WASDE Report for 11/9/10
OILSEEDS: Total U.S. oilseed production is projected at 101.8 million tons, down 1 million from last month as lower soybean and cottonseed production are only partly offset by higher peanut production. Soybean production is forecast at 3.375 billion bushels, down 33 million from last month. The soybean yield is projected at 43.9 bushels per acre, down 0.5 bushels from the previous estimate. Soybean exports are raised 50 million bushels to a record 1.57 billion due to increased global import demand and to a record sales pace, especially to China which accounts for over 70 percent of known U.S. soybean export sales through October. Soybean ending stocks are projected at 185 million bushels, down 80 million from last month.
Soybean oil ending stocks for 2010/11 are raised this month due to higher beginning stocks reported by the U.S. Census Bureau and to reduced domestic disappearance reflecting lower projected food use of soybean oil.
Prices for soybeans and products are projected higher for 2010/11. The U.S. season-average soybean price range is projected at $10.70 to $12.20 per bushel, up 70 cents on both ends. The soybean meal price is projected at $310 to $350 per short ton, up 20 dollars on both ends of the range. The soybean oil price range is projected at 42.5 to 46.5 cents per pound, up 3 cents on both ends of the range.
Global oilseed production for 2010/11 is projected at 440.7 million tons, up 0.1 million from last month. Increased soybean production is mostly offset by lower sunflowerseed, rapeseed, peanut, and cottonseed production. Global soybean production is projected higher with increases for Brazil, Argentina, India, and South Africa only partly offset by a reduction for the United States. Argentina soybean production is raised 2 million tons to 52 million due to increased area as producers respond to relatively high soybean prices. Brazil soybean production is projected at 67.5 million tons, up 0.5 million from last month due to increased area. Global sunflowerseed production is projected lower due to reduced estimates for Russia, Argentina, India, and EU-27. Other changes include lower rapeseed production for Australia, lower peanut production for India, and lower cottonseed production for China.
Oilseed trade is projected at 111.4 million tons, up 1.8 million. China soybean imports for 2010/11 are raised to 57 million tons, up 2 million from last month. EU-27 imports of soybeans and soybean meal are raised this month to offset lower sunflowerseed and rapeseed availability.
COARSE GRAINS: U.S. feed grain supplies for 2010/11 are reduced this month with lower expected corn production. Corn production is forecast 124 million bushels lower as the national average yield is lowered to 154.3 bushels per acre, down 1.5 bushels from the previous forecast. Feed and residual use is projected 100 million bushels lower with the smaller forecast crop and higher prices expected to reduce feeding. Exports are lowered 50 million bushels as higher prices trim export demand. Corn use for ethanol is raised 100 million bushels with record October ethanol production indicated by weekly WASDE-488-2
Energy Information Administration data and favorable ethanol producer margins. Ethanol prices continue to track higher with corn prices, supporting returns for ethanol producers. Although small relative to domestic usage, higher ethanol exports and lower imports are also expected to add to corn use for ethanol with high sugar prices limiting the availability of ethanol from Brazil.
Corn ending stocks for 2010/11 are projected 75 million bushels lower. At 827 million bushels, ending stocks would be the lowest since 1995/96 and represent a carryout of 6.2 percent of projected usage. In 1995/96, carryout dropped to 5 percent of estimated usage. The season-average farm price is projected at $4.80 to $5.60 per bushel, up 20 cents on both ends of the range and well above the previous record of $4.20 per bushel in 2007/08.
Global coarse grain supplies for 2010/11 are projected 3.3 million tons lower reflecting reduced corn production in the United States, reduced barley production in China, and reduced oats and rye production in Russia. Global corn production is reduced 1.1 million tons as the U.S. decline is partly offset by a 2.0-million-ton increase for China on higher 2010/11 area. Corn production for China is also raised 2.0 million tons for 2009/10 based on an area increase of 800,000 hectares as indicated by official government statistics. Global 2010/11 barley production is lowered 0.8 million tons mostly on a 0.7-million-ton reduction for China on lower area and yields. Other barley changes include small reductions for Belarus and EU-27, and a 0.3-million-ton increase for Australia as abundant rainfall in eastern growing areas support higher yields. Global oats production is lowered 1.3 million tons mostly on a 1.0-million-ton reduction for Russia. Global rye production is lowered with a 0.4-million-ton reduction for Russia.
