- Special Report by Mark Welch -
Editor’s Note: Mark Welch, Texas AgriLife Extension Economist, is based in College Station, Texas. The opinions and recommendations expressed are solely those of the author and are intended for educational purposes only as part of the Texas AgriLife Extension Service. Texas AgriLife Extension Service assumes no liability for the use of this newsletter. This edition of Welch’s Feedgrain Market Outlook was released on Sept. 16, 2011.
This week’s Crop Progress reported an improvement in the condition of the U.S. corn crop for the first time in over a month. The crop condition index rose to 337, up three points from last week’s 334. USDA revised its 2011 yield estimate in Monday’s WASDE, lowering the yield from 153 in August to 148.1.
However, even with lower production than the trade expected, estimated ending stocks were above trade guesses. USDA cut corn use in every category but food: Feed, -200 million; ethanol, -100 million; exports, -100 million. Ending stocks were reduced by 42 million bushels to 672 million, but the trade was ready for a number closer to 636 million. The stocks to use ratio now stands at 5.3 percent, down from 5.4 percent in August.
World Ending Stocks
The Bureau of Labor Statistics released August inflation numbers on Thursday. Prices for all items are up another 3.8 percent from a year ago. The increase for core inflation, all items less food and energy, was up two percent.
China’s central bank has taken efforts to curb inflation over the last several months with some success shown in August. The inflation rate for all items in China slowed from 6.5 percent to 6.2 percent. Food inflation is still running at 13.4 percent. Efforts to trim inflation by slowing the rate of growth in the Chinese economy threatens to lessen demand for U.S. exports.