WASDE Lowers Corn Production by a Bushel but Raises Ending Stocks

10:59AM Sep 12, 2019
USDA

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From USDA WASDE:

 

WHEAT: The 2019/20 U.S. wheat supply and demand outlook is unchanged this month but there were offsetting by-class changes for wheat exports. The projected season-average farm price is $4.80 per bushel, down $0.20 on NASS monthly prices reported to date and expectations for cash and futures prices for the remainder of the marketing year (MY). Global wheat prices are expected to be restrained for the rest of the MY on greater 2019/20 exportable supplies for several major U.S. competitors compared to last year.

The global outlook for wheat this month is for lower supplies, reduced consumption and exports, and higher ending stocks. Supplies are reduced primarily on lower production forecasts for Australia and Kazakhstan on continued dry conditions. Australia’s production is lowered 2 million tons to 19.0 million, mainly on the second consecutive year of drought in New South Wales and Queensland. Kazakhstan’s wheat production is lowered 1.5 million tons to 11.5 million on further deteriorating conditions, and this would be its lowest output since 2012/13. This reduction in global production is tempered by higher carry-in stocks, which results in global supplies less than 1 million tons lower this month. World exports are decreased by 1.8 million tons to 180.8 million on reductions for Australia and Kazakhstan. Global consumption is lowered 1.9 million tons, led by declines for Indonesia, Russia, Uzbekistan, and Ukraine. Despite a reduction this month in global supplies, 2019/20 ending stocks are projected record large at 286.5 million tons with China comprising 51 percent of the total.

COARSE GRAINS: This month’s 2019/20 U.S. corn outlook is for reduced production, lower corn used for ethanol, and slightly higher ending stocks. Corn production is forecast at 13.799 billion bushels, down 102 million from last month on a lower yield forecast. Corn supplies are down from last month, as a smaller crop more than offsets larger beginning stocks due to lower estimated exports and corn used for ethanol for 2018/19. Corn used for ethanol for 2019/20 is lowered 25 million bushels. With use falling more than supply, corn ending stocks are up 9 million bushels from last month. The season-average corn price received by producers is unchanged at $3.60 per bushel.

This month’s 2019/20 foreign coarse grain outlook is for virtually unchanged production, with fractionally lower trade and stocks relative to last month. Ukraine corn production is lowered, as dry conditions during the month of August reduce yield prospects for filling corn. EU corn production is unchanged, as reductions for France and Germany offset increases for Bulgaria and Romania. Barley production is raised for Russia, Ukraine, the EU, and Kazakhstan, but lowered for Australia and Canada.

Major global coarse grain trade changes for 2019/20 include barley export increases for Ukraine, Kazakhstan, and Russia, with a partly offsetting reduction for Australia. For 2018/19, corn exports for Brazil are raised for the local marketing year beginning March 2019, based on record large shipments during the month of August. Foreign corn ending stocks for 2019/20 are lower relative to last month, mostly reflecting declines for Brazil, Ukraine, Mexico, Paraguay, and Chile.

RICE: The outlook for 2019/20 U.S. rice this month is for much lower supplies, reduced domestic use and exports, and lower ending stocks. The August 23 NASS Rice Stocks report indicated lower 2018/19 ending stocks than previously estimated, thereby reducing 2019/20 beginning stocks by 5.7 million cwt. In the September Crop Production report, NASS reduced the 2019/20 crop by 18.1 million cwt to 187.3 million on lower harvested area and yields. NASS incorporated FSA certified acreage data this month, and all rice planted area is lowered by 216,000 acres, the result of excessive precipitation at planting time especially in the upper Mississippi River Delta. Long-grain planted area is lowered 278,000 acres while combined medium- and short-grain area is up 62,000 acres. The average all rice yield is down 14 pounds per acre to 7,563 pounds. Long-grain production is cut 22.4 million cwt and combined medium- and short-grain production is raised 4.4 million. All rice supplies are lowered 23.4 million cwt to 261.8 million, which is 7 percent below last year. Domestic and residual use and exports are each lowered 6.0 million cwt on the lower supplies. All rice ending stocks are lowered 11.4 million cwt to 35.8 million and the season-average farm price is raised $1.00 per cwt to $13.20.

Global 2019/20 supplies are lowered 3.1 million tons, led by a 3.0-million-ton crop reduction for India and a 0.6-million-ton reduction for the United States. Beginning stocks are raised 0.5 million tons. World 2019/20 exports are lowered 1.5 million tons with India down 0.8 million tons on the smaller crop and Thailand down 0.5 million tons on a slow pace and lack of price competitiveness in international markets. Global consumption is cut 1.2 million tons, and world ending stocks are lowered 1.9 million tons to 172.7 million, but both remain record large.

