Low corn and wheat supplies
World Supplies of starches are down, oilseed up. Dating back to 1993-1994 marketing year, the projected world days supply of corn and wheat are at historic lows while soybeans are at historic highs. The days supply is calculated by drawing out world usage from world supply, resulting in projected end stocks and finally dividing by the days usage value.
As you see first hand, both wheat and corn days of supply have been on a rather steep decline. Since its 1998-99 peak of 83 days, corn has regressed 65% while wheat has regressed 40%. At 37 days corn supply compares to year earlier levels of 50 days or 26% less. At no time dating back to 1993-94 has corn dropped as much as this most recent marketing year of 13 days. It will be extremely important as the worlds single largest corn producing country, to have near ideal weather to help correct the decline in days of supply. However, as we previously stated, even with prospects of 90.45 million acres of corn planted in 2007, demand is expected to out strip supply within the US and Allendale 2007-08 end stock projections are expected to be smaller, than present levels.
The starch cousin wheat is of little help to provide a cushion in the form of providing a back up for feed. Only a 52 day supply of world wheat, a historic low dating back to the 1993-94 marketing year and well off the peak level of 86 days in the 1998-99 for a 40% regression. 52 days projected vs last years 61 day supply for a 15% regression. At least if world wheat days of supply could correct higher it could take pressure off of the corn market. However with weather problems in the US, Australia, France, Germany, Canadian Prairies, and now Hungary as announced on Friday, challenges lie ahead.
For soybeans, world days of supply have never been greater than they are at 63 vs 60 days last year and the 50 days in 2003-04. Amazing to see how days supply were very consistent from 1997-98, all the way through 2001-02 at 47-48 days. At 63 days, supply soybeans are well off its historic low of 31 days in 1996-97 or 103% higher.
Planting Progress: On Monday, USDA's National Ag Statistics Service will use 22% as the five year ave for the fourth full week of April corn planting progress. This recent Monday corn plantings were estimated at 4% complete vs 9% five year ave. The most asked question on Thursday is with a window of opportunity opening at least for the second half of this week, could we reach 22% by next Monday? Using the 15th week (this week) of the year as the standard, it is important to know in 2004 we picked up 16% for the week, in 2005 15% and in 2006 15%. The record amount was 16% gained in 2004. Then you ask but what was the weather like during that particular week? In 2004, that particular week had rain accumulation of 1-2 inches west to east. In 2005 with a 15% gain we had half an inch to 1 inch for the major Midwest and in 2006 with its 15% gain, the west was generally void of any rain but the east received 1 to 4 inches. Last Monday at 4%, add a record level of 16% and it may suggest the very best we could see by next Monday could reach 20%, or 2% behind the five year average.