WASDE REPORT FOR 3/8/19
Mar 08, 2019
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COARSE GRAINS: This months 2018/19 U.S. corn outlook is for lower corn used for ethanol, reduced exports, and larger stocks. Corn used to produce ethanol is lowered 25 million bushels to 5.550 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during February as indicated by Energy Information Administration data. Exports are reduced 75 million bushels to 2.375 billion, reflecting diminished U.S. price competitiveness and expectations of increased exports for Brazil and Argentina. With no other use changes, ending stocks are raised 100 million bushels to 1.835 billion. The season-average corn price received by producers is lowered 5 cents at the midpoint to $3.55 per bushel.
For sorghum, 2018/19 exports are lowered 15 million bushels to 85 million, which if realized would be the lowest since 2012/13. Food, seed, and industrial use is lowered 5 million bushels reflecting a reduction in the projected amount of sorghum used to produce ethanol. Offsetting is a 20 million bushel increase in feed and residual use. The midpoint price forecast is lowered 5 cents to $3.30 per bushel.
The global coarse grain production forecast for 2018/19 is down slightly to 1,371.9 million metric tons. This months foreign coarse grain outlook is for marginally lower production, virtually unchanged trade, greater use, and reduced stocks relative to last month. Brazil corn production is unchanged, with increased yield expectations offset by a reduction in area. Faster-than-normal planting progress improves yield prospects for second-crop corn in the Center-West, while area is down reflecting updated expectations for both first and second-crop corn. Corn production is raised for India, but lowered for South Africa. Australia coarse grain production is higher, as a forecast increase in barley more than offsets a reduction for sorghum.
Major global trade changes for 2018/19 include higher projected corn exports for Argentina and Ukraine and reduction for the United States. For 2017/18, Brazils exports for the marketing year ending February 2019 are raised based on larger than expected late-season shipments. Partly offsetting is a reduction for Argentina. Chinas coarse grain imports for 2018/19 are lowered, reflecting lower forecast sorghum and barley imports. Chinas corn feed and residual use is raised with lower sorghum and barley imports. Corn imports are raised for the EU and Canada. Foreign corn ending stocks for 2018/19 are lowered from last month, mostly reflecting reductions for China, Brazil, and Argentina.
WHEAT: The outlook for 2018/19 U.S. wheat this month is for larger supplies, lower exports, reduced domestic use, and higher ending stocks. Supplies are increased by 5 million bushels on higher imports. Wheat exports are lowered 35 million bushels to 965 million with reductions in Hard Red Spring and White on stronger than expected export competition for these classes. Wheat food use is reduced by 5 million bushels to 965 million, based primarily on the latest NASS Flour Milling Products report. Wheat ground for flour was lower in the first half of the 2018/19 Marketing Year than previously forecast. Projected 2018/19 ending stocks are raised 45 million bushels to 1,055 million. The season-average farm price range is unchanged at the midpoint of $5.15 per bushel and the range is narrowed to $5.10 to $5.20.
Global wheat supplies are reduced, primarily on lower production forecasts for Kazakhstan and Iraq. Projected 2018/19 world trade is fractionally higher as larger EU and Brazil exports more than offset reductions for the United States and Mexico. The EU is increased 1.0 million tons to 23.0 million as its recent improved export competiveness is expected to continue for the remainder of the trade year. Global imports are raised for Algeria, Morocco, and the Philippines while decreased for Bangladesh, the EU, Mexico, and Venezuela. Projected 2018/19 world consumption is reduced 5.1 million tons with India accounting for 3.0 million of the decrease as its total wheat consumption is lowered to 95.0 million, compared to last years 95.8 million. This reduction is based on an upward revision to the official Indian government wheat stocks estimate for 2018/19. Global ending stocks are increased 3.0 million tons to 270.5 million, down 3 percent from last years record.
RICE: This months outlook for 2018/19 U.S. rice is for higher imports, lower exports, and increased ending stocks. All the supply and demand changes are for medium- and shortgrain rice. Total rice imports are raised 0.5 million cwt to record 29.0 million on increased China shipments to Puerto Rico. All U.S. rice exports are down 2 million cwt to 98 million on a slow shipment pace to date of medium- and short-grain rice. Even with this reduction, 2018/19 rice exports are forecast to increase 11 million cwt from the previous year as U.S. rice is expected to be more competitive. Rice ending stocks are raised 2.5 million cwt to 49.6 million, the largest in more than 30 years. The all rice season-average farm price is raised $0.10 per cwt at the midpoint to a range of $11.70 to $12.70 per cwt. The entire change is due to increased long-grain prices.
Global 2018/19 rice supplies are raised 6.3 million tons to 664.2 million, mostly on a large increase for India production. Indias rice crop is raised 5.0 million tons to a record 116.0 million due to favorable summer rainfall and updated government data. Bangladesh production is raised 0.5 million tons to 35.0 million also on favorable weather and increased harvested area. Global exports are reduced 0.4 million tons to 47.4 million but still remain record large. Global consumption is raised 1.7 million tons to 492.0 million, led by a 1.1 million ton increase for India. With world supplies rising more than total use, global ending stocks are raised 4.6 million tons to 172.2 million to a new record.
OILSEEDS: U.S. soybean supply and use changes for 2018/19 include higher crush and lower ending stocks compared with last months report. Soybean crush is raised 10 million bushels to 2,100 million on higher domestic disappearance of soybean meal and a lower soