Published on: 16:21PM Oct 09, 2015

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WHEAT:  Projected U.S. ending stocks for 2015/16 are lowered 14 million bushels as decreased production more than offsets a decline in total use.  Production for 2015/16 is lowered 84 million bushels based on the latest estimate from the NASS September 30 Small Grains 2015 Summary.  Feed and residual use is lowered 20 million bushels reflecting the September 1 stocks that indicated lower-than-expected June-August disappearance.  Exports are lowered 50 million bushels to 850 million on a slow sales pace to date and continued lack of U.S. price competitiveness, particularly compared to Black Sea Countries and EU.  The projected range for the 2014/15 U.S. season-average farm price is narrowed 10 cents on both the high and low ends to $4.75 to $5.25 per bushel.  


Global wheat supplies for 2015/16 are raised 2.0 million tons, on both increased production and beginning stocks.  The biggest production increases are 1.0 million tons each for Australia and Canada, and 1.1 million tons for EU.  The Canada and EU increases are based on government reports and harvest progress.  Australia had sufficient sub-soil moisture that allowed it to withstand a drier-than-normal September; increased yield potential is supported by satellite imagery.  The United States had the largest production decline.  The global wheat crop is now projected at 732.8 million tons, the third consecutive record. 


World wheat exports for 2015/16 are raised 3.0 million tons with increases for several key U.S. competitors.  Ukraine is raised 1.5 million tons on a larger crop.  Canada exports are raised 1.0 million tons, and Australia, the EU, Kazakhstan, and Russia are each raised 0.5 million tons.  These increases are based on larger supplies and export pace to date.  Partly offsetting is a 1.4 million ton reduction for the United States and a 0.5 million ton decline for Argentina.  Imports are raised 1.0 million tons in Iran on the elimination of an import duty and 0.5 million tons in Syria because of distribution problems.  Total world usage is up fractionally, and ending stocks are raised 1.9 million tons to a record 228.5 million tons.  


COARSE GRAINS:  Projected 2015/16 U.S. feed grain production is down slightly this month with a small reduction for corn partly offset by increases for barley and oats.  Corn production is forecast 30 million bushels lower with harvested area lowered 437,000 acres.  Partly offsetting is a 0.5-bushel-per acre increase in the national average corn yield to 168.0 bushels per acre.  Estimated 2015/16 beginning stocks, from the September 30 Grain Stocks report, are nearly unchanged from last month’s projection.  Small revisions to food, seed, and industrial use and trade, based on the latest data, boost 2014/15 feed and residual use 17 million bushels.  


Projected U.S. corn usage for 2015/16 is unchanged this month.  Ending stocks are projected 31 million bushels lower to 1,561 million.  The 2015/16 season-average corn price received by producers is projected 5 cents higher on both ends to $3.50 to $4.10 per bushel.


Global coarse grain supplies for 2015/16 are projected 8.3 million tons lower mostly on reduced foreign corn beginning stocks and production.  Global corn beginning stocks are lowered 1.2 million tons, reflecting higher 2014/15 EU corn feeding and exports and Ukraine exports.  Global corn production for 2015/16 is lowered 5.5 million tons with reductions for Ukraine, Argentina, India, Philippines, and several Sub-Saharan African countries more than offsetting an increase for Brazil.  Brazil corn production is also raised for 2014/15.  Global 2015/16 production is lowered for rye, millet, sorghum, and barley.  Rye production is lowered for EU.  Millet and sorghum production are lowered for a number of Sub-Saharan African countries.  Barley production is lowered for Russia, but mostly offset by increases for EU, Canada, and Australia.  Mixed grain production is also raised for EU, leaving EU coarse grain production higher on the month.


Global 2015/16 coarse grain consumption is lowered 6.4 million tons with a 4.8-million-ton reduction in corn usage and smaller cuts in rye, millet, and sorghum consumption.  Much of the decline in coarse grain consumption is for those Sub-Saharan African counties with lower output this month; however, reductions are also made for corn consumption in Saudi Arabia, EU, Ukraine, and Philippines, and rye consumption in EU.  Corn trade for 2015/16 is lowered with a reduction in Saudi Arabia imports.  Corn exports are lowered for Ukraine and Argentina but raised for Brazil.  Global 2015/16 corn ending stocks are projected 1.9 million tons lower at 187.8 million, 8.2 million lower than in 2014/15.


