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WHEAT: Projected U.S. ending stocks for 2016/17 are raised 38 million bushels as reduced supplies are more than offset by lower projected use. Production for 2016/17 is lowered 11 million bushels based on the latest estimate from the NASS September 30 Small Grains Annual Summary. Feed and residual use is reduced 70 million bushels to 260 million reflecting the September 1 stocks that indicated lower-than-expected June-August disappearance. Exports are raised 25 million bushels on increased competitiveness of U.S. wheat particularly in North Africa where the EU has lost some market share because of lower production and quality problems. The marketing year average price received by producers is raised $0.10 per bushel at the midpoint to a range of $3.50 to $3.90 on higher-than-expected NASS prices to date.
Global wheat supplies for 2016/17 are lowered 1.6 million tons on a 0.4-million-ton production decrease and lower beginning stocks. A 2.0-million-ton production decline for the EU is partially offset by a 1.0-million-ton increase for Canada and a 0.8-million-ton increase for Australia. The Australia increase is attributed to continued excellent growing conditions, and yields are projected to be record high. Global exports are raised 1.9 million tons led by a 1.0-million-ton increase for Australia, a 0.7-million-ton increase for the United States, and 0.5-million-ton increases each for Canada and Ukraine. Global export gains are partially offset by a 1.0-million-ton decrease for the EU on the projected supply reduction. Global use for 2016/17 is down 1.0 million tons led by reductions in feed use for the United States and the EU. With total supplies declining more than use, world ending stocks are reduced 0.7 million tons but remain record large.
COARSE GRAINS: This month’s 2016/17 U.S. corn outlook is for lower production, increased exports, reduced stocks, and higher prices. Corn production is forecast at 15.057 billion bushels, down 36 million from last month as a lower forecast yield more than offsets an increase in harvested area. Corn supplies for 2016/17 are down slightly to 16.845 billion bushels, as a lower crop more than offsets a small increase in beginning stocks based on the September 30 Grain Stocks report. Exports are raised 50 million bushels, reflecting current U.S. export commitments that are well above a year ago. Corn ending stocks are down 63 million bushels. The projected range for the season-average corn price received by producers is raised 5 cents on both ends to $2.95 to $3.55 per bushel.
Grain sorghum production is forecast 22 million bushels below last month, as a forecast 1.5-bushel per acre increase in yield to a record 77.2 bushels per acre is more than offset by lower harvested area, with the largest reduction in Texas. Barley production is raised 10 million bushels and oat production is down 12 million bushels based on the Small Grains report. Grain sorghum prices in 2016/17 are projected to average $2.80 to $3.40 per bushel, up 5 cents on both ends of the range.
Global coarse grain production for 2016/17 is forecast down 5.0 million tons to 1,314.8 million. This month’s 2016/17 foreign coarse grain outlook is for lower production, higher consumption, increased trade, and lower stocks relative to last month. Brazil corn production is raised on higher area, based on the latest Companhia Nacional de Abastecimento (CONAB) report indicating a forecast level of first crop corn area above prior expectations. Corn and barley production are lowered for the EU, while domestic feed demand and competitive world corn prices underpin larger projected imports. Russia barley production is down based on the latest government harvest reports.
Corn exports are raised for Brazil and Argentina, with larger projected supplies in the former and an expected increase in the relative competitiveness of both countries for the local marketing year that begins March 2017. Other large month-to-month increases in corn imports are forecast for Iran, Vietnam, and Mexico. Foreign corn ending stocks for 2016/17 are lowered 1.0 million tons, with the largest stock declines in Argentina and Ukraine. Global corn stocks are projected 2.7 million tons lower to 216.8 million, but are still record high.
RICE: The 2016/17 U.S. rice crop is reduced 1.1 million cwt to 236.0 million on lower yields. The average yield forecast is lowered 37 pounds per acre to 7,532. A reduction in Arkansas is partially offset by increases in California, Mississippi, and Texas. The long-grain crop is reduced 0.9 million cwt to 177.0 million but still the largest since the 2010/11 record. Medium- and short-grain production is lowered 0.3 million cwt to 59.0 million. Total rice exports are down 3.0 million cwt to 112.0 million reflecting a slow export pace to date and increased international competition. Ending stocks are raised 1.9 million cwt to 61.0 million, the largest since 1985/86. The all rice season-average farm price is unchanged at a range of $10.20 to $11.20 per cwt.
