WASDE Report for 8/12/14
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OILSEEDS: U.S. oilseed production for 2014/15 is projected at 113.7 million tons, up 0.6 million from last month mainly due to a higher soybean production forecast. Soybean production for 2014/15 is forecast at 3,816 million bushels, up 16 million due to a higher yield. Harvested area is forecast at 84.1 million acres, unchanged from July. The first survey-based soybean yield forecast is a record 45.4 bushels per acre, 0.2 bushels above last month and 2.1 bushels above last year. Soybean supplies for 2014/15 are projected slightly above last month based on the higher production forecast. With minimal supply gains, soybean exports and crush are unchanged, leaving ending stocks projected at 430 million bushels.
The U.S. season-average soybean price for 2014/15 is forecast at $9.35 to $11.35 per bushel, down 15 cents on both ends. Soybean meal and oil prices are forecast at $340 to $380, down 10 dollars at the midpoint. Soybean oil prices are forecast at 35 to 39 cents per pound, down 1 cent at the midpoint.
U.S. soybean balance sheet changes for 2013/14 include reduced imports and increased exports. Imports are lowered 5 million bushels to 80 million based in part on revised import data for September – December 2013 from the U.S. Department of Commerce. Exports are raised 20 million bushels to 1,640 million reflecting both revised export data for September through December 2013 from the Department of Commerce and inspections data for July 2014. These changes are offset with lower residual use, leaving ending stocks unchanged at 140 million bushels. With these changes, the 2013/14 soybean stocks-to-use ratio is projected at 4.2 percent, which if realized would be the lowest in more than 40 years.
Global oilseed production for 2014/15 is projected at 521.8 million tons, slightly below last month. Gains for rapeseed and cottonseed are more than offset by reductions for soybeans, sunflowerseed, and peanuts. Higher soybean production for the United States is offset by a reduction for India where the delayed monsoon results in lower planted area. Rapeseed production is raised for China, EU, and Ukraine. These gains are partly offset by a smaller crop projected for Canada with lower area resulting from flooding in parts of Saskatchewan and Manitoba. Other changes include lower sunflowerseed production for Russia, reduced peanut production for China, and increased cottonseed production for India.
WHEAT: Projected U.S. wheat supplies for 2014/15 are raised this month mostly with an increase in forecast Hard Red Winter (HRW) wheat production as well as smaller increases for Soft Red Winter (SRW), Hard Red Spring (HRS), and Durum. Northern parts of the HRW belt have substantially higher yields than the drought damaged southern and central plains. The largest HRW increases are in Colorado and Nebraska. After a delay in planting, HRS wheat has had very good growing conditions and yields are forecast well above average. Feed and residual use for all wheat in 2014/15 is raised 10 million bushels to 155 million due to the larger supplies. All wheat exports for 2014/15 are increased 25 million bushels because of the larger HRW crop. The projected season-average farm price range is lowered 30 cents at the midpoint to $5.80 to $6.80 per bushel.
World wheat production for 2014/15 is raised 10.9 million tons to a record 716.1 million. The largest foreign increases are 6.0 million tons for Russia, 2.0 million tons for China, and 1.0 million tons for Ukraine. The Russia and Ukraine increases are based on harvest reports that indicate very high winter wheat yields, especially for Russia. The China increase reflects the latest government estimates for summer harvested grains. Production is also raised 0.6 million tons for Belarus and 0.4 million tons for Moldova.
Global wheat consumption is raised 6.9 million tons due mainly to increased prospects for wheat feeding. The biggest feeding increase is for EU, which is raised 2.5 million tons. Excessive harvest-time precipitation in several European production regions has increased the quantity of feed-quality wheat. Russia wheat feeding is raised 1.0 million tons, and Ukraine and Belarus are each raised 0.5 million tons due to increased production in those countries. Smaller feeding increases are made for Philippines, Moldova, and Israel.
