WASDE Report 8/10/12

Published on: 08:01AM Aug 10, 2012

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WASDE Report 8/10/12


OILSEEDS: U.S. oilseed production for 2012/13 is projected at 83.4 million tons, down 9.4 million
from last month, as a lower soybean production estimate is only partly offset by higher crops of
peanuts and cottonseed. Soybean production for 2012/13 is projected at 2.7 billion bushels, down
358 million due to lower harvested area and yields. Harvested area is projected at 74.6 million
acres, down 0.7 million from the July projection. The first survey-based soybean yield forecast of
36.1 bushels per acre is 4.4 bushels below last month's projection and 5.4 bushels below last
year's yield. Soybean supplies for 2012/13 are projected 12 percent below last month to a 9-year
low on lower production and reduced beginning stocks. Soybean exports are reduced 260 million
bushels to 1.11 billion bushels. Soybean crush is also reduced as higher prices reduce domestic
use and prospective exports for both soybean meal and oil. Soybean ending stocks are projected
at 115 million bushels, down 15 million.

U.S. changes for 2011/12 include increased soybean crush and exports and reduced ending
stocks. Crush is increased 15 million bushels to 1.69 billion reflecting increased exports and
domestic use of soybean meal. Soybean exports are increased 10 million to 1.35 billion bushelsreflecting strong shipments in recent weeks. Soybean ending stocks are projected at 145 million
bushels, down 25 million.

Soybean and product prices for 2012/13 are all raised to record levels this month, reflecting the
impact of sharply reduced soybean and corn production. The U.S. season-average soybean price
is projected at $15.00 to $17.00 per bushel, up $2.00 on both ends. Soybean meal prices are
projected at $460 to $490 per short ton compared with $365 to $395 last month. Soybean oil prices
are projected at 53 to 57 cents per pound, up 0.5 cents on both ends.

Global oilseed production for 2012/13 is projected at 457.3 million tons, down 8.5 million tons from
last month. Reductions for soybeans, sunflowerseed, peanuts, and cottonseed are only partly
offset by increased rapeseed production. Lower soybean production is projected for the United
States, Canada, and EU-27 due to lower yields resulting from hot, dry weather. Soybean
production is raised for Brazil and Paraguay as producers are expected to respond to sharply
higher prices with increased plantings. Brazil's soybean production is projected up 3 million tons at
a record 81 million. Sunflowerseed production is reduced for EU-27, Ukraine, and Moldova due to
the effects of hot, dry weather during the reproductive stage of the crops. Other changes include
higher rapeseed production for EU-27 and Ukraine, lower rapeseed production for China and
Australia, lower peanut production for India and Indonesia, and lower cottonseed production for

Global oilseed and meal production, trade, and consumption for 2012/13 are all reduced this month
reflecting the impact of reduced oilseed supplies and higher prices. Projected soybean imports for
China are reduced 1.5 million tons to 59.5 million as domestic soybean stocks contribute a larger
component of soybean meal consumption. Soybean exports for Brazil and Argentina are forecast
higher but only partly offset a reduction for the United States.

WHEAT: U.S. wheat supplies for 2012/13 are raised 54 million bushels with higher forecast
production and an increase in projected imports. Production is forecast 44 million bushels higher
with increased yields for winter wheat, durum, and other spring wheat. Feed and residual use is
projected 20 million bushels higher, reflecting the tighter supply situation for corn. Ending stocks
for 2012/13 are projected 34 million bushels higher. The projected range for the 2012/13 seasonaverage
farm price is raised substantially to $7.60 to $9.00 per bushel, compared with $6.20 to
$7.40 per bushel last month, as tighter foreign wheat supplies and sharply higher corn prices raise
price prospects for the remainder of the marketing year.

Global wheat supplies for 2012/13 are projected 2.1 million tons lower mostly reflecting a 3.7-
million-ton reduction in foreign production. A small increase in 2012/13 world beginning stocks is
partly offsetting with 2011/12 updates to trade and use for a number of countries. Lower expected
production in the FSU-12 accounts for most of this month's decline in world output. Production is
lowered 6.0 million tons for Russia on reduced area and yield prospects due to July heat and
dryness across most of the spring wheat growing areas. Spring wheat in adjoining areas of
Kazakhstan was also affected by the same adverse weather reducing production prospects 2.0
million tons. Other reductions this month include a 0.8-million-ton reduction for Turkey based on
lower reported yields, a 0.5-million-ton reduction for Argentina reflecting lower expected area, a 0.3-
million-ton reduction for Syria, and a 0.2-million-ton reduction for EU-27. Production is raised 2.9
million tons for India, 2.0 million tons for Ukraine, and 0.4 million tons each for Canada and