Global 2010/11 coarse grain trade is lowered slightly this month with lower corn imports for the Philippines and South Korea partly offset by small increases in corn imports for Saudi Arabia and sorghum imports by EU-27. Corn exports are raised 0.5 million tons each for EU-27 and Serbia mostly offsetting the 1.3-million-ton reduction for the United States. Global coarse grain consumption for 2010/11 is lowered slightly as higher corn feeding in China and Argentina are mostly offset by reduced corn feeding in EU-27, South Korea, and the Philippines. Oats and barley consumption are also lowered with reduced oat feeding in Russia and China and reduced barley feeding in EU-27 and China. Global corn ending stocks are lowered 3.2 million tons. At 129.2 million tons, world corn stocks would be the lowest since 2006/07, the first year of the rapid expansion in U.S. ethanol production and use.
WHEAT: U.S. wheat ending stocks for 2010/11 are projected 5 million bushels lower this month as downward production revisions of 11 million bushels for Hard Red Spring (HRS) wheat and 4 million bushels for durum more than offset higher projected imports. Imports are raised 10 million bushels with increases for Soft Red Winter (SRW) wheat and durum. Exports are unchanged, but shifts among classes result in higher projected exports of Hard Red Winter and HRS wheat and reductions for SRW and durum. The projected season-average price received by producers is narrowed 5 cents on each end of the range to $5.25 to $5.75 per bushel. Heavy early season marketings and forward sales limit upside potential for the season-average farm price.
Global wheat supplies are projected slightly higher for 2010/11 as higher world production offsets lower carryin, mostly reflecting higher 2009/10 wheat feeding in China. World production is raised 1.5 million tons for 2010/11 as increases for Argentina, Australia, EU-27, and Paraguay more than offset reductions for FSU-12 and the United States. Argentina production is raised 1.5 million tons as favorable returns and timely rains boost area and yield prospects. Australia production is raised 1.0 million tons as rising yield prospects in eastern growing areas more than offset reductions from extended dryness in Western Australia. Production is raised 0.6 million tons for EU-27 mostly based on higher reported area for Poland. Production for Russia is lowered 0.5 million tons as harvest results indicate lower-than-expected yields in Siberia. Production is also lowered 0.5 million tons each for Azerbaijan and Kazakhstan as the latest reports confirm higher-than-expected yield losses from the extended drought across the region.
World wheat trade for 2010/11 is raised this month with imports up 0.5 million tons each for China, Egypt, and South Korea, mostly reflecting higher reported shipments so far for the marketing year. Imports are also raised for Azerbaijan and the United States. Turkey's imports and exports both are reduced 1 million tons as short supplies of FSU-12 wheat limit Turkey's wheat imports and flour exports. Kazakhstan exports are lowered 0.5 million tons with the smaller crop. Exports are raised 1.0 million tons each for Argentina and EU-27 with larger available supplies in Argentina and the strong pace of EU-27 export licensing. Russia exports are raised 0.5 million tons as flour exports will now be allowed after December 31, 2010.
Global wheat consumption for 2010/11 is raised 2.5 million tons with much of the increase reflecting a 2.0-million-ton increase in China wheat feeding. Wheat feeding is also raised 0.5 million tons for Korea based on the pace of feed quality wheat imports. Feeding is lowered 1.0 million tons for Russia, but is offset by a 1.0-million-ton increase in food use. Global ending stocks for 2010/11 are projected 2.2 million tons lower with the largest reduction for China where stocks are lowered 3.4 million tons. Ending stocks are also lowered 1.0 million tons for Russia. Partly offsetting are higher projected ending stocks for Australia, Egypt, Argentina, and Paraguay.