OILSEEDS: U.S. oilseed production for 2019/20 is projected at 110.2 million tons, down 1.3 million from last month with lower soybean and cottonseed production partly offset by a higher peanut forecast. Soybean production is projected at 3.6 billion bushels, down 47 million on a lower yield forecast of 47.9 bushels per acre. Soybean supplies are reduced 2 percent on lower production and beginning stocks. With soybean crush and exports unchanged, ending stocks are projected at 640 million bushels, down 115 million from last month.

The U.S. season-average soybean price for 2019/20 is forecast at $8.50 per bushel, up 10 cents. The soybean meal price is projected at $305 per short ton, up $5.00. The soybean oil price forecast is unchanged at 29.5 cents per pound.

Changes for 2018/19 include higher U.S. soybean exports, higher crush, and lower ending stocks. Exports are increased 45 million bushels based on official trade data through July and indications from August export inspections, which were record high for the month. With crush raised 20 million bushels, ending stocks for 2018/19 are projected at 1.0 billion bushels, down 65 million.

This month’s 2019/20 global oilseed outlook includes lower production, increased trade, and reduced stocks relative to last month. Global rapeseed production is at a 3-year low, mainly reflecting lower production for the EU on both area and yield. Australia’s production is also lowered this month due to dry weather conditions in New South Wales and Queensland. Soybean production is down slightly this month as lower U.S. production is mostly offset by higher output for India, Canada, and China.

Major global oilseed export changes for 2019/20 include higher rapeseed and soybean exports for Canada. For 2018/19, soybean exports for Brazil are lowered based on lowerthan-expected shipments during the past few months. However, higher-than-expected exports by Argentina and the United States, particularly to China, are offsetting. Global soybean ending stocks for 2019/20 are lower as reduced stocks for Argentina and the United States are partly offset by higher stocks for Brazil, Iran, and India.

SUGAR: Beet sugar production for 2019/20 is projected at 5.005 million short tons, raw value (STRV), down 174,315 on reductions in NASS sugarbeet yield forecasts in Crop Production. The national sugarbeet yield is down 3.5 percent from August with reductions in all major producing regions. Beet sugar production for 2018/19 is decreased by 51,144 STRV to 4.957 million on processors’ preliminary final crop year reporting that lowered estimated crop year sucrose recovery from sliced beets and lowered production from desugared molasses.

Raw sugar TRQ imports for the 2018/19 quota year eligible for entry until October 15 are forecast lower by 27,558 STRV, implying an increased shortfall estimate of 55,116 STRV. The reduction is expected to lower TRQ imports entering before September 30 by 22,046 STRV and imports in October by 5,512 STRV. Re-export imports for 2018/19 are estimated 20,000 STRV higher based on pace to date, largely offsetting the TRQ reduction. For 2019/20, imports from Mexico are projected at 1.118 million STRV, an increase of 149,375.

Deliveries for human consumption for 2018/19 are decreased by 25,000 STRV to 12.175 million based on a slower-than-expected pace. Corresponding deliveries for 2019/20 are decreased in line by the same amount. Ending stocks for 2018/19 are estimated at 1.747 million STRV for a stocks-to-use ratio of 14.16 percent. Ending stocks for 2019/20 are projected at 1.666 million STRV for a stocks-to-use ratio of 13.50 percent.

Mexico sugar production for 2019/20 is projected at 6.200 million metric tons, actual weight (MT), a reduction of 48,000 based on reports of drought in several producing areas. With no changes to imports, deliveries, or ending stocks, the change in exports for 2019/20 match the 48,000 MT decrease in production. Exports to the United States are projected at 956,738 MT, equal to the expected level of U.S. Needs as defined in the amended Suspension Agreements. Exports to non-U.S. destinations are projected residually at 537,091 MT.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2019 total red meat and poultry production is lowered from last month as reduced beef, pork, and turkey production forecasts more than offset higher broiler production. Beef production is reduced from the previous month primarily on slower expected pace of fed cattle slaughter and lighter carcass weights in the fourth quarter. The pork production forecast is reduced on the current rate of slaughter in the third quarter and slightly lighter carcass weights. USDA’s Quarterly Hogs and Pigs report will be released on September 27 and provide information on producer farrowing intentions into early 2020. The turkey forecast is reduced on lower expected third- and fourthquarter production. The broiler production forecast is raised on recent production data and continued growth in average bird weights for the remainder of the year. The 2019 egg production forecast is raised slightly on hatchery flock data.