Global wheat consumption for 2012/13 is raised 3.2 million tons as a number of countries are
expected to shift some of their livestock and poultry feeding from corn to wheat. Wheat feeding is
raised 1.0 million tons each for EU-27 and Ukraine, 0.5 million tons each for South Korea and
Vietnam, 0.3 million tons for Israel, and 0.2 million tons each for India and Thailand. Partly
offsetting is a 0.5-million-ton reduction for Russia with lower expected production.
Global wheat imports for 2012/13 are raised with increases for several countries, in part, to support
higher wheat feeding. Imports are raised 0.5 million tons each for EU-27, South Korea, and
Vietnam, and raised 0.3 million tons for Israel. Imports are also raised 0.3 million tons for Brazil.
Global 2012/13 exports are raised, but much of the shift among countries also reflects reduced
export prospects for Russia, which is lowered 4.0 million tons. Exports are raised 2.0 million tons
for Ukraine, 1.0 million tons each for Canada and EU-27, 0.5 million tons each for Australia, Brazil,
and Pakistan. Exports are lowered 0.7 million tons for Argentina, 0.5 million tons for Turkey, and
0.2 million tons for Uruguay. World ending stocks for 2012/13 are projected 5.3 million tons lower
at 177.2 million.

COARSE GRAINS: U.S. feed grain supplies for 2012/13 are projected sharply lower again this
month with corn production forecast 2.2 billion bushels lower and sorghum production forecast 92
million bushels lower. The forecast U.S. corn yield is reduced 22.6 bushels per acre to 123.4
bushels as extreme heat and dryness continued, and in many areas worsened, during July across
the Plains and Corn Belt. As forecast, the 2012/13 corn yield would be the lowest since 1995/96.

Corn area harvested for grain is also lowered, down 1.5 million acres from the last month's forecast

that was based on the June Acreage report. The U.S. sorghum yield is forecast 16.3 bushels per
acre lower at 48.6 bushels as drought stressed sorghum from the Central Plains to the Corn Belt.
Sorghum harvested area is also lowered slightly.
U.S. corn production for 2012/13 is forecast at 10.8 billion bushels, the lowest since 2006/07.
Relatively small increases in carryin and imports only partly offset this month's substantial reduction
in crop size. Ending stocks for 2011/12 are projected 118 million bushels higher with lower
expected exports, reduced corn use for ethanol, and a small increase in imports. Imports for
2012/13 are also raised, up 45 million bushels to 75 million, reflecting strong domestic corn prices
and competitively priced foreign supplies. Total U.S. corn supplies for 2012/13 are projected down
2.0 billion bushels and at a 9-year low.

This month's large reduction in U.S. corn supplies and the sharply higher price outlook are
expected to further reduce 2012/13 corn usage. Total use is projected 1.5 billion bushels lower and
at 11.2 billion would be a 6-year low. The biggest reduction again this month is for feed and
residual disappearance, projected down 725 million bushels. Food, seed, and industrial (FSI) use
is also projected lower, down 470 million bushels, mostly reflecting a 400-million-bushel reduction
in corn used to produce ethanol. Reductions in other food and industrial uses account for the
remainder of the FSI decline. Ending stocks for 2012/13 are projected at 650 million bushels, 533
million lower and the smallest carryout since 1995/96. The 2012/13 season-average farm price for
corn is projected at a record $7.50 to $8.90 per bushel, up sharply from the $5.40 to $6.40 per
bushel projected in July. Projected farm prices for the other feed grains are also raised.

Global coarse grain supplies for 2012/13 are reduced 56.5 million tons mostly reflecting the
forecast 55.7-million-ton reduction in the U.S. corn crop. Larger 2012/13 corn beginning stocks in
the United States and Brazil partly offset lower U.S. and foreign coarse grain production. Brazil
corn beginning stocks are raised 2.8 million tons based on higher reported production for 2011/12.
Foreign corn production for 2012/13 is mostly unchanged with increases for China, Argentina,
Brazil, Mexico, and South Africa mostly offset by reductions for EU-27, Ukraine, India, Serbia,
Russia, Croatia, Moldova, and Canada. Foreign sorghum production is lowered 0.3 million tons
with a reduction for India. Reductions in barley production in FSU-12, EU-27, and Turkey lower
global barley production 1.1 million tons. A 2.5-million-ton reduction in India millet output also
lowers world coarse grain supplies.