Global wheat trade for 2014/15 is nearly unchanged with increases in Russia and the United States offset by reductions in EU and several other countries. The changes reflect larger crops in Russia and the United States as well as quality problems in EU. India exports are lowered 0.5 million tons because of competition, especially from lower quality wheat in Ukraine and southeastern EU. China and Russia imports are lowered 1.0 million tons and 0.5 million tons, respectively, because of increased production. Egypt imports are lowered 0.5 million tons due to changes in its bread subsidy program that are expected to reduce waste. Iran imports are raised 0.5 million tons reflecting government announced purchases. With supplies rising faster than use, global ending stocks are raised 3.4 million tons and remain at a 3-year high.
COARSE GRAINS: Projected 2014/15 U.S. feed grain supplies are raised this month with higher production forecasts for corn, sorghum, barley, and oats. Corn production for 2014/15 is forecast 172 million bushels higher at a record 14,032 million bushels. The first survey-based corn yield forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection. Sorghum production is forecast 19 million bushels higher with the forecast yield 3.0 bushels per acre higher than last month’s projection. Small yield increases also boost barley and oats production slightly.
Corn supplies for 2014/15 are projected at a record 15,243 million bushels with the increase in production partly offset by a 65-million-bushel reduction in beginning stocks. Corn use for ethanol and exports are raised 45 million bushels and 20 million bushels, respectively, for 2013/14, based on reported data to date. Projected corn use for 2014/15 is higher with use for ethanol and exports each raised 25 million bushels, and feed and residual disappearance 50 million bushels higher with the larger crop. Projected ending stocks for 2014/15 are raised slightly to 1,808 million bushels. The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $3.55 to $4.25 per bushel.
Sorghum supplies for 2014/15 are projected 4 million bushels higher as a 15-million-bushel increase in 2013/14 exports lowers 2014/15 beginning stocks, mostly offsetting the higher forecast production. Projected sorghum exports for 2014/15 are raised 10 million bushels. The season-average farm price for sorghum is also projected 10 cents lower at both ends of the range to $3.30 to $4.00 per bushel.
Global coarse grain supplies for 2014/15 are projected 4.9 million tons higher, mostly reflecting larger expected corn crops in the United States and EU and increased barley production for FSU-12. The smaller projected carryin for the United States partly offsets this month’s 6.6-million-ton increase in global coarse grain output. EU corn production is raised 1.4 million tons after abundant rainfall and favorable temperatures during July. FSU-12 barley production is raised 3.1 million tons with a 2.0-million-ton increase for Russia and smaller increases for Belarus and Ukraine. Barley production is also raised 0.3 million tons for EU. Reduced prospects for corn, sorghum, and millet, with the delayed monsoon, lower India total coarse grain production 2.7 million tons, partly offsetting increases elsewhere. Turkey corn production is also lowered 0.3 million tons.
Global coarse grain consumption for 2014/15 is raised this month with a 2.3-million-ton increase in world corn use. Higher corn use in the United States accounts for most of the increase. Corn consumption is lowered 2.0 million tons for EU as heavy summer rains have reduced wheat quality across the region, raising prospects for wheat feeding. Corn food use is reduced 0.5 million tons for India with the smaller crop outlook. Higher projected corn use for Egypt, Saudi Arabia, South Africa, Algeria, and Taiwan partly offset these reductions. Corn imports are lowered for EU, but raised for Turkey, Saudi Arabia, Taiwan, Lebanon, and Algeria. Global barley trade is raised with higher imports for Turkey and higher exports for Russia and Ukraine. Global 2014/15 coarse grain ending stocks are projected 2.7 million tons higher reflecting larger barley ending stocks. Global corn ending stocks are lowered slightly.
