WASDE Report 6/10/10
Jun 10, 2010
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Early Opening Calls $.05 to $.10 higher Soybeans and Corn, Wheat up $.02.
WASDE Report 6/10/10
OILSEEDS: This month's U.S. oilseed supply and use projections for 2010/11 include a small reduction in beginning and ending stocks. Lower beginning stocks reflect higher crush projections for 2009/10. Soybean crush for 2009/10 is raised 5 million bushels to 1.74 billion reflecting an increase in projected soybean meal exports. Soybean meal exports are projected at record 11.5 million short tons, almost 2 million above the previous record set in 1997/98. Lower domestic soybean meal consumption partly offsets the increase in exports. Soybean ending stocks for 2009/10 are projected at 185 million bushels, down 5 million from last month. Ending stocks for 2010/11 are also reduced 5 million bushels to 360 million.
Soybean, meal, and oil price projections are unchanged this month. The U.S. season-average soybean price for 2010/11 is projected at $8.00 to $9.50 per bushel. Soybean meal and oil prices for 2010/11 are projected at $230 to $270 per short ton and 34 to 38 cents per pound, respectively.
Global oilseed production for 2010/11 is projected at 440.2 million tons, up 0.3 million from last month, mainly due to higher peanut production. China’s peanut production is raised 0.9 million tons to 14.8 million tons based on higher area and yield. EU-27 rapeseed production is reduced 0.5 million tons to 21 million mainly due to lower area resulting from flooding, especially in Poland, in May. Other changes include increased soybean production for Ukraine, and reduced soybean production for China based on lower area. Brazil's 2009/10 soybean production is increased 1 million tons to a record 69 million reflecting increased harvested area and record yields.
NOTE: Because spring planting is still underway in the Northern Hemisphere and remains several months away in the Southern Hemisphere, these projections are highly tentative. National Agricultural Statistics Service (NASS) forecasts are used for U.S. winter wheat area, yield, and production. For other U.S. crops, the March 31 NASS Prospective Plantings report is used for planted acreage. Methods used to project harvested acreage and yield are noted on each table.
WHEAT: U.S. wheat supplies for 2010/11 are increased slightly this month as higher production is mostly offset by lower carry in. Winter wheat production is forecast 24 million bushels higher mostly on higher Hard Red Winter wheat. Winter wheat yields were raised in the central and northern Plains and in the Pacific Northwest. Beginning stocks are projected 20 million bushels lower as strong exports of wheat, flour, and products during the final weeks of the old-crop marketing year boost 2009/10 exports 20 million bushels. Domestic use for 2010/11 is projected 10 million bushels higher as lower prices encourage more wheat feeding. Ending stocks for 2010/11 are projected 6 million bushels lower, but remain up year-to-year and the highest since 1987/88. The season-average farm price for all wheat is projected at $4.00 to $4.80 per bushel, down from $4.10 to $5.10 per bushel last month. Recent declines in futures prices and lower-than-expected protein levels in Hard Red Winter wheat have sharply reduced price prospects for many producers.
Global wheat supplies for 2010/11 are projected 4.1 million tons lower this month with reduced carry in and production. Lower beginning stocks mostly reflect reductions for EU-27, the United States, and Brazil as 2009/10 exports are raised for all three. Global production for 2010/11 is lowered 3.7 million tons with reductions for EU-27, Syria, Turkey, and Russia. EU-27 production is lowered 2.1 million tons reflecting crop damage from recent flooding and heavy rains in Eastern Europe and April and May dryness in northwest France and the United Kingdom. Production for Syria and Turkey are lowered 1.3 and 1.0 million tons, respectively, as widespread outbreaks of yellow rust have sharply reduced yield prospects in key growing areas of both countries.
Russia production is lowered 0.5 million tons as reports of higher-than-expected winter kill, particularly in the Volga Valley, reduce potential harvested area. Production is raised 0.5 million tons for Ukraine as recent rains have improved yield prospects.
Global wheat trade for 2010/11 is raised with world imports up 2.0 million tons. Import increases include Syria, Turkey, Afghanistan, and Bangladesh. Exports are raised for Kazakhstan, Australia, Ukraine, and India. World wheat consumption is nearly unchanged as a 1.0-million-ton increase in China wheat feeding is offset by the same size reduction for EU-27. Wheat consumption is also lowered for Iraq and Brazil, but raised for Afghanistan. Global ending stocks are projected 4.2 million tons lower at 193.9 million tons. Global ending stocks for 2010/11 are expected to be up 1.0 million tons from beginning stocks.
