USDA Projects Soybean Supply Dip, Corn Flat

October 12, 2017 11:06 AM


This month’s 2017/18 U.S. corn outlook is for larger production, increased feed and residual use, and nearly unchanged ending stocks. Corn production is forecast at 14.280 billion bushels, up 96 million from last month. Corn supplies are higher, as a larger crop more than offsets a reduction in beginning stocks based on the Grain Stocks report. Projected feed and residual use is increased 25 million bushels. With supply and use changes essentially offsetting, corn ending stocks are up 5 million bushels from last month. The projected range for the season-average corn price received by producers is unchanged at $2.80 to $3.60 per bushel.

Corn exports are raised for Mexico and Argentina, with largely offsetting reductions for Russia and Ukraine. Argentina’s 2016/17 exports are lowered for the local marketing year beginning March 2017 reflecting a slower-than-expected pace of exports to date. Projected 2017/18 food, seed and industrial use for corn in China is raised based on recent trade data indicating a higher-than-expected level of corn product exports. Foreign corn ending stocks for 2017/18 are down from last month, mostly reflecting declines for China and Mexico that are only partially offset by increases for Argentina and Turkey. Global corn stocks, at 201.0 million, are down 1.5 million from last month.

Soybeans and Other Oilseeds

U.S. oilseed production for 2017/18 is projected at 132.3 million tons, down 0.5 million from last month mainly on lower sunflowerseed, canola, and cottonseed production. Soybean production is forecast at 4,431 million bushels, nearly unchanged from last month with higher harvested area offsetting lower yields. Harvested area is projected at a record 89.5 million acres, up 0.8 million. The soybean yield is forecast at 49.5 bushels per acre, down 0.4 bushels. With lower beginning stocks, soybean supplies for 2017/18 are projected down 44 million bushels. With use projections unchanged, ending stocks are projected at 430 million bushels. If realized, ending stocks relative to use would be the highest since 2006/07.

The 2017/18 U.S. season-average soybean price is forecast at $8.35 to $10.05 per bushel, unchanged from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 32.5 to 36.5 cents per pound, respectively. Global oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans, rapeseed, and sunflowerseed are partly offset by increases for cottonseed and peanuts. Global soybean production is projected down 0.6 million tons to 347.9 million on lower forecasts for Russia and Ukraine. Higher production for China and Mexico is partly offsetting. Sunflowerseed production is also lower for Russia and Ukraine on lower yields. Rapeseed production is lowered for Australia where yields are impacted by below-normal rainfall.

Global oilseed exports for 2017/18 are down 0.4 million tons to 173.9 million on lower soybean and sunflowerseed exports. Soybean exports are lowered for Ukraine while sunflowerseed exports are lowered for Ukraine and Russia. Lower rapeseed exports for Australia are offset by higher exports for Ukraine. Global oilseed ending stocks for 2017/18 are projected down 1.6 million tons from last month to 107.9 million mainly reflecting backyear adjustments that reduced soybean carrying for Brazil and the United States.


Grain sorghum production is forecast down from last month, as a 2.4-bushel per acre increase in yield to 72.2 bushels per acre is more than offset by a reduction in harvested area. Barley and oat production estimates are updated based on the Small Grains report. Global coarse grain production for 2017/18 is forecast up 2.8 million tons to 1,319.4 million. The 2017/18 foreign coarse grain outlook is for greater production, consumption, and reduced stocks relative to last month. Foreign corn production is forecast higher, with the largest reductions for Russia, Ukraine, Ethiopia, and Tanzania more than offset by increases for a number of countries including Nigeria, Turkey, and Mozambique. The projected corn yields for Russia and Ukraine are reduced based on reported harvest results to date. Historical revisions are made to Nigeria’s corn, sorghum, and millet production estimates to better reflect statistics published by the government.


Projected 2017/18 U.S. wheat supplies are decreased modestly this month as reduced beginning stocks are partially offset by slightly higher wheat production. Beginning stocks were revised downward in the latest NASS Grain Stocks report while wheat production increased in the NASS Small Grains Annual Summary to 1,741 million bushels. Although all wheat production increased minimally from last month, the by-class changes are relatively more significant as larger Durum and Hard Red Spring production more than offset declines in Hard Red Winter and Soft Red Winter. Projected 2017/18 feed and residual is reduced 30 million bushels this month to 120 million as the NASS Grain Stocks report indicated lower-than-expected June-August disappearance. Additionally, projected 2017/18 U.S. corn supplies are the second highest on record, which is expected to dampen wheat feed and residual use for the rest of 2017/18. The other wheat use categories are unchanged this month and projected 2017/18 ending stocks are higher at 960 million bushels but still well below last year’s 1,181 million. The projected 2017/18 season-average farm price is unchanged this month at the midpoint of $4.60 per bushel but the range is narrowed 10 cents on each end to $4.40 to $4.80.

Global 2017/18 wheat supplies are increased, primarily on higher production forecasts for Russia, EU, and India more than offsetting a decline in Australia. Based mainly on harvest results to date, Russia’s 2017/18 wheat production is increased 1.0 million tons to a new record of 82.0 million tons. This is well above last year’s previous record of 72.5 million tons. EU wheat production is raised 2.2 million tons to 151.0 million, largely on higher production in France. Australia’s wheat production is reduced 1.0 million tons to 21.5 million on persistent dry conditions in most of eastern Australia. This would be Australia’s lowest wheat output since the 2008/09 crop year.