RICE: U.S. all rice production in 2015/16 is forecast at 187.8 million cwt, down 1.7 million from last month with the decline entirely due to lower yield. The average all rice yield is forecast at 7,307 pounds per acre, down 67 pounds from last month, and the lowest since 2011/12. Yields are lowered for California, Louisiana, Mississippi, and Texas; increased for Missouri; and unchanged for Arkansas. All rice harvested area is unchanged at 2.57 million acres. Long-grain and combined medium- and short-grain rice production are both lowered from last month, with long-grain production projected at 130.3 million cwt and combined medium- and short-grain production at 57.5 million. The all rice import forecast is unchanged at 25.5 million cwt.  All rice domestic and residual use is unchanged at 125.0 million cwt.  All rice exports are unchanged at 97.0 million cwt with long-grain exports projected at 64.0 million and medium- and short-grain exports at 33 million.  All rice ending stocks are projected at 39.8 million cwt, down 1.7 million from last month with long-grain stocks at 21.8 million, and medium- and short-grain at 16.1 million.


The 2015/16 long-grain season-average farm price range is projected at $12.80 to $13.80 per cwt, unchanged from last month.  The medium- and short-grain farm price range is projected at $17.30 to $18.30 per cwt, down 20 cents per cwt on each end of the range.  The California medium- and short-grain rice price at a midpoint of $21.00 per cwt is unchanged from last month.  The Other States medium- and short-grain rice price at a midpoint of $14.00 per cwt is lowered 50 cents per cwt.  The all rice season-average farm price is forecast at $14.20 to $15.20 per cwt, unchanged from a month ago.


Projected global 2015/16 rice ending stocks are reduced on lower supplies. World ending stocks at 88.3 million tons are down 1.9 million from last month and the lowest since 2007/08.  Stocks have dropped 22.5 million tons or 20 percent since 2012/13.  The global stocks-to-use ratio at 18.1 percent is the smallest since 2006/07.  Global rice production is projected at 474.0 million tons, down 1.7 million from last month, primarily due to smaller crops forecast for India and Thailand.   Thailand’s crop is lowered 1.6 million tons, or 9 percent, due to drought and low irrigation supplies in the lower northern region and central plains, as both area harvested and yield are lowered.  India’s crop is lowered 0.5 million tons to 103.5 million due to a 2 percent drop in area harvested.  Global 2015/16 rice consumption is projected at a record 487.5 million tons, up slightly from a month ago. Ending stocks for 2015/16 are lowered for China, India, Pakistan, Thailand, and the United States, partially offset with an increase for Philippines.


OILSEEDS:  U.S. oilseed production for 2015/16 is projected at 115.3 million tons, down 0.8 million from last month.  Soybean production is forecast at 3,888 million bushels, down 47 million with higher yields only partly offsetting reduced harvested area.  The soybean yield is forecast at 47.2 bushels per acre, up 0.1 bushels from the September forecast.  Harvested area is reduced 1.1 million acres to 82.4 million.  Soybean supplies for 2015/16 are projected 66 million bushels below last month with lower beginning stocks and production.  Sunflowerseed and canola production are forcast higher on higher yields and harvested area.


U.S. soybean exports for 2015/16 are reduced 50 million bushels to 1,675 million on the slow pace of sales and increased competitor supplies.  Soybean crush is projected at 1,880 million, up 10 million on higher domestic soybean meal disappearance, which is raised in line with an increase for 2014/15.  Soybean ending stocks for 2015/16 are projected at 425 million bushels, down 25 million.  The soybean price is projected at $8.40 to $9.90, unchanged from last month.  Soybean meal and soybean oil price projections are also unchanged at $310 to $350 per short ton and 27.5 to 30.5 cents per pound, respectively.


Soybean balance sheet changes for 2014/15 include lower planted and harvested area, lower yield, production, and ending stocks from the September 30 Grain Stocks report.  Exports are increased based on final trade data for the marketing year.  Soybean crush is raised based on data from the October 1 Fats and Oils: Oilseed Crushings, Production, Consumption and Stocks report published by NASS.