RICE: U.S. rice production in 2010/11 is forecast at 241.6 million cwt, 0.7 million below last month due to a decrease in yield. Average yield is estimated at 6,669 pounds per acre, down 18 pounds from last month. Harvested area is unchanged at 3.62 million acres. Long-grain rice production is lowered 0.5 million cwt to 181.5 million, while combined medium- and short-grain production is down 0.2 million to 60.1 million. The changes on the use side are due mostly to a reduction in the average milling yield for 2010/11. The average U.S. 2010/11 rice milling yield is lowered 2 percent to 67.5 percent, the lowest in at least 50 years. The average milling yield is determined from Farm Service Agency warehouse stored loan data for long-, medium-, and short-grain rice. Unfavorable hot August weather reduced both field and milling yields in the South. A lower milling yield results in a higher use of rough rice. Domestic and residual use is raised 2 million cwt to a record 129.0 million, however, exports are unchanged at 119.0 million cwt. The export forecast on a milled-equivalent basis is lowered 2 percent from last month, as lower exports are expected to markets primarily in the Middle East. An increase in the long-grain export forecast (rough-equivalent basis) of 1.0 million cwt is offset by a decrease of 1.0 million in combined medium- and short-grain exports. Ending stocks are forecast at 49.8 million cwt, down 2.7 million from a month ago, but up 13.1 million from the previous year.
The long-grain, combined medium- and short-grain, and all rice season-average farm price forecasts are all unchanged from last month at a range of $10.50 to $11.50 per cwt, $17.30 to $18.30 per cwt, and $12.10 to $13.10 per cwt, respectively.
Global 2010/11 rice supply and use are lowered from a month ago. World 2010/11 production is forecast at a record 451.4 million tons, down 1.1 million from last month due mainly to decreases for WASDE-488-3
Burma, Pakistan, the Philippines, and South Korea, which is partially offset by an increase for Australia. Thailand's 2010/11 rice crop was lowered slightly as losses in the main-season crop from recent flooding are partially offset by an expected increase in the dry-season crop. The Philippines 2010/11 crop is lowered 0.3 million tons from last month due to the effects of Typhoon Megi, but is still up 0.7 million from last year's weather-reduced crop. Global 2010/11 exports are lowered by about 0.35 million tons from last month as expected declines in the United States, Pakistan, Burma, and Thailand, are partially offset by a substantial increase for Australia. Import forecasts are raised for Bangladesh and Indonesia, but lowered for the Philippines and Australia. Global ending stocks for 2010/11 are projected at 94.3 million tons, nearly unchanged from last month, but a decline of 1.1 million from the previous year.
SUGAR: Projected U.S. sugar supply for fiscal year 2010/11 is increased 218,000 short tons, raw value, from last month, due to higher imports more than offsetting lower beginning stocks and production. Sugar production is lowered 155,000 tons, based on lower forecast production of U.S. sugarbeets and Louisiana sugarcane. Imports from Mexico are increased 475,000 tons based on greater supplies and lower sugar use in Mexico. Total U.S. use is unchanged.
This month=s 2009/10 U.S. sugar supply and demand balance reflects final estimates of stocks, production, and use published in the Sweetener Market Data and final import data from the Foreign Agricultural Service. Total supplies are up 97,000 short tons from last month, while total use is up 199,000. Reported ending stocks of 1.5 million tons are down 102,000 from last month=s estimate. For Mexico, 2009/10 fiscal year government data increase supply 77,000 metric tons and decrease use 245,000. WASDE-488-4
LIVESTOCK, POULTRY, AND DAIRY: The forecast of total U.S. meat production is raised for 2010 and 2011. Production forecasts for all major meats are raised for 2010. Beef production is raised on higher steer and heifer slaughter and the pork production increase reflects exceptional gains in carcass weights. Broiler hatchery data points toward continued gains in broiler production as the number of eggs set and chicks placed are large. The rate of decline in 2010 turkey production is slower than previously forecast. For 2011, production forecasts for beef, pork, and broilers are increased. The beef production increase largely reflects slaughter of the higher-than-expected number of cattle placed on feed during the third quarter of 2010. Pork production is forecast higher in early 2011 as some of the weight gains seen in late 2010 carry into 2011. However, the increase in weights is expected to be moderated by higher costs of feed during 2011. Broiler production is also forecast higher in early 2011 as the sector carries its current expansion into 2011. However, higher expected feed costs are expected to slow the rate of increase later in the year. The turkey production forecast for 2011 is unchanged from last month as is the egg production forecast.