Global rice supplies for 2016/17 are raised 4.5 million tons on higher beginning stocks and production. Production is increased 1.5 million tons to 483.3 million and remains record large. Thailand production for 2016/17 is raised 1.6 million tons on beneficial precipitation and good reservoir recharge for irrigation, which led to increased dry-season rice area. Egypt and Australia production are raised 0.6 million tons and 0.2 million tons, respectively. However, these increases are partially offset by a 0.5-million-ton reduction for Brazil and a 0.3-million-ton reduction for Sri Lanka. Global exports for 2016/17 are raised 0.3 million tons and global consumption for 2016/17 is lowered 0.6 million tons. With total supplies rising and total use declining, world ending stocks are raised 5.1 million tons to 120.7 million.
OILSEEDS: U.S. oilseed production for 2016/17 is projected at 126.2 million tons, up 1.9 million from last month with increased soybean, canola, and sunflowerseed production partly offset with lower cottonseed and peanuts. Soybean production is forecast at 4,269 million bushels, up 68 million mainly on higher yields. The soybean yield is projected at 51.4 bushels per acre, up 0.8 bushels from the September forecast. Soybean supplies for 2016/17 are projected 70 million bushels above last month with slightly higher beginning stocks adding to higher production.
U.S. soybean exports for 2016/17 are projected at 2,025 million bushels, up 40 million with increased supplies. An offsetting reduction is forecast for Argentina soybean exports. With soybean crush unchanged, ending stocks for 2016/17 are projected at 395 million bushels, up 30 million from last month. The soybean price is projected at $8.30 to $9.80 per bushel, unchanged from last month. Soybean meal and soybean oil price projections are also unchanged at $300 to $340 per short ton and 30.5 to 33.5 cents per pound, respectively.
Global oilseed production for 2016/17 is projected at 548.1 million tons, up 3.6 million from last month mainly on higher soybean production. Global soybean production is projected at a record 333.2 million tons, up 2.8 million with higher forecasts for the United States, Brazil, and Canada partly offset by a reduction for Russia. Brazil soybean production is projected at a record 102.0 million tons on higher area reflecting the most recent CONAB survey. The soybean crop in Canada is raised on higher expected area and yields. The soybean crop in Russia is projected lower on the most recent harvest results. Rapeseed production for Canada is projected at 18.5 million tons, up 0.5 million based on the most recent analysis from Statistics Canada. Rapeseed production is also increased for Australia on higher expected yields. Other oilseed production changes include higher sunflowerseed production for Turkey, higher cottonseed production for Australia, and lower cottonseed production for Brazil. Malaysia palm oil production is reduced for 2015/16 based on final production data, and for 2016/17 with the impact of reduced rainfall continuing to affect yields.
With increased global beginning stocks and production, 2016/17 oilseed supplies are projected 1 percent higher than last month. With crush mostly unchanged, global oilseed stocks for 2016/17 are projected at 88.1 million tons, up 5.3 million mainly on higher soybean stocks in the United States, Brazil, Argentina, and China.
SUGAR: The projection of beet sugar production from the 2016 sugarbeet crop is increased by 80,000 short tons, raw value (STRV) due to higher crop yields reported in the NASS October Crop Production that are only partially offset by reduced harvested area. Fiscal year 2016/17 beet sugar production is further increased by 100,000 STRV and 2015/16 is reduced by the same amount due to slower-than-anticipated harvesting in Minnesota and North Dakota, shifting beet sugar production expected in September into the next fiscal year. Beet sugar production for 2016/17 is therefore projected at 5.468 million STRV, an increase of 180,000 over last month. Florida cane sugar production for 2016/17 is reduced 25,100 STRV based on reduced sugarcane harvested area forecast by NASS.
Cane sugar production in Louisiana for 2015/16 is increased 15,542 STRV based on estimated production occurring in September, but is reduced in Hawaii by 10,000 based on a lower production pace-to-date than expected.
Imports for 2015/16 are reduced by 40,756 STRV. The raw sugar tariff-rate quota shortfall is increased by 35,069 STRV to 125,057 based on full fiscal year data reported by U.S. Customs and Border Protection (Customs). Imports from calendar-year Free Trade Agreement quotas are reduced by 30,603 STRV for 2015/16 but with that portion totaling 26,656 attributable to Colombia now expected to enter in the first quarter of 2016/17. Re-export imports are increased 20,916 STRV based on Customs reporting. Imports from Mexico are increased by 3,000 STRV and high-tier tariff imports by 1,000.
Based on 2015/16 pace-to-date, deliveries for human consumption are reduced by 50,000 STRV to 11.950 million and deliveries of re-export import sugar for food product exports are increased by 20,000 to 150,000. Deliveries for human consumption in 2016/17 are reduced by 30,000 STRV to 12.050 million in line with the downward adjustment for 2015/16. Ending stocks for 2016/17 are projected residually at 1.762 million STRV, implying an ending stocks-to-use ratio of 14.4 percent.