Global oilseed production for 2015/16 is projected at 531.0 million tons, up 3.9 million from last month on higher soybean, rapeseed, sunflower, and peanut production.  Global soybean production is projected at a record 320.5 million tons, up 0.9 million with higher Brazil production only partly offset by lower projections for the United States, India, and Ukraine.  Brazil soybean production is projected at a record 100.0 million tons on higher area.  A sharp decline in the value of the Brazilian real recent months is expected to lead to increased area despite lower international soybean prices this year.  Soybean crops in Ukraine and India are reduced on lower projected yields.  Rapeseed production for Canada is projected at 14.3 million tons, up 1.0 million based on higher yields reported in the most recent survey from Statistics Canada.  Global sunflowerseed production is raised on higher estimates for Argentina and Ukraine.  Global cottonseed production is projected lower with reductions for China and Pakistan only partly offset an increase for Brazil.


Global oilseed stocks for 2015/16 are projected at 96.3 million tons, up 1.4 million mainly on higher rapeseed stocks in Canada and China, and higher sunflowerseed stocks in Argentina and Ukraine.  Global soybean stocks are raised marginally as higher stocks for Brazil are only partly offset by reductions for the United States, Argentina, and India.


SUGAR:  Total imports for 2014/15 are increased by 42,721 short tons, raw value (STRV) to 3.544 million based on September data from U.S. Customs. Imports from Mexico are increased by 79,000 STRV for a 2014/15 total of 1.530 million STRV.  This estimate, if realized, would exceed by about 4,000 STRV, the export limit imposed by the Countervail Duty (CVD) Suspension Agreement. Other 2014/15 import changes are: an increase in re-export imports by 9,492 STRV; imports under tariff-rate quotas (TRQs) decreased by 44,895 and high-tier tariff imports decreased by 610. Exports are increased by 15,000 STRV to 180,000 based on pace to date. Deliveries for human consumption are increased by 60,000 STRV to 11.935 million based on large imports of refined sugar for direct consumption, mostly from Mexico. Although classified as deliveries for human consumption, analysis of individual sourcing components and of import data strongly imply an estimated 90,000 STRV of the imported sugar is not being immediately consumed but is being held for delivery in the 2015/16 marketing year by entities not required to report to USDA.  Ending stocks are estimated at 1.697 million STRV, implying an ending stocks-to-use ratio of 13.9 percent.


Total 2015/16 U.S. production is forecast at 8.760 million STRV, a 26,000 increase from last month. Beet sugar for the 2015/16 August-July crop year is forecast at 5.243 million STRV, an increase of 41,000 based on NASS-reported improved sugarbeet yield and processor-reported sucrose levels of 17.95 percent. All of the increase is projected to occur in the 2015/16 fiscal year, implying production at 5.075 million. Cane sugar production in Hawaii is reduced 15,000 STRV to 165,000 based on processor’s forecasts. Imports are projected up 3,694 STRV based on minor changes amongst TRQ suppliers. As a result of refined sugar from non-reporting entities imported in 2014/15 but likely held for marketing at a later time, deliveries for human consumption are reduced by the estimated 90,000 STRV to 11.785 million.  The 2015/16 ending stocks are forecast at 1.736 million STRV, implying an ending stocks-to-use ratio of 14.3 percent.


Mexico 2014/15 imports are increased by 10,912 metric tons (MT) for more refined sugar imported from the United States for the IMMEX sugar-containing products export program. Exports for 2014/15 to the United States are increased by 67,611 MT to 1.309 million based on USDA estimated imports from Mexico. Exports to other destinations are reduced by 18,525 MT to 131,475 based on reporting by Comite Nacional Para El Desarrollo Sustentable de la Caña de Azucar (CONADESUCA).  Because there are no changes in supply or use for 2015/16, ending stocks fall by the same 38,174 MT for both 2014/15 and 2015/16. The stocks-to-consumption ratios of 17.2 percent in 2014/15 and 17.0 percent in 2015/16 are below the historical average of 22 percent.