Foreign 2017/18 trade is fractionally higher this month as reduced exports by Australia are offset by increased exports from Canada. Projected imports are lowered for India and Turkey as increased 2017/18 production for both countries is expected to reduce import needs. Total world consumption is projected higher, primarily on greater usage by India, EU, and Russia on their increased supplies. Projected global ending stocks are nearly 5.0 million tons higher this month at 268.1 million, which is a new record.

Livestock, Poultry and Dairy

The forecast for 2017 total red meat and poultry production is raised from last month as higher broiler and turkey production more than offset fractionally lower beef and pork production. Beef production is reduced from the previous month largely due to lower expected fourth-quarter carcass weights. The pork production forecast is lowered on smaller-than-expected third-quarter commercial hog slaughter which more than offset higher expected second-half carcass weights. The broiler production forecast is raised on expectations of increased slaughter later in the year based on hatchery data. The turkey forecast is increased as higher third-quarter slaughter more than offsets expected declines in fourth-quarter slaughter. The 2017 egg production forecast is raised from last month on higher hatching egg production.

For 2018, the total red meat and poultry forecast is raised from the previous month as higher expected beef and pork production more than offset declines in turkey production. Beef production is little changed from last month although first half production is lowered as pasture conditions are expected to slow the pace of placements in the latter part of 2017. However, heavier carcass weights are expected to offset a portion of the decline. Pork production is raised from last month on higher slaughter. In the Quarterly Hogs and Pigs report, released September 28, producers indicated they farrowed about 2 percent more sows in June-August and intend to farrow approximately 1 percent more sows over each of the next two quarters. With larger pig crops in the second half of 2017 and into 2018, pork production is forecast higher. The 2018 broiler and egg production forecasts are unchanged from the previous month. Turkey production forecasts for 2018 are lowered on slow recovery in demand which is expected to dampen the pace of expansion.

Beef import forecasts are raised in 2017 and 2018 on increased shipments of processing beef from Oceania. The 2017 and 2018 beef export forecasts are raised on strong demand in a number of key trading partners. Pork imports for 2017 and 2018 are raised from last month. The 2017 pork export forecast is lowered from the previous month on recent trade data, but no change is made to the 2018 export forecast. Annual broiler, turkey, and egg export forecasts are unchanged.

Cattle price forecasts are unchanged for 2017 and 2018. Hog price forecasts are lowered for the last quarter of 2017 and into 2018 on larger supplies and pressure from abundant supplies of red meat and poultry. The annual broiler price is forecast slightly lower for 2017 but is unchanged for 2018. Turkey price forecasts are lowered in 2017 and 2018 on slow recovery in demand. Egg price forecasts are raised on near-term demand strength which is expected to carry over into next year.

The milk production forecast for 2017 and 2018 is raised on a slightly more rapid pace of growth in milk per cow. However, forecast cow numbers for late 2017 and 2018 are slightly lower. Fat basis imports for 2017 and 2018 are raised on strength in butter imports but skimsolids imports are lowered for 2017 and unchanged for 2018. Exports on a fat basis are raised for 2017 on stronger butter and cheese exports, and increased sales of butter and anhydrous milkfat are expected to support higher fat basis exports in 2018. Skim-solids exports for 2017 and 2018 are raised, primarily on stronger expected shipments of whey products.

For 2017, butter and nonfat dry milk (NDM) prices are lowered on large supplies, but the whey price is unchanged at the midpoint and the cheese price forecast is raised on current demand strength. For 2018, continued demand strength for cheese is reflected in a higher price forecast, while butter, NDM, and whey prices are lowered on larger supplies and pressure from international prices. The Class III price is raised for 2017 on stronger cheese prices, but for 2018, lower whey prices are expected to more than offset the increases in cheese prices, and the price forecast is lowered. The Class IV price is lowered for both years due to lower forecast butter and NDM prices. The 2017 all milk price forecast range is $17.75 to $17.85 per cwt, unchanged at the midpoint, but the 2018 price is lowered to $17.45 to $18.35 per cwt.


The 2017/18 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks relative to last month. Production is reduced 643,000 bales, largely in Texas and Georgia. Domestic mill use is unchanged from last month, but the export forecast is reduced 400,000 bales to 14.5 million, due to reduced U.S. production and strong competitor shipments. Ending stocks are forecast 200,000 bales below the previous month’s forecast. The resulting stocks-to-use ratio of 32.5 percent is virtually unchanged from the previous month’s forecast, and the highest since 2008/09. The forecast range for the marketing year average farm price is 55.0 to 65.0 cents per pound; the midpoint of 60.0 cents is unchanged from the previous month’s projection.

The global cotton supply and demand forecasts for 2017/18 include relatively small increases from the previous month for production, consumption, and trade. Production is raised about 100,000 bales as larger expected crops in Argentina, Brazil, and Greece more than offset the reduction in the forecast for the United States. Vietnam is the primary driver behind a 250,000-bale increase in projected world consumption, while a 440,000-bale increase in projected 2017/18 world cotton trade reflects increases in India, Australia, and Brazil that more than offset lower expected U.S. exports.


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