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WHEAT: U.S. 2016/17 wheat exports are raised 50 million bushels to 1,025 million reflecting a strong pace to date. Food use is lowered 3 million bushels to 960 million following the February 1 release of NASS’ Flour Milling Products report. These changes resulted in a net 47-million-bushel reduction in ending stocks, now projected at 1,139 million bushels, which would still be the largest since the late 1980’s. The season-average farm price is raised $0.05 at the midpoint of the range to $3.85 per bushel on strengthening cash prices.
Global wheat supplies are lowered 4.2 million tons primarily due to sharp reductions in the India and Kazakhstan crops. Indian production is lowered 3.0 million tons to 87.0 million, which is well below the latest government of India estimate. The Kazakhstan crop is reduced 1.5 million tons on updated government statistics. Foreign exports are lowered 0.4 million tons with reductions for Kazakhstan and Russia more than offsetting increases for Argentina and Ukraine. Total global use for 2016/17 is raised 0.5 million tons with higher feed and residual use partially offset by a decline in food use. Vietnam and China feed and residual use is raised 1.3 million tons and 1.0 million tons, respectively. With global supplies falling and total use increasing, world ending stocks are lowered 4.7 million tons this month.
COARSE GRAINS: This month’s 2016/17 U.S. corn outlook is for increased food, seed and industrial (FSI) use and reduced stocks. Corn used to produce ethanol is raised 25 million bushels to 5,350 million based on the most recent data from the Grain Crushings and Co-Products Production report, and strong pace of weekly ethanol production during January as indicated by Energy Information Administration (EIA) data. Non-ethanol FSI is raised 10 million bushels. Corn ending stocks are lowered 35 million bushels from last month. The projected range for the season-average corn price received by producers is narrowed 10 cents on each end to $3.20 to $3.60 per bushel, with the midpoint unchanged at $3.40.
Forecast U.S. sorghum exports are lowered 25 million bushels from last month, reflecting the slow pace of export commitments through January, particularly to China. Offsetting is a projected increase in feed and residual use. Grain sorghum prices are projected to average $2.50 to $2.90 per bushel, down 20 cents at the midpoint to $2.70 reflecting the current weak relationship to corn prices in interior markets.
Global coarse grain production for 2016/17 is forecast 1.4 million tons higher from last month to 1,329.0 million. This month’s foreign coarse grain outlook is for increased production, consumption, and trade relative to last month. Mexico corn production is projected to be record high, as government data indicates higher planted area and a lower level of abandonment following a favorable summer growing season. Sorghum production is lowered as producers reduced plantings in favor of corn due to the prevalence of the sugarcane aphid. Ukraine corn production is raised on a forecast record-high yield, based on the latest harvest results to date. Barley production is lowered for Iran, but raised for Kazakhstan.
Major global trade changes for 2016/17 this month include higher projected corn exports for Ukraine and Canada. Corn imports are raised for Iran and Vietnam, while sorghum imports are lowered for China. Forecast 2016/17 corn feed and residual use for China is raised, reflecting sharply reduced imports of corn substitutes, relatively low internal market prices and efforts by the government to promote use of domestic supplies. Projected FSI use for China is increased as lower prices and government support are expected to boost domestic use and exports of corn-based industrial products. Foreign corn ending stocks are lowered from last month, with reductions for China and the EU only partially offset by increases for Paraguay and Mexico.
RICE: U.S. 2016/17 rice exports are lowered 2.0 million cwt to 110.0 million. Long-grain milled exports account for the entire reduction and reflect the sales and shipment pace to date. U.S. ending stocks are raised by an equal amount and are the highest since 1985/86. The 2016/17 all rice season-average farm price range is raised $0.10 per cwt at the midpoint to $10.50. The long-grain, and the Other States medium- and short-grain season-average prices are both increased.
Global rice supplies for 2016/17 are raised fractionally this month. World exports are raised 0.5 million tons led by increases for Thailand and India. Global use is raised 0.8 million tons resulting in a 0.8 million ton reduction in the world ending stocks forecast. Global ending stocks are projected to be the largest since 2001/02.
OILSEEDS: U.S. soybean supply and use projections for 2016/17 are unchanged this month, leaving ending stocks at 420 million bushels. Soybean exports are projected at 2,050 million bushels, up 114 million from last year. Although soybean export commitments through January are significantly higher than a year ago, competition from expected record South American exports will limit U.S. shipments to well below last year’s record levels this summer.
The U.S. season-average soybean price range for 2016/17 is projected at $9.10 to $9.90 per bushel, unchanged at the midpoint from last month. Soybean oil prices are forecast at 34 to 37 cents per pound, and soybean meal prices are projected at $310 to $340 per short ton, both unchanged at the midpoint from last month.
The 2016/17 global oilseeds supply and demand estimates include lower production and ending stocks compared to last month. Oilseed production is projected down 0.6 million tons to 554.2 million, with lower soybean production only partly offset by higher sunflowerseed, rapeseed, and cottonseed. Global soybean production is down 1.2 million tons to 336.6 million mainly on a 1.5-million-ton reduction for Argentina where heavy rain impacted the expected harvested area. Partially offsetting is a 0.3-million-ton increase for Ukraine on higher yields. Global soybean crush is raised 0.4 million tons to 290.7 million, largely driven by the most recent crush data for Argentina. Global sunflowerseed production is raised 0.5 million tons to 44.8 million on increases for Ukraine, Kazakhstan, and the EU.