Mexico exports to the United States for 2015/16 are increased 2,567 metric tons (MT) based on U.S. import data. Production for 2016/17 is increased 200,000 MT to 6.300 million based on direct-source information gathered by USDA’s Foreign Agricultural Service post in Mexico City. The ending stock total for 2016/17 is unchanged at 1.248 million MT, an amount projected to meet sugar supply requirements of domestic consumption and exports to the U.S. market for the first three months of the following marketing year. Exports for 2016/17 to non-U.S. destinations are projected residually at 421,396 MT.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total red meat and poultry production for 2016 is reduced from last month as slightly higher beef and pork production is more than offset by lower broiler production. No change is made to turkey production. Beef production is raised on higher expected slaughter although carcass weights are reduced slightly. Pork production for 2016 is raised on the pace of third quarter slaughter. Broiler production is lowered as recent production data points towards continued slow growth in bird weights. For 2017, the total red meat and poultry product forecast was raised, primarily due to higher pork production. Beef production is raised based on expectations of higher first-quarter slaughter, but the broiler production forecast was lowered on more moderate growth in production continuing from 2016. The turkey production forecast was unchanged. Egg production forecasts for 2016 or 2017 were raised on continued growth in table-egg laying flocks.
Beef import and export forecasts for 2016 and 2017 were raised as slightly larger supplies of beef in a number of exporting countries support higher imports and lower U.S. beef prices make the United States more competitive in world markets. The pork export forecast for 2017 is raised on expectations of higher sales to Asia. Broiler and turkey export forecasts are unchanged for 2016 and 2017.
Cattle, hog, broiler, and turkey prices for the last quarter of 2016 are reduced from last month as supplies of product are large. For 2017, the continued large supplies of beef, pork, and broiler meat are expected to pressure prices through the year. Egg prices are also reduced for both 2016 and 2017.
The milk production forecasts for 2016 and 2017 are raised from last month as the cow inventory has grown more rapidly than previously expected. The higher cow inventories appear to reflect growth in herds supplying expanding dairy product facilities. Import forecasts for 2016 and 2017 are raised on higher expected imports of butter and several other dairy products. Exports are forecast higher as increases in Oceania prices and relatively low U.S. prices are expected to make the United States more competitive in world markets. Ending stocks are reduced as lower prices encourage increased demand from both export and domestic markets.
Cheese and butter price forecasts for 2016 and 2017 have been lowered due to higher expected milk supplies. However, nonfat dry milk (NDM) and whey will likely benefit from increased competitiveness in export markets, and stronger exports will help support prices of those products. Thus, price forecasts for NDM and whey are raised from last month. Class III and Class IV prices are lowered from last month as lower cheese prices more than offset the higher whey price in the Class III calculation and the lower butter price outweighs the NDM price increase in the calculation of the Class IV price. All milk prices are forecast lower at $15.80 to $15.90 per cwt for 2016 and $15.55 to $16.45 per cwt for 2017.
COTTON: The 2016/17 U.S. cotton supply and demand estimates show marginally lower production, larger exports, and lower ending stocks relative to last month. Production is reduced 108,000 bales, mainly in Texas. Domestic mill use is unchanged from last month, but the export forecast is raised to 12.0 million bales, due mainly to higher world import demand. Ending stocks are now projected at 4.3 million bales. The resulting stocks-to-use ratio of 28 percent is slightly below last season, but is still above the preceding six seasons. The forecast range for the marketing year average farm price is 59.0 to 69.0 cents per pound; the midpoint of 64.0 cents per pound is 1 cent above last month’s projection.
The global cotton supply and demand forecasts for 2016/17 include sharply lower beginning and ending stocks. Beginning stocks are reduced nearly 2.0 million bales, as consumption estimates for China are raised for 2014/15 and 2015/16. The sale of more than 12 million bales from China’s recently completed reserve auctions amid rising domestic prices suggests the China mill demand was previously underestimated. Consumption is also raised for the previous two seasons in Bangladesh based on revised data (see http://apps.fas.usda.gov/psdonline/circulars/cotton.pdf for more information). World 2016/17 production is raised for Australia, partially offset by decreases for Brazil and the United States. Consumption is raised for China and Bangladesh, but is reduced for Uzbekistan. An increase of approximately 1.0 million bales in world trade mainly reflects higher imports for India and Bangladesh, and higher exports for Australia, the United States, and the African Franc Zone, partially offset by lower exports for Brazil. World ending stocks are now projected at 87.3 million bales.
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