SUGAR: The Mexico 2013/14 estimate for sugar production is reduced by 5,000 metric tons (MT) to 6.020 million, based on end-of-harvest reporting from Mexican authorities. The 2013/14 estimate of exports is increased by 50,000 MT based on pace-to-date of exports to the United States. Deliveries for consumption are reduced by 106,000 MT, based on a slowdown in the pace through June. With 2014/15 beginning stocks 51,000 MT higher than last month, imports in 2014/15 are reduced by that same amount to meet consumption needs until the full start of the 2014/15 harvest in mid-December. There are no changes to 2014/15 production, deliveries, total exports, or ending stocks. Exports to the United States are reduced by 575,000 MT based on signed contracts confirmed by the USDA committing Mexico to ship to non-U.S. destinations in that amount in 2014/15.
The U.S. 2013/14 cane sugar production is lowered by 25,000 short tons, raw value (STRV) based on a slow harvest pace in Hawaii. Tariff-rate quota (TRQ) shortfall for 2013/14 is increased by 87,547 STRV and 2013/14 imports from Mexico are increased by 58,423 for a net import reduction of 29,000. For 2014/15, beginning stocks are reduced 54,000 STRV, cane sugar production is increased by 116,000 based on processors’ reporting, and imports from Mexico are reduced by 672,000 to 1.205 million. With no other changes, ending stocks are projected at 837,000 STRV.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2014 is raised from last month. Production is raised for beef, pork, and broilers as lower feed prices encourage producers to raise animals to heavier weights. Turkey production is reduced slightly based on June production data. Egg production is reduced based on lower expected hatching egg production. For 2015, lower feed costs are expected to lead to higher cattle, hog, and broiler weights, but in the case of beef, reduced feedlot numbers are expected to lead to lower slaughter, more than offsetting any gains from carcass weights. Broiler producers are also expected to increase bird numbers more rapidly than previously forecast during 2015 as returns are expected to be more favorable. Egg production forecasts are unchanged.
Forecasts for 2014 and 2015 beef imports are raised as demand for processing grade beef remains strong. Exports for 2014 and 2015 are raised as demand in a number of countries remains strong, despite high beef prices. Pork imports for 2014 and 2015 are raised slightly. Despite the closure of Russia to U.S. exports into 2015, pork export forecasts for 2014 and 2015 are raised as demand in other major markets is expected to grow. Broiler exports are reduced for 2014 and 2015 as Russia’s import ban will affect sales. Turkey export forecasts are raised for 2014, but are unchanged for 2015.
Cattle price forecasts for 2014 and 2015 are raised from last month on the strength of demand and continued tight supplies of fed cattle. The annual price forecast for hogs is unchanged for 2014, but is lowered for 2015 from last month on slightly weaker expected demand. The annual broiler price forecast for 2014 is lowered, but the price for 2015 is unchanged. The turkey price forecast for 2014 is raised based on July price data. The egg price forecasts for both 2014 and 2015 are raised as demand remains strong.
The milk production forecasts for 2014 and 2015 are raised slightly as lower feed costs are expected to support higher output per cow. Fat basis export forecasts for 2014 and 2015 are lowered as Russia’s ban on imports from a number of dairy exporting countries will likely increase competition in export markets. Fat basis imports are raised as supplies in competing exporters are expected to be large. The skim-solids export forecast is raised slightly for 2014, but is reduced in 2015 as competition increases. Skim-solids imports are unchanged from last month.
Butter prices and whey price forecasts are raised for 2014 with strength in butter prices expected to carry into 2015. Cheese prices and nonfat dry milk prices are forecast higher in 2014, but their price forecasts for 2015 are unchanged from last month. Class III and Class IV prices for 2014 are raised on stronger component product prices and the Class III price forecast for 2015 is raised reflecting strength in whey prices. The all milk price is raised to $23.55 to $23.75 per cwt for 2014, but remains unchanged at $19.75 to $20.75 per cwt for 2015.
