WASDE Report for 12/9/11

Published on: 08:34AM Dec 09, 2011

WASDE Report for 12/9/11

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OILSEEDS: Total U.S. oilseed production for 2011/12 is projected at 91.0 million tons, down slightly due to a small reduction in cottonseed. Soybean exports are reduced 25 million bushels to 1.3 billion reflecting the slow pace of shipments and outstanding sales through November, and strong export competition from South America. Projected soybean crush is reduced 10 million bushels to 1.625 billion due to reduced domestic soybean meal consumption and a higher meal extraction rate. Soybean ending stocks for 2011/12 are projected at 230 million bushels, up 35 million from last month.

Prices for soybeans and products are all projected lower this month. The U.S. season-average soybean price range for 2011/12 is projected at $10.70 to $12.70 per bushel, down 90 cents on both ends of the range. The soybean meal price is projected at $280 to $310 per short ton, down 30 dollars on both ends of the range. The soybean oil price range is projected at 50.5 to 54.5 cents per pound, down 2.5 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 457.6 million tons, up 2.8 million tons from last month. Foreign oilseed production accounts for most of the change with increases projected for soybeans, rapeseed, sunflowerseed, and peanuts. Global soybean production is projected at 259.2 million tons, up 0.3 million. Increased production for Canada and India is only partly offset by a lower projection for China. Global rapeseed production is projected higher this month mainly due to gains for Canada. Canada rapeseed production is raised 1.3 million tons to 14.2 million based on the latest survey results from Statistics Canada. Higher yields account for most of the change. Rapeseed production for China is reduced 0.3 million tons due to lower yields in line with the latest indications from the China National Grain and Oils Information Center. Other changes include increased sunflowerseed production for Ukraine and increased peanut production for China and India.

Global oilseed trade is projected at 114 million tons, up 0.7 million from last month. Increased soybean exports from Brazil, increased rapeseed and soybean exports from Canada, and increased peanut exports from China and India account for most of the gains. Global oilseed ending stocks are projected at 75.5 million tons, up 1.6 million from last month mainly reflecting increased soybean stocks in the United States and increased rapeseed stocks in Canada.

WHEAT: U.S. wheat ending stocks for 2011/12 are projected 50 million bushels higher with reduced prospects for exports this month. Exports are lowered 50 million bushels with reductions projected for Hard Red Winter, Soft Red Winter, and White wheat. Larger supplies in several major exporting countries and relatively strong domestic prices, supported by the tight domestic corn supply and use situation, are expected to limit opportunities for U.S. wheat in world trade. Ending stocks for 2011/12, at 878 million bushels, are projected to be up 16 million from last year, but down 98 million from the recent high in 2009/10. The 2011/12 season-average farm price is lowered slightly to $7.05 to $7.55 per bushel compared with $7.05 to $7.75 last month.

Global wheat supplies for 2011/12 are projected 9.3 million tons higher with larger beginning stocks in Australia and Argentina and a 5.7-million-ton increase in foreign production. Beginning stocks for Australia are raised for 2011/12 with a 1.9-million-ton increase in 2010/11 production based on recently released data from the Australian Bureau of Statistics. Argentina beginning stocks for 2010/11 and 2011/12 are raised with revisions to 2009/10 and 2010/11 production based on the latest indications of available supplies and usage.

Global wheat production for 2011/12 is projected at a record 689.0 million tons, up 37.4 million from 2010/11, and 3.5 million higher than the previous record in 2009/10. Australia production for 2011/12 is raised 2.3 million tons in line with the latest government estimate. Another year of adequate to abundant precipitation across the country's southern and eastern growing areas and a recovery in production in Western Australia pushes production to a record 28.3 million tons. Argentina production is raised 1.5 million tons with higher expected harvested area and yields with recent improvements in late-season growing conditions. Production for Canada is raised 1.1 million tons based on the latest estimate from Statistics Canada. Production is raised 0.9 million tons for China based on the recently released estimate from China's National Bureau of Statistics. Other 2011/12 production changes this month are smaller and mostly offsetting.

Larger world supplies of wheat and competitive prices relative to corn boost prospects for 2011/12 world wheat trade. Global imports are raised 1.4 million tons with increases for several Asian countries where wheat feeding is expected to be higher including South Korea, Japan, the Philippines, Thailand, and Vietnam. Wheat imports are also raised for Mexico where tight domestic corn supplies are boosting demand for imported feed quality wheat. Partly offsetting is a reduction for Syria. Exports are raised 2.5 million tons for Australia and 1.0 million tons for Argentina with larger supplies and indications that exports from both countries remain very competitive with Black Sea and North American supplies. Exports are lowered 1.0 million tons for Ukraine and 1.4 million tons for the United States.