Global 2012/13 corn trade is projected sharply lower this month in response to tighter U.S. supplies
and higher prices. Corn imports are lowered for China, EU-27, Indonesia, Japan, South Korea,
Mexico, Vietnam, Israel, Colombia, Peru, and Syria. In addition to the United States, corn exports
are reduced for Ukraine, EU-27, and Serbia. Partly offsetting are export increases for Argentina,
Brazil, South Africa, and Canada. Global corn consumption is projected 38.9 million tons lower with the United States accounting for more than three-fourths of the reduction. Foreign corn feeding drops 8.8 million tons with only part of the decline offset by higher wheat feeding. Corn feeding is lowered for EU-27, India, Canada, Japan, South Korea, Russia, Ukraine, Vietnam, Israel, and Indonesia. Global corn ending stocks are projected 10.8 million tons lower with increases for
China, Brazil, and Argentina only partly making up for the large reduction in the United States and
smaller reductions in a number of other countries.

SUGAR: Projected U.S. sugar supply for fiscal year 2012/13 is decreased 251,000 short tons, raw
value, compared with last month. Carry-in stocks are reduced mainly due to data revisions in
Sweetener Market Data, which lower 2011/12 ending stocks. Imports from Mexico are decreased
due to higher sugar consumption and carryout stocks in Mexico. Total use is unchanged.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2012 total red meat and poultry

production is raised from last month but the forecast for 2013 is reduced as higher feed prices are
expected to pressure producer returns. Beef production is raised from last month for both 2012
and 2013 due to higher expected placements in feedlots and increased dairy cow slaughter in late
2012 and during 2013. Carcass weights are forecast higher based on recent weight trends, but
higher feed prices are expected to temper the increase and carcass weights are expected to be
lower in 2013 compared to 2012. Pork production is reduced from last month for both 2012 and

The reduction for 2012 reflects lower slaughter in the third quarter and lighter expected
carcass weights through the year. As a result of high feed prices and recent hot weather, forecast
pig crops are lowered in the second half of 2012 with declines continuing into 2013. Pork
production is forecast lower in 2013 due to a combination of smaller hog supplies and lower
expected carcass weights. Broiler production is raised in 2012 as production in the second quarter
was higher than forecast last month and hatchery data points to higher than previously forecast
levels of production in the third quarter. However, high feed costs are expected to result in lower
broiler production in 2013. Turkey production is forecast lower in 2012 on lower second-quarter
production. The production forecast for 2013 is reduced as feed prices squeeze producer returns.
The egg production forecast is lowered for both 2012 and 2013.

Beef imports are reduced for 2012 based in part on weaker second-quarter data but are unchanged for 2013. Beef exports are reduced for both 2012 and 2013 as exports have slowed and tight supplies of pork and poultry are expected to support domestic beef demand. Pork and poultry exports are reduced for both 2012 and 2013.

Cattle prices are reduced from last month with the expectation of larger fed cattle marketings in
both 2012 and 2013. However, prices are likely to remain strong in 2013 as total meat supplies are
tight. Hog prices are raised in both years due to smaller hog supplies. Broiler prices are reduced in
2012 due to larger expected supplies and somewhat weaker demand, but for 2013, tighter supplies
are expected to help support higher prices. Turkey and egg price forecasts are raised on lower

Milk production forecasts for 2012 and 2013 are reduced from last month as higher forecast feed
prices are expected to pressure producer returns and encourage a more rapid decline in the cow
herd. Milk per cow is also reduced due to tighter feed supplies. Imports for 2012 are raised on
both a fat and skim-solids basis and are raised on a fat basis for 2013. Exports are raised for 2012
but exports for 2013 are reduced from last month on tighter supplies. Ending stocks are reduced.
Product prices are forecast higher for 2012 and 2013 as tighter supplies support prices. With
higher product prices, both Class III and Class IV price forecasts are raised. The all milk price is
forecast at $17.55 to $17.75 per cwt for 2012 and $17.80 to $18.80 per cwt for 2013.

COTTON: The U.S. 2012/13 cotton supply and demand estimates include larger production and
ending stocks compared with last month. Production is raised 651,000 bales to 17.7 million, up
nearly 4 percent, based on USDA's first crop survey. Domestic mill use is unchanged. Exports
remain forecast at 12.1 million bales, despite the larger supply, due to reduced import demand by
China. Ending stocks are now forecast at 5.5 million bales, equal to 35 percent of total use. The
range for the marketing year average price received by producers is narrowed 1 cent on each end
to 61 to 79 cents per pound.