COTTON: The U.S. 2014/15 cotton forecasts include higher production, exports, and ending stocks compared with last month. Beginning stocks are reduced 100,000 bales due to preliminary stocks indications for July 31, 2014. Production is raised 6 percent to 17.5 million bales in the first survey-based estimate of U.S. crop production, mainly on lower expected abandonment. Domestic mill use is unchanged, but exports are raised 500,000 bales to 10.7 million on stronger foreign import demand and the larger available supply. Ending stocks are now forecast at 5.6 million bales, 39 percent of total use, the largest stocks-to-use ratio since 2007/08. The forecast range for the marketing-year average price received by producers of 58-72 cents per pound is lowered on both ends, with the midpoint now forecast at 65 cents.
Revisions to the 2014/15 world cotton supply and demand balance sheet result in marginally lower global ending stocks compared with last month’s forecast. Beginning stocks are reduced 600,000 bales due to adjustments in 2013/14 for several countries. For 2014/15, production is raised for the United States, India, and Mexico, but lowered for Brazil and Australia. World consumption is raised about 1 percent from last month to 112.6 million bales, the highest level since 2010/11, as falling prices are anticipated to boost cotton’s share of textile fiber use. Ending stocks are now projected at 105.1 million bales, with stocks outside of China expected to grow by about 4 million bales from 2013/14.
RICE: U.S. 2014/15 total rice supplies are projected at 282.6 million cwt, up 2.8 million from last month on higher production. USDA's first survey-based forecast of the U.S. 2014/15 rice crop is 228.8 million cwt, up nearly 21 percent from the previous year. Average all rice yield is forecast at 7,560 pounds per acre, up 91 pounds per acre from last month’s projection, but down nearly 2 percent from last year’s record. Area harvested is unchanged at 3.03 million acres. Long-grain production is forecast at 169.3 million cwt and combined medium- and short-grain production at 59.5 million, up 0.3 million and 2.5 million from a month ago, respectively. The all rice import projection is 21.0 million cwt, down 9 percent from last year.
U.S. 2014/15 total rice use is projected at 243.0 million cwt, 3.0 million above last month, and 12 percent above the previous year. Total domestic and residual use and exports are forecast at 134.0 million cwt and 109.0 million, up 1.0 million and 2.0 million, respectively. Long-grain and combined medium- and short-grain exports are projected at 75.0 million and 34.0 million, respectively. U.S. all rice ending stocks for 2014/15 are projected at 39.6 million cwt, down 0.2 million from last month, but 21 percent above the previous year.
The 2014/15 U.S. long-grain rice season-average farm price is projected at $12.00 to $13.00 per cwt, unchanged from last month. The 2014/15 combined medium- and short-grain price is projected at $17.50 to $18.50 per cwt, up 50 cents per cwt from a month ago. The 2014/15 all rice price is projected at $13.80 to $14.80 per cwt, up 30 cents per cwt on each end of the range from last month.
The projected decrease in global 2014/15 total supply is greater than the drop in total use resulting in a decrease in world ending stocks. Global production is lowered 2.1 million tons to 477.3 million, still a record, due primarily to forecast reductions for Bangladesh, Brazil, Indonesia, and India, offset partially by an increase in the United States. India’s 2014/15 rice crop is lowered 1.0 million tons to 103.0 million, attributed mostly to a slower rate of planting of the kharif rice crop due to the late start of the monsoon and below normal precipitation in some rice growing areas. Global beginning stocks for 2014/15 are lowered 1.4 million tons due mostly to a 1.3-million-ton reduction for Indonesia—where the 2013/14 crop is lowered to 36.0 million tons. World 2014/15 consumption is reduced 0.3 million tons to 482.1 million, still a record. Global trade is lowered 0.3 million tons due mostly to a reduction in exports from India, partially offset by an increase in the United States. Global 2014/15 ending stocks are projected at 105.4 million tons, down 3.2 million from last month, and a decline of 4.7 million from the previous year. The largest stocks reductions from a month ago are in Bangladesh, Brazil, Indonesia, and India.
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