COARSE GRAINS: Projected U.S. feed grain production for 2010/11 is unchanged, but smaller carryin for corn, sorghum, and barley is expected to reduce domestic feed grain supplies. Corn food, seed, and industrial (FSI) use is projected 110 million bushels higher for 2010/11, mostly in line with higher projected corn use for ethanol, sweeteners, and starch for 2009/10. Higher use, combined with lower beginning stocks, drops projected 2010/11 corn ending stocks 245 million bushels to 1,573 million. The season-average farm price for corn is projected 10 cents higher on both ends of the range to $3.30 to $3.90 per bushel. Projected 2010/11 farm prices for the other feed grains are also raised.
U.S. corn use for 2009/10 is projected 135 million bushels higher as increased FSI use more than offsets a reduction in expected feed and residual use. Corn use for ethanol is raised 150 million bushels reflecting the continued record pace of ethanol production and usage through March based on the latest data from the Energy Information Administration (EIA). Higher ethanol production is also supported by record production of gasoline blends with ethanol as indicated by weekly data from EIA through May and forecasts for rising gasoline demand during the summer driving season. Corn use is raised 5 million bushels each for starch and glucose/dextrose as the gradual economic recovery spurs production of these products. Feed and residual use is lowered 25 million bushels with increased availability of distillers’ grains.
U.S. corn ending stocks for 2009/10 are projected 135 million bushels lower. At 1,603 million bushels, this year’s ending stocks would be down 70 million from 2008/09. The projected 2009/10 farm price for corn is lowered 5 cents on both ends of the range to $3.45 to $3.65 per bushel based on prices reported to date. Other 2009/10 feed grain changes include a 10-million-bushel increase in projected sorghum exports, a 3-million-bushel reduction in barley imports, and a 3-million-bushel increase in oats imports. The 2009/10 sorghum farm price is lowered in line with that for corn.
Global coarse grain supplies for 2010/11 are projected 5.3 million tons lower with the largest share of the decline resulting from lower expected corn carry in the United States. Global coarse grain production for 2010/11 is lowered 1.4 million tons as higher corn production is more than offset by reductions in barley, oats, rye, and mixed grains mostly reflecting reduced crop prospects in EU-27.
Flooding in Eastern Europe and dryness during April and May in France have reduced expected coarse grains yields in these regions. Global corn production is raised 0.7 million tons as a 1.5-million-ton increase for Ukraine, based on higher reported area, is only partly offset by reductions for Mexico and EU-27. Production is lowered 0.5 million tons for Mexico as dryness has persisted in eastern and central growing areas during May. EU-27 corn production is lowered 0.3 million tons as heavy May rains have delayed field work, reducing expected area and yields in Eastern Europe.
Major global corn production changes for 2009/10 this month include a 1.5-million-ton increase for Argentina, which is nearly offset by reductions for the Philippines and Brazil. Argentina production is raised on higher reported area. The Philippines production is lowered 0.8 million tons based on government reports that indicate lower harvested area and yields. Production for Brazil is lowered 0.5 million tons as the early end to central Brazil’s rainy season reduces second season corn yields.
Global corn trade is raised for both 2009/10 and 2010/11. Higher corn trade for 2009/10 reflects increased imports by China and Vietnam and higher exports by Argentina. Higher corn trade for 2010/11 is based on higher expected imports by Mexico, Vietnam, and the Philippines. Exports for 2010/11 are raised for Argentina and Ukraine. Global corn consumption is raised 4 million tons for 2010/11 mostly reflecting higher use in the United States. Corn feeding is also raised for Ukraine and Vietnam. With reduced carryin and increased consumption, global corn ending stocks are projected down 6.9 million tons. At 147.3 million tons, stocks are up 3.9 million tons from 2009/10, but just below those for 2008/09.
RICE: U.S. rice supplies in 2010/11 are lowered 3.0 million cwt as beginning stocks are reduced 2.0 million and imports lowered by 1.0 million. Two changes in the 2009/10 supply and use forecasts resulted in a change in 2010/11 beginning stocks. First, imports in 2009/10 are lowered by 1.0 million cwt due to a slower-than-expected pace based on U.S. Census Bureau data through March. And second, domestic and residual use for 2009/10 is raised by 1.0 million cwt based largely on weekly millings data through mid-May reported by the USA Rice Federation. Imports for 2010/11 are projected at 21.0 million cwt, down 1.0 million from last month based mostly on the downward adjustment for 2009/10. The U.S. 2010/11 rice production projection is unchanged at a record 244.0 million cwt.
Total use for 2010/11 is raised 3.0 million cwt to a record 248.0 million due to increases in both domestic and residual use and exports. Domestic and residual use is raised 1.0 million cwt to a record 139.0 million based in part on the increase made for 2009/10. Projected 2010/11 exports are raised 2.0 million cwt—all in long-grain rice—to 109.0 million. The upward revision is partly based on larger expected exports to Western Hemisphere markets. The rough rice export projection is raised to a record 45.0 million cwt, while combined milled and brown rice (on a rough-equivalent basis) is unchanged at 64.0 million cwt. Ending stocks for 2010/11 are projected at 45.4 million cwt, down 6 million or 12 percent from a month ago, but up 17 million or 60 percent from 2009/10.