For 2020, the total red meat and poultry forecast is raised from the previous month on higher expected beef and broiler production. Beef production is raised from last month as higher expected first-half 2020 marketings support higher fed cattle slaughter in 2020. First-half carcass weights are also expected to support increased beef production. The broiler production forecast is raised from the previous month on expectations of a higher proportion of heavy bird weights. Pork, turkey, and egg production forecasts are unchanged from the previous month.

Beef import and export forecasts for 2019 are reduced, reflecting recent trade data; however, no changes are made to the forecasts for 2020. The 2019 and 2020 pork export forecasts are raised from the previous month on recent trade data and expectations of continued strong global demand for U.S. pork products. The 2019 broiler export forecast is adjusted higher reflecting recent trade data, but no change is made to the 2020 export forecast. No changes are made to the 2019 and 2020 turkey trade forecasts.

The cattle price forecast for 2019 is lowered on current prices and expectations of continued price weakness; the 2020 forecast is also reduced. Hog price forecasts are reduced slightly for 2019 and first-half 2020. The 2019 broiler price forecast is raised on recent price strength, but no change is made to 2020 price forecasts. Turkey price forecasts are unchanged for both 2019 and 2020. The 2019 and 2020 egg price forecasts are raised from last month on strong demand that is expected to carry into the next year.

The milk production forecast for 2019 is raised as stronger growth in milk per cow more than offsets forecast lower cow numbers. For 2020, the milk production forecast is reduced from the previous month on slower expected growth in dairy cow numbers; however this is partly offset by slightly higher forecast milk per cow. The 2019 and 2020 fat basis import forecasts are lowered on recent trade data and expectations of slower butterfat imports. Fat basis export forecasts for 2019 and 2020 are reduced from last month on weaker expected global demand for U.S. butterfat products. The 2019 skim-solids basis import forecast is raised from the previous month on higher-than-expected imports of milk protein concentrates and a number of other dairy products. This strength is expected to carry over into 2020 and the 2020 skim-solids basis import forecast is raised. The skim-solids basis export forecast for 2019 is reduced from last month on weakness in a number of dairy products, but the 2020 skim-solids basis export forecast is raised primarily on expected strong global demand for lactose.

For 2019 and 2020, cheese, nonfat dry milk (NDM), and whey prices are raised from the previous month, but the price forecast for butter is reduced. The 2019 and 2020 the Class III price forecasts are raised from last month on higher cheese and whey prices. The 2019 and 2020 Class IV price forecasts are lowered from the previous month as lower forecast butter prices more than offset higher NDM prices. The 2019 all milk price is forecast raised to $18.35 per cwt, and the all milk price forecast for 2020 is raised to $18.85 per cwt.

COTTON: The 2019/20 U.S. cotton estimates include lower beginning stocks, production, exports, and consumption, while ending stocks are unchanged. Beginning stocks are reduced 400,000 bales this month, reflecting 2018/19 reported ending stocks data from the Farm Service Agency and the NASS Cotton System Consumption and Stocks report. Production is lowered 654,000 bales to 21.9 million, largely due to a decline for the Southwest, while consumption is lowered 100,000 bales reflecting recent activity. Exports are projected 700,000 bales lower due to reduced U.S. production and a lower projected U.S. share of world trade. The 2019/20 season-average price for upland cotton is forecast at 58 cents per pound, down 2 cents from last month.

In both the 2017/18 and 2018/19 U.S. cotton balance sheets, the estimate for unaccounted cotton is revised downwards and exports are revised upwards. The unaccounted element of the U.S. cotton balance sheet has been growing in recent years, indicating an imbalance in the sum of the other components. The estimates for production, consumption, and stocks have maintained their consistency over this time, but a growing difference has occurred between the sources available for estimating U.S. exports. For 2017/18, exports are raised 432,000 bales, and unaccounted is reduced 332,000 bales. For 2018/19, exports are raised 546,000 bales, and unaccounted is 546,000 bales lower than the result based on the methodology used in past years. In each marketing year, revised exports are estimated as the average of the export levels reported by the Bureau of the Census and USDA’s Export Sales Reporting System. See the Foreign Agricultural Service’s Cotton: World Markets and Trade for more details on the export change and the Economic Research Service’s Cotton and Wool Outlook for a detailed explanation of the stocks calculation.

The 2019/20 world estimates this month show higher beginning stocks, but lower production, consumption, and world trade. Production is forecast 709,000 bales lower as reductions for the United States and Australia offset an increase for India. Consumption is forecast 1.3 million bales lower than in August, with lower estimates for China, India, Brazil, Thailand, Vietnam, and the United States offsetting an increase for Turkey. World trade is lower as lower imports are forecast for China, Vietnam, and Thailand. World ending stocks for 2019/20 are forecast 1.3 million bales higher this month, at 83.7 million bales, 2.9 million bales above the revised 2018/19 estimate.