Global wheat consumption for 2011/12 is raised 3.4 million tons on higher expected foreign wheat feeding. In addition to the countries mentioned above, wheat feeding is also increased for Australia, China, Kazakhstan, and Ukraine. Global ending stocks are projected 5.9 million tons higher with the largest increases in Argentina, the United States, Canada, Australia, Ukraine, and China. At the projected 208.5 million tons, global wheat stocks would be the largest in 12 years.

COARSE GRAINS: U.S. feed grain ending stocks for 2011/12 are projected slightly higher with a small decrease in domestic corn use and a small increase in oats imports. Corn food, seed, and industrial use is lowered 5 million bushels with early marketing-year corn use for sweeteners down slightly year on year. Projected corn ending stocks rise 5 million bushels to 848 million. Oats imports are increased 5 million bushels with the strong pace reported in recent months and larger production in Canada. Ending stocks for oats are raised the same amount. Sorghum exports are reduced 20 million bushels reflecting the continued slow pace of sales and shipments and increased buying of feed quality wheat by Mexico. Feed and residual use for sorghum is raised an offsetting 20 million bushels.

The 2011/12 season-average farm price for corn is projected 30 cents lower on each end of the range to $5.90 to $6.90 per bushel. Corn prices received by producers have been reported 40 to 50 cents per bushel below prevailing cash market bids reflecting apparent deliveries of grain that was forward priced below $6 per bushel ahead of planting this past spring. Declines in futures prices since early November have also tempered the outlook for seasonal price gains over the coming months. The sorghum farm price is lowered 30 cents on each end of the range to $5.70 to $6.70 per bushel. The barley farm price is lowered to $5.20 to $5.80 per bushel compared with $5.35 to $6.05 last month as reported prices for malting barley continue to fall short of earlier expectations. The oats farm price range is narrowed 5 cents on each end to $3.20 to $3.60 per bushel.

Global coarse grain supplies for 2011/12 are projected 7.4 million tons higher as lower beginning stocks for corn and barley are more than offset by an 8.5-million-ton increase in corn production, mostly reflecting higher output from China. Global corn beginning stocks for 2011/12 are reduced 0.8 million tons with a downward revision to 2010/11 production for South Africa. Global barley beginning stocks for 2011/12 are lowered 0.8 million tons mostly reflecting the lower 2010/11 Australia barley production estimate recently released by the Australian Bureau of Statistics.

Global corn production for 2011/12 is projected at a new record high of 867.5 million tons, despite a 3.5-million-ton decline year-to-year in the United States. Foreign corn production is expected to be up 43.4 million tons from 2010/11. China 2011/12 production is raised 7.3 million tons this month based on the recently released estimate from the National Bureau of Statistics. Slightly higher area and a 3 percent increase in yields from the previous forecast boost this year's crop to a record 191.8 million tons. This year's yield estimate is up 3 percent (3 bushels per acre) from the previous record in 2008/09 and up 9 percent (8 bushels per acre) from the recent low in 2009/10. Weather was generally favorable for this year's crop; record yields were reported despite summer conditions in the northeast growing areas that were somewhat warmer and drier than in 2008/09. Corn production is also raised 1.0 million tons for EU-27 and 0.7 million tons for Canada based on the latest government reports.

World coarse grain trade for 2011/12 is mostly unchanged this month with corn and sorghum imports and exports down slightly, but partly offset by small increases for barley. Corn imports are lowered 0.5 million tons for EU-27 with the larger crop and lower expected shipments from Serbia. Lower sorghum imports for Mexico and an increase in exports for Australia mostly offset the reduction in expected U.S. shipments. Barley exports are raised for Russia and Argentina countering a reduction for Australia and higher imports for Algeria. Global corn consumption is raised mostly reflecting a 2.0-million-ton increase in China corn feeding. Global corn ending stocks are projected 5.6 million tons higher, mostly on increased stocks in China. At the projected 127.2 million tons, world ending stocks remain at a 5-year low.

SUGAR: Projected U.S. sugar supply for fiscal year 2011/12 is decreased 15,000 tons, raw value, from last month, to reflect revised 2010/11 carryover stocks in Sweetener Market Data.

