This morning the USDA updated both US and World 2008/09 balance sheet estimates for major agricultural commodities in the World Agricultural Supply and Demand Estimates (WASDE) report. This morning's report continues the bullish theme from last month's as ending stocks are again lowered.

The USDA lowered their estimate for U.S. corn ending stocks for 2008/09 by 40 million bushels as higher expected feed and residual use more than offsets a reduction in food, seed, and industrial use. Feed and residual use is raised 50 million bushels as March 1 stocks indicated higher-than-expected disappearance during the December-February quarter. The USDA again raised their 2008/09 season-average farm price for corn to $4.00 to $4.40 per bushel from $3.90 to $4.30 last month. World corn production is lowered 0.7 million tons with 0.5-million-ton reductions for Ethiopia, Chile, and Vietnam, and a 0.4-million-ton reduction for Iran. Partly offsetting is higher projected production for Brazil.

U.S. soybean ending stocks are reduced 20 million bushels to a projected 165 million, the lowest since 2003/04 .U.S. soybean exports for 2008/09 are increased 25 million bushels to a record 1.21 billion reflecting strong year-to-date shipments and outstanding sales, and prospects for reduced export competition from South America as the Argentina soybean crop continues to deteriorate.

The report noted that "Despite rain in much of the main growing area in early March, hot, dry conditions returned in most of the country, leaving yield prospects below last month."

Click on the link for the full WASDE report: http://www.usda.gov/oce/commodity/wasde/.

- Colvin