Global oilseed trade is projected up 0.7 million tons to 161.0 million tons. Increased exports of soybeans from Ukraine, rapeseed from Canada, and sunflowerseed from Argentina account for most of the change. Global oilseed stocks are projected lower, mostly reflecting reduced soybean stocks for Argentina and reduced rapeseed stocks for Canada.
SUGAR: U.S. cane sugar production for 2016/17 is reduced by 72,803 short tons, raw value (STRV). Almost all the reduction is based on industry reporting in Florida indicating less sugarcane acreage and slightly lower yields than previously forecast. U.S. exports for 2016/17 are now projected at 75,000 STRV on indications of planned beet sugar exports of 50,000 this fiscal year. This increase is matched by an equivalent increase in raw sugar re-export imports. No change is made this month in deliveries for human consumption. Although, beet sugar deliveries have been strong through the fiscal year’s first quarter, bulk cane sugar deliveries are far below trend with significant year-over-year declines in deliveries to bakery/cereal, confectionery, and multiple and other food use manufacturers. Additionally, although projected imports from Mexico are unchanged from last month, there remains market uncertainty regarding availability of sugar imported from Mexico as a result of ongoing talks concerning the AD and CVD Suspension Agreements. Ending stocks for 2016/17 are projected at 1.808 million STRV, implying an ending stocks-to-use ratio of 14.8 percent, down from last month’s 15.4 percent. There are no changes to the Mexico 2016/17 sugar supply and use this month.
LIVESTOCK, POULTRY, AND DAIRY: Estimated red meat and poultry production for 2016 was adjusted to reflect December slaughter data. Total red meat and poultry production for 2017 is lowered, largely reflecting decreased pork and poultry forecasts. Beef production is raised. Placements and marketings for the year are raised, resulting in higher cattle slaughter. The January Cattle inventory report estimated that total cattle and calf numbers on January 1, 2017 increased for the third consecutive year. Beef cow numbers were above 2016, and producers indicated they were holding more heifers for addition to the breeding herd. The report also indicated a year-over-year increase in the number of cattle outside feedlots. The January Cattle on Feed report showed higher than expected placement numbers in December, implying that larger numbers of fed cattle will be marketed during the spring quarter. Cattle weights are reduced for 2017 as producers are expected to remain current in feedlot marketings. Pork production in the first quarter is reduced on the current pace of slaughter and slightly lighter carcass weights. Broiler production is lowered as increases in production in the first quarter are more than offset by reductions in the second half of the year. Table egg production is increased on hatchery data and expectations of relatively favorable returns, but this is more than offset by a lowered hatching egg production forecast. No changes were made to turkey production.
Livestock trade estimates for 2016 are adjusted to reflect December data. For 2017, forecast beef imports are raised on expectations of higher shipments of processing beef from Oceania. Robust demand for U.S. beef supports higher forecast beef exports for the year. No changes are made to pork, poultry and egg trade forecasts.
Cattle, hog, and broiler price forecasts are raised to reflect demand strength. Turkey prices are forecast lower on current prices. Egg prices are increased on current price strength.
The milk production forecast for 2017 is raised from last month. Improved returns in 2017 are expected to result in a slightly higher forecast cow inventory during the late part of 2017. Milk output per cow is also raised as improved returns are expected to support continued improvements in the quality of dairy rations. Beginning stocks on both a fat and skim-solids basis are raised from last month on December 31 storage data; stocks at the end of 2017 are raised, reflecting increased beginning inventories and higher dairy product production in 2017. Fat-basis imports are reduced as domestic butterfat is expected to be more competitive with the EU; skim-solids imports are unchanged. Fat basis exports are unchanged and skim-solids basis exports are raised slightly. Skim-solids imports are virtually unchanged as weaker exports of nonfat dry milk (NDM) are offset with stronger whey sales. For 2016, milk production, output per cow, trade, and stock estimates are updated based on data through December.
Cheese and butter price forecasts are lowered as product production is expected to reflect higher forecast milk production and beginning stocks are relatively high. The nonfat dry milk price forecast is unchanged, but the whey price is raised from last month on the strength of domestic and international demand. The Class III price is raised as the higher whey price more than offsets the lower cheese price forecast. The Class IV price is reduced as the butter price forecast is lowered. The all milk price is forecast higher at $17.70 to $18.40 per cwt.
COTTON: The 2016/17 U.S. cotton supply and demand forecasts show slightly higher exports and lower ending stocks relative to last month. Production and domestic mill use are unchanged. The export forecast is raised 200,000 bales to 12.7 million based on strong export sales during January. Ending stocks are now estimated at 4.8 million bales, equivalent to 30 percent of total disappearance. The marketing year average price received by producers is projected to average between 67 and 71 cents per pound, an increase of 2 cents on both ends of the range, as recent market prices have exceeded previous expectations.
The 2016/17 world cotton forecasts include slightly higher consumption and lower ending stocks. World production is virtually unchanged from last month, as a higher estimate for China is mostly offset by lower expectations for Pakistan, Uzbekistan, and Turkmenistan. Global consumption is forecast higher, due mainly to increases for India, Bangladesh, and Vietnam. World ending stocks are now projected at 89.9 million bales.
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