LIVESTOCK, POULTRY, AND DAIRY:  The forecasts for total meat production in 2015 and 2016 are increased from last month.  Beef production for 2015 is raised on larger forecast slaughter of fed cattle in the second half of 2015 and heavier carcass weights.  The forecast for 2016 is raised as cattle slaughter and carcass weights in the first half are projected higher than last month.  The pork production forecasts for both 2015 and 2016 are raised. The pace of hog slaughter in the remainder of 2015 is expected to be higher.  USDA’s Quarterly Hogs and Pigs estimated less of a decline in sows farrowing during June-August than indicated in prior intentions and farrowing intentions into early 2016 support an increase in forecast pork production for 2016.  Broiler production is raised for 2015 as a larger third quarter level more than offsets a reduction for the fourth quarter, but the forecast for 2016 is reduced as broiler producers have slowed the pace of egg sets.  Turkey production for 2015 is lowered based on third-quarter production data; subsequent quarters through 2016 are unchanged.  Egg production for 2015 is raised on higher third quarter hatching egg production.  Production forecasts for 2016 are unchanged.


Beef imports are unchanged for 2015 and 2016.  Beef exports for 2015 and 2016 are lowered as demand is projected to remain relatively weak.  Pork export forecasts are unchanged, but a small increase is made to third-quarter 2015 imports based on recent trade data.  Broiler exports are reduced from last month as slow global demand is expected to continue for in the remainder of the year and into 2016.  


Cattle prices for 2015 and 2016 are reduced from last month on current large supplies of market-ready cattle, weaker demand and competition from relatively large supplies of competing meats.  Hog prices are raised for both 2015 and 2016 as demand has firmed.  Broiler prices are lowered for both 2015 and 2016 on relatively large broiler meat supplies.  Turkey prices are raised for 2015 on current price strength, but the forecast for 2016 is unchanged from last month.  Egg prices for 2015 are lowered reflecting recent price declines, but the forecast for 2016 is unchanged.


Milk production forecasts for 2015 and 2016 are unchanged from last month.  Fat-basis imports are increased as domestic demand continues to support higher imports of cheese and butter.  Exports are reduced for 2015 on weaker cheese sales, but are unchanged for 2016.  Skim-solids imports are reduced for 2015 and 2016, while exports are reduced for 2015 and unchanged for 2016.  Large world supplies of dairy products, a strong dollar, and generally weak global demand are expected to continue to pressure exports during 2015 and 2016.


Although butter prices have declined sharply from recent high levels, domestic demand for butter is expected to support relatively high butter prices during 2016.  The butter price for 2015 is unchanged at the midpoint, and is raised for 2016.  Cheese prices are raised for 2015 and 2016 on support from domestic demand.  Nonfat dry milk (NDM) prices are forecast higher in 2015 and 2016 reflecting a rebound in both domestic and international prices.  Whey prices are lowered for both 2015 and 2016 as supplies are large.  Class III prices are raised for 2015, but lowered for 2016 as the decline in whey prices more than offsets higher cheese prices.  Class IV prices are raised for both 2015 and 2016 due to higher butter and NDM prices. The all milk price is raised to $16.90 to $17.00 per cwt for 2015, but lowered to $16.05 to $16.95 per cwt for 2016.


COTTON:  The 2015/16 U.S. cotton forecasts include marginally lower production and ending stocks relative to last month, with prices reduced sharply.  Production is lowered 90,000 bales. Domestic mill use and exports are unchanged.  Ending stocks are now projected at 3.1 million bales, or 22 percent of total use.  The marketing year average price received by producers is projected to range from 54 to 64 cents per pound.  The mid-point of 59 cents per pound is reduced 3 cents from last month, as relatively weak global demand for yarn and lower prices for polyester are pressuring world cotton prices.


The 2015/16 world cotton forecasts show higher beginning stocks, lower production and consumption, and higher ending stocks relative to last month.  Beginning stocks are raised about 900,000 bales, due mainly to a reduction in China’s 2014/15 consumption, which reflects indications of net cotton textile exports that are lower than previously expected.  Production for 2015/16 is reduced for China, Pakistan, and Brazil, but is raised for Mali.  Consumption is reduced mainly in China, Pakistan, and India.  With world trade virtually unchanged from last month, global stocks are now projected at 107 million bales.  


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