The beef import forecast is lowered for 2010 as the pace of imports to date is relatively slow but the forecast for 2011 is unchanged. Beef exports in both 2010 and 2011 are raised on stronger growth to Asian markets. The forecast for pork imports is raised for both 2010 and 2011 on strong shipments from several markets. The pork export forecast is lowered for 2010 based on the pace of exports but the forecast for 2011 is unchanged. The poultry export forecast is reduced on weaker third-quarter data but the forecast for 2011 is unchanged from last month.
The cattle price forecasts for 2010 and 2011 are raised to reflect continued strong demand for cattle. Hog prices are forecast lower on larger forecast pork supplies. The broiler price forecast is unchanged. Egg prices for 2010 are forecast higher as prices recovered from their late summer decline but the 2011 forecast is unchanged.
Forecast milk production for 2010 is unchanged from last month. However, for 2011 production is lowered from last month as forecast cow numbers are reduced from last month. Milk per cow is adjusted slightly higher in early 2011 but higher feed prices and lower forecast milk prices limit the rate of growth in 2011. Exports in 2010 are forecast higher due to strong growth in butter, cheese, and fluid milk/cream. For 2011, continued global economic recovery and a favorable exchange rate should support exports. Revisions have been made to historical export aggregations, resulting in higher estimated exports. Import forecasts are raised on the strong pace of imports.
Cheese and butter prices for both 2010 and 2011 are forecast lower. The 2010 forecast for nonfat dry milk is unchanged from last month but stronger expected exports support a higher forecast for 2011. The whey price forecast is unchanged. Both Class III and Class IV price forecasts for 2010 are lowered due to the lower cheese and butter price forecasts. The Class III price forecast is lowered for 2011 but the Class IV price forecast is raised as the higher nonfat price more than offsets the lower butter price forecast. The all milk price is forecast to average $16.30 to $16.40 per cwt for 2010 and $15.95 to $16.85 per cwt for 2011.
COTTON: The U.S. 2010/11 cotton supply and demand estimates include lower production, lower domestic mill use, and higher exports relative to last month. Production is lowered 455,000 bales to 18.4 million, as reductions for Texas are partially offset by increases in the Southeast and Delta. Domestic mill use is reduced 150,000 bales to 3.45 million in response to recent sharply higher prices. Exports are raised 250,000 bales to 15.75 million, based on increased foreign demand and extremely strong export sales to date. Ending stocks are reduced 500,000 bales to 2.2 million bales, the lowest since 1925. The forecast range for the marketing year average price received by producers of 74 to 86 cents per pound is raised 7 cents on both ends. The midpoint of the range, if realized, would be the highest price since the Civil War.
The 2010/11 world cotton forecasts show lower consumption and ending stocks compared with last month, stemming from reduced supplies. Beginning stocks are reduced 3.0 million bales in China, as WASDE-488-5
the 2009/10 balance sheet is revised to reflect the shortages in mill inventories that have become apparent in recent weeks (see http://www.usda.gov/oce/commodity/wasde/index.htm for a detailed explanation). World production is reduced 1.4 million bales, as reductions for China, the United States, Pakistan, Greece, and Turkey are partially offset by increases for Brazil, Australia, and Uzbekistan. With supplies insufficient to meet demand, world consumption of 116.8 million bales is reduced 3 percent from last month and 1.4 percent from last season. Relative to last month, consumption is reduced in China, Bangladesh, Indonesia, Pakistan, Thailand, the United States, Vietnam, Brazil, and Turkey; these reductions are partially offset by an increase for India, where consumption is expected to benefit from export restrictions. World trade is raised nearly 800,000 bales from last month, as a 2-million bale increase in imports by China is partially offset by lower imports by several other countries. World ending stocks are reduced 5 percent to 42.2 million bales. The world stocks-to-consumption ratios are reduced to 37 and 36 percent, respectively, in 2009/10 and 2010/11, the lowest since 1993/94.
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