China's Corn Supply Less Than Reported

China's domestic supply of corn appears to be quite a bit less than estimated, as local and regional farmers, apparently in an attempt to boost their status with the Chinese government appear to have overestimated the corn harvest in the country.

Both the Chinese government and the USDA said the country had produced a record crop of 191.8 million tons in 2011, but that appears to be anywhere from 6.8 million tons to 24 million tons less than the actual corn production numbers.

Domestic Chinese corn has already started to jump in price in response to government agencies and private producers bidding for the grain in the tighter-than-expected market.

Originally the USDA estimated China's corn imports at about 4 million tons, assuming the accuracy of the 191.8 million ton figure. That could, and probably will change significantly as the situation unfolds. Some estimate that corn production in China for 2011 may be as low as 168 million tons.

China has officially come out and said they have enough corn reserves and won't need to import a lot of corn for 2012, but that could be a negotiating ploy to keep corn prices somewhat stable as demand ramps up.

Even so, and with the drought pressuring corn supply in Brazil and Argentina, China can easily enough shift to importing wheat as a secondary choice if corn prices rise too high, waiting for an opportune time when the price pulls back. It'll be an interesting year for corn imports and exports around the world, including the United States.

Wisconsin Corn, Crop Prices for February 2012

Prices for corn and other Wisconsin crops were mixed for February, with month over month and year over year prices fluctuating.

For corn, the average price per bushel climbed to $5.97, a gain of 19 cents over January's price, and a jump of 38 cents over the price of a bushel in February 2011. However, it was less than the average price of corn per bushel in the U.S. for February, which came in at $6.16 as of the middle of the month.

The price of soybeans, on average, was at $12.50 per bushel in the middle of February, up 60 cents a bushel over January, but dropping 40 cents a bushel against the February 2011 price. It was higher than the overall U.S. soybean average of $12.30 a bushel as of the middle of February.

Oats in Wisconsin generated $3.59 a bushel, up 31 cents over January and 47 cents higher than the price in February 2011. That was a little less than the U.S. average of $3.66 a bushel for oats.

For alfalfa hay, the price as of the middle of February was $125.00 a ton, $25.00 over the price of February 2011, but about the same as January 2012.

Corn and Midwest Storms and Hurricanes

Damage to corn and other crops have yet be assessed from the destructive hurricanes and storms which ravage much of the midwest and parts of the south.

States and surrounding regions most affected by the storms are Kentucky, Illinois and Indiana.

Of particular interest will be the extent of damage to any stored grains or crops, as well as on the building and storage units themselves.

It'll probably take some time before we know if there is enough damage to have a significant impact on crop prices or exports.

Argentina, Brazil Corn Production May Exceed Estimates

Corn production estimates last month by the U.S. Department of Agriculture for Argentina and Brazil may have been understated, as a report from Informa Economics on March 2 said.

Drought in both countries resulted in the USDA projection a 22 million ton harvest in Argentina and a 61 million ton harvest in Brazil. According to Informa, those numbers could reach 22.5 million tons of corn harvested in Argentina and 61.5 million tons or corn harvested in Brazil for 2012.

Offsetting that data was the news South Korea’s Nonghyup Feed Inc., the largest buyer of feed grains in the country, acquired 126,000 metric tons of U.S. corn on March second, which is scheduled for July delivery.

That has helped push up the price of corn futures slightly in Monday trading.

Brazil Selling 700,000 MT Corn to Domestic Market

The government of Brazil announced Friday it was going to sell as much as 700,000 metric tons of corn stock in its domestic market in response to the draught that has hit the southern states of the nation.

States targeted via auctions are Santa Catarina and Rio Grande do Sul,
where a sell of up to 500,000 metric tons of corn will be initiated.

The Brazilian Agriculture Ministry said this: "The measures are a way for the government to supply the market's shortage of the product and help the sector, which faces difficulty due to the smaller crop caused by weather factors,"

Other states in Brazil targets from corn sales are Minas Gerais, Rio de Janeiro and Espirito Santo. Corn sales are focused on those looking to acquire feed for the various meat industries.

The other 200,00 metric tons of corn is slated to be sold directly to Rio Grande do Sul and Santa Catarina, which have been hit the hardest by the drought. There the fixed price will be $12.18 for each 60-kilogram bag of corn feed.

Included in the fixed price sale will be agricultural cooperatives, along with buyers of feed for meat producers.

Corn farmers in the U.S. could boost production by 15 percent over 2011 as a result of the drought in Brazil and in Argentina. Corn exports in the U.S. are expected to rise in response to the lower supply in the region.

Top Corn, Soybean Producing Counties in Illinois

According to data released by the U.S. Department of Agriculture, the top corn and soybean producing counties in America are located in Illinois.

Iowa of course remains the top corn and soybean producing state in the United States.

As for corn production, La Salle County was the leading producer, with 60.166 million bushels harvested in 2011. For soybeans, McLean County, in Illinois was the top producer with 14.374 million bushels harvested.

The two counties are the largest in Illinois, helping to boost corn and soybean production, but cooperative weather in the area for 2011 was also a big factor in the good harvest.

Other Illinois counties outperformed the two larger counties on average, with Woodford County have an average yield of 186.5 bushels of corn an acre against La Salle County’s 177.3 bushels an acre., and Knox County produced 61.2 bushels of soybeans an acre against McLean’s 55.4 bushel average.

Corn Exports Up 5 Percent

Corn exports are up 5 percent from last week, according to the most recent U.S. Export report from the USDA. They are also up 2 percent from the four-week average.

Corn exports rose to 818,100 MT over last week. Leading importers of U.S. corn were Japan (341,900 MT), Mexico (279,500 MT), South Korea (89,800 MT), Cuba (26,100 MT), Venezuela (22,000 MT), and Colombia (20,700 MT).

Corn futures opened down 2 cents as the market takes a breather after the February run up in prices.