 U.S. grain sorghum planted and harvested acres, which more than offset a decrease in projected U.S. grain sorghum 2013 yields – leading to an increase in projected 2013 U.S. grain sorghum production.  Domestic U.S. grain sorghum prices are projected at $4.20 for “new crop” MY 2013/14, the lowest level in 3 marketing years.


Article: “Grain Sorghum Ready for a California Comeback” (Source: http://westernfarmpress.com/)

USDA Grain Sorghum Market Forecast: The USDA projected that 2013 U.S. grain sorghum production would be 416 million bushels (mb) – up 20 mb – and up from 247 mb in 2012.  This forecast was based on higher projected U.S. planted and harvested acreage of 8.068 and 6.678 million acres (ma), respectively, and U.S. grain sorghum yields of 62.2 bu/ac –  down 2.9 bu from September.  The USDA raised its forecast of “new crop” MY 2013/14 total supplies (431 mb – up 12 mb), exports (180 mb – up 20 mb), and total use (400 mb – up 20 mb), leading to projected ending stocks of 31 mb – up from 15 mb last year.  Projected % ending stocks-to-use of 7.75% are up from 7.63% in September, and up from 5.68% for “old crop” MY 2012/13.  The USDA projected U.S. average grain sorghum prices for “new crop” MY 2013/14 of $3.80-$4.60 bu/ac (midpoint = $4.20), which is down 33.6% from the record high of $6.33 in “old crop” MY 2012/13.

KSU Grain Sorghum Market Forecast: KSU projections of 2013 U.S. grain sorghum production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Low Yield-Production” Scenario: 15% prob. of a 387 mb U.S. sorghum crop, 6.6% S/U, and prices of $3.95-$4.95 /bu;  b) “Likely” Scenario: 70% prob. a 416 mb U.S. grain sorghum crop (same as the USDA), 7.8% S/U, and prices of $3.45-$4.45 /bu; and c) “High Yield-Production” Scenario: 15% prob. of a 445 mb U.S. grain sorghum crop, 9.6% S/U, and prices of $3.20-$4.20 /bu.


Kansas Grain Sorghum Field – 2011 (Source: http://www.kssorghum.com/2012/02/top-grain-sorghum-producing-counties-in-kansas/)

World Coarse Grains: Forecast global coarse grain total supplies of 1,416.9 mmt in “new crop” MY 2013/14 are up from 1,296.3 mmt in “old crop” MY 2012/13, and 1,317.4 mmt in MY 2011/12.  Projected World coarse grain ending stocks of 197.6 mmt (16.2% S/U) in “new crop” MY 2013/14 are up 14.2 mmt from September, and up from 164.6 mmt (14.5% S/U) in “old crop” MY 2012/13, and 165.2 mmt (14.3% S/U) in MY 2011/12.


Millet and Sorghum Project in Africa (Source: http://www.fidafrique.net/rubrique752.html)

Market Perspective: Price prospects for U.S. grain sorghum are still driven largely by expectations in the U.S. corn market for “new crop” MY 2013/14, where record high U.S. corn production and ending stocks are nearly certain, along with a sizable reduction in U.S. corn and grain sorghum prices from “old crop” MY 2012/13.  With the cancellation of the October 2013 USDA reports, there is more uncertainty and potential for market impact than usual from upcoming monthly USDA Crop Production and WASDE reports.  On Dec. 10th the market will likely focus on any WASDE report changes to the U.S. grain sorghum and corn supply-demand balance sheet.  On Jan. 10, 2014 the USDA will release its 2013 Annual Crop Production Summary. If the USDA makes any marked changes in its projections of the size of the U.S. 2013 corn and/or sorghum crops, then there could be significant movement in U.S. grain sorghum prices in January-February 2014.


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