LIVESTOCK, POULTRY, AND DAIRY: The 2012 forecast of total red meat and poultry production is reduced from last month as lower forecast broiler production more than offsets a higher pork production forecast. Beef and turkey production forecasts are unchanged. Broiler production is forecast lower, largely due to slower expected growth in average bird weights in the first part of the year. Pork production is forecast higher as slightly higher carcass weights are expected. USDA will release its Quarterly Hogs and Pigs report on December 23 which will provide an indication of producer farrowing intentions into the first part of 2012. For 2011, beef and broiler production forecasts are lowered, but the pork production forecast is raised. Egg production is forecast higher in the last quarter of 2011 and for 2012.

The beef import forecast is raised for 2011 based on higher-than-expected third-quarter data, but is unchanged for 2012. Pork imports are lowered for 2011 and 2012. Beef, pork, and poultry exports are raised for 2011 and pork, broiler, and turkey exports are raised for 2012.

Cattle prices are forecast higher for the remainder of 2011 and through 2012 as demand strength is expected to carry into 2012 in the face of tight cattle supplies. Hog prices are unchanged for 2012. Broiler prices are raised for 2011 and 2012 because of lower production.

Milk production forecasts for 2011 and 2012 are raised slightly, reflecting higher growth in milk per cow and slightly more cows in 2011. Fat basis imports are raised for 2011 and skim-solids basis imports are forecast slightly higher in 2012. Exports are forecast higher for 2011.

For 2011, cheese and whey prices are unchanged, but butter and nonfat dry milk (NDM) price forecasts are reduced. Thus, the Class III price forecast is unchanged but the Class IV price is reduced. Cheese and butter prices for 2012 are lowered from last month but the whey price is raised. The range of the NDM price is narrowed. As a result of the higher whey price, the Class III price is raised, and the lower butter price results in a reduction in the Class IV price forecast. The all milk price forecast is forecast at $20.05 to $20.15 per cwt for 2011, and $18.10 to $18.90 per cwt for 2012.

COTTON: The 2011/12 U.S. cotton supply and demand estimates include lower production, domestic mill use, and ending stocks compared with last month. Production is reduced 473,000 bales due to decreases in all regions except the far West. Domestic mill use is reduced 200,000 bales based on lower-than-expected use in recent months. The export estimate remains at 11.3 million bales. Ending stocks are now forecast at 3.5 million bales, or 23.5 percent of total use. The forecast marketing year average price received by producers of 85-95 cents per pound is narrowed 1 cent on each end of the range.

Lower consumption is boosting forecast 2011/12 world ending stocks by 2.7 million bales this month. Beginning stocks are raised nearly 300,000 bales and world production is forecast nearly 500,000 bales lower, due mainly to the reduced forecast for the U.S. crop. World consumption is reduced sharply, reflecting continued weak mill demand owing to an uncertain world economic outlook and a loss of fiber share to polyester. Consumption is lowered for most major world cotton spinners and includes a 1.0-million-bale reduction for India and reductions of 0.5 million bales for both China and Turkey. World trade is revised up slightly, despite lower world consumption, due to strong import demand by China, which is supported by purchases for the national reserve. World ending stocks are now forecast at 57.7 million bales, an increase of 27 percent from 2010/11, and accounting for 52 percent of world consumption.

RICE: No changes are made to the U.S. 2011/12 all rice and rice-by-type supply and use projections. The 2011/12 long-grain, season-average farm price range is projected at $13.50 to $14.50 per cwt, unchanged from last month. The combined medium- and short-grain farm price range is projected at $15.50 to $16.50 per cwt, unchanged from a month ago. The all rice season-average farm price is forecast at $14.00 to $15.00 per cwt, unchanged from last month.

World 2011/12 rice supply and use projections are lowered from a month ago. Global rice production is projected at a record 460.8 million tons, but down slightly due primarily to lower forecasts for Brazil and China, which is partially offset by an increase for Vietnam. The China rice crop is projected at a record 140.5 million tons, down 0.5 million from last month, based on China's National Bureau of Statistics (NBS) report published on December 2. NBS reported harvested area at 29.9 million hectares, slightly above the previous year, and a record yield at 6.70 metric tons per hectare, up 2 percent from 2010/11. The Brazil crop is lowered due to a reduction in harvested area based on government indications. The Vietnam crop is raised due to both an increase in forecast area and yield, mostly resulting from a forecast larger autumn crop. Slight decreases are made to both global consumption and trade. Global 2011/12 ending stocks are projected at 99.5 million tons, down 1.1 million from last month, but up 2.8 million from 2010/11. The change in ending stocks is due primarily to lower stocks projected for Indonesia. Indonesia's 2010/11 rice crop is lowered 1.6 million tons based largely on lower area in a report received from the Agricultural Counselor in Jakarta. The smaller crop led to a decrease in estimated 2010/11 ending stocks which is carried into 2011/12.

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