This month's world 2012/13 cotton estimates also show larger supplies and ending stocks.
Beginning stocks are raised nearly 2.0 million bales in China as a result of adjustments to 2011/12
which both increase imports and reduce consumption. The higher China stocks are partially offset
by lower beginning stocks in Australia, Malaysia, Pakistan, and others, resulting in a net global
increase of 1.1 million bales. World production is raised 300,000 bales, as increases for the United
States, China, Burkina Faso, and Mali are partially offset by lower production for India, Brazil,
Argentina, and others. World consumption is reduced 820,000 bales, due mainly to reductions for
China and Pakistan.

World trade is reduced slightly, as lower imports by China are partially offset
by small increases for several countries. World stocks are raised to 74.7 million bales, including an
increase of nearly 2.4 million bales in stocks held by China; lesser increases for the United States,
Pakistan, and Uzbekistan are about offset by decreases for India, Australia, and Brazil. Projected
China stocks of 34.2 million bales account for 46 percent of the world stocks forecast, and assume
a net increase in China's national cotton reserve of about 20 percent during 2012/13.

RICE: U.S. total rice supplies for 2012/13 are projected at 244.4 million cwt, down 2.5 million from
last month. Projected beginning stocks, imports, and production are each lowered from a month
ago. USDA's first survey-based forecast of the 2012/13 U.S. rice crop is 190.0 million cwt, down
1.0 million from last month's projection, but up nearly 3 percent from the previous year. Average all
rice yield is forecast at 7,196 pounds per acre, down 39 pounds per acre from last month's


projection, but up nearly 2 percent from last year. Long-grain production is forecast at 132.1 million
cwt, down 1 percent from last month, while combined medium- and short-grain production is
forecast at 57.9 million, up less than 1 percent from a month ago. The all rice import projection is
lowered 0.5 million cwt to 21.0 million due in part to an expected slower pace of long-grain imports
from South and Southeast Asia, a continuation of the trend observed in 2011/12. All rice beginning
stocks for 2012/13 are lowered 1.0 million cwt to 33.5 million because of an increase in the 2011/12
export estimate to 102.0 million.

U.S. total rice use for 2012/13 is projected at 216.0 million cwt, down 2.0 million cwt from last
month. All rice domestic and residual use is lowered 2.0 million cwt to 124.0 million, all in longgrain.
The all rice export projection is unchanged at 92.0 million cwt, however, the rough rice
component is raised 1.0 million and offset by a 1.0 million reduction in combined milled- and brownexports
(rough-equivalent basis). The long-grain and combined medium- and short-grain export
projections are unchanged at 60.0 million cwt and 32.0 million, respectively. U.S. all rice ending
stocks for 2012/13 are projected at 28.4 million cwt, down 0.5 million from last month, and 15
percent below the previous year.

The 2012/13 long-grain U.S. season-average farm price is projected at $13.50 to $14.50 per cwt,
up 50 cents per cwt on each end of the range. The combined medium- and short-grain price is
projected at $15.50 to $16.50 per cwt, unchanged from a month ago. The 2012/13 all rice price is
projected at $14.10 to $15.10 per cwt, up 30 cents per cwt on each end of the range. A smaller
crop and tighter supplies, particularly for long-grain rice, are expected to support prices. The all
rice stocks-to-use ratio at 13.2 percent in 2012/13 is the lowest since 2007/08, and the long-grain
rice stocks-to-use ratio at 10.6 percent is the lowest since 2003/04.

Lower projected global 2012/13 total supply more than offsets a slight decrease in total use
resulting in an expected decrease in ending stocks. Global production is lowered 1.9 million tons to
463.2 million, due primarily to forecast reductions for India, Brazil, and North Korea, which are
partially offset by increases for China and South Korea. Beginning stocks are increased 0.8 million
tons due to a 1.0-million-ton increase for India, which is partially offset by reductions for Brazil and
Indonesia. World consumption is reduced 0.4 million tons. A 1.0-million-ton increase in China
offsets an identical reduction for India. Consumption forecasts are also lowered for Brazil, North
Korea, and the United States, partially offset by an increase for Indonesia. Global trade is changed
little from a month ago. Global ending stocks for 2012/13 are projected at 101.8 million tons, down
0.7 million from last month, and a decrease of 3.2 million from the previous year. The largest
stocks reductions for 2012/13 are for Brazil and Indonesia, each just over 0.3 million tons.


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