The 2010/11 long-grain U.S. season-average farm price is projected at $9.75 to $10.75 per cwt, down 25 cents per cwt on each end of the range. The combined medium- and short-grain price is projected at $14.50 to $15.50 per cwt, unchanged from a month ago. The 2010/11 all rice price is projected at $10.95 to $11.95 per cwt, down 20 cents per cwt on each end of the range. Prices for both classes of rice are projected to be well below 2009/10 levels, mainly due to large domestic and global supplies and lower Asian prices.
Global 2010/11 rice supply and use is nearly unchanged from a month ago. Global production is projected at a record 459.4 million tons, down 0.3 million, primarily due to a decrease for Colombia. The global trade forecast is nearly unchanged from a month ago. Global consumption is projected at a record 452.8 million tons, down 0.6 million, due mostly to declines in Bangladesh, Colombia, and the Philippines. Ending stocks for 2010/11 are projected at 96.3 million tons, down 0.4 million, but up 6.6 million or about 7 percent from 2009/10.
SUGAR: Projected U.S. sugar supply for fiscal year 2010/11 is decreased 80,000 short tons, raw value, from last month, due to lower beginning stocks. Sugar use is unchanged. For 2009/10, U.S. sugar imports under the re-export program are increased 50,000 tons while sugar use is increased 130,000 tons, all based on pace-to-date. Exports are increased 50,000 tons and domestic deliveries are increased 80,000 tons (55,000 for domestic use, 25,000 for re-export products). For Mexico, higher 2009/10 production more than offsets lower imports. This increase in supply is offset by higher domestic use.
LIVESTOCK, POULTRY, AND DAIRY: Forecast total U.S. meat production for 2010 is reduced slightly. The production forecasts for 2010 largely reflect lower cattle slaughter and lighter cattle carcass weights in the second quarter and lower expected slaughter in the fourth quarter. Hog slaughter is also reduced for the second and third quarters, but slightly heavier carcass weights partially offset the decline in second-quarter slaughter. Changes in the broiler and turkey production forecasts for 2010 reflect slight revisions to the first quarter. Total meat production for 2011 is raised fractionally. There are no changes to the beef and pork forecasts for 2011. The turkey production forecast for 2011 is raised slightly but broiler production is unchanged.
Changes in red meat and turkey imports and exports for 2010 reflect first-quarter trade data. Broiler exports for 2010 are raised as sales to a number of markets have been stronger than expected. Trade forecasts for 2011 are unchanged.
Cattle and hog price forecasts for 2010 are reduced from last month as demand has slackened. Broiler and turkey price forecasts are raised from last month. The egg price forecast is lowered. Price forecasts for 2011 are unchanged from last month.
Forecast milk production for 2010 is raised slightly from last month reflecting a slower decline in cow numbers and stronger expected growth in milk per cow. Milk production for 2011 is unchanged. Exports for 2010 and 2011 are raised on both a fat and skim solids basis. Product exports were higher than expected in the first quarter of 2010, and with generally tight world supplies, U.S. exports are expected to remain strong into 2011. Import forecasts are lowered for 2010 and 2011. Imports are reduced largely because of smaller-than-expected cheese imports in the first-quarter 2010 and expectations that imports will remain weak into 2011 due to relatively low U.S. prices and tight world supplies.
COTTON: The U.S. cotton projections for 2010/11 show slightly lower beginning and ending stocks compared with last month. Beginning stocks are reduced 200,000 bales due to an increase in the export forecast for 2009/10. Projections of production, domestic mill use, and exports are unchanged. Accordingly, ending stocks are revised down to 2.8 million bales, equal to 17 percent of total use and the smallest stocks level since 1995/96. The forecast range for the marketing-year average price received by producers remains at 60 to 74 cents per pound.
World projections for 2010/11 also include lower beginning and ending stocks compared with last month. Beginning stocks are reduced about 550,000 bales as higher stocks forecast for China are more than offset by reductions in Turkey, India, the United States, Pakistan, Brazil, and others. Production is raised for Australia, Sudan, and Mexico, while consumption is raised for Pakistan and Turkey. The resulting global stocks level of 49.6 million bales is 41.5 percent of total use which, if realized, would be the smallest stocks-to-use ratio since 1994/95.
The world and U.S. estimates also include revisions for 2009/10 from last month. World beginning stocks are reduced 450,000 bales, mainly in Turkey. World consumption is raised about 500,000 bales, due to adjustments for Pakistan and Turkey, where analysis suggests that ending stocks will be tighter than previously estimated. Imports are raised for China and Turkey, while exports are raised for the United States and India, reflecting activity to date. The forecast for the U.S. average price received by producers of 61.5 to 63.5 cents per pound is lowered one cent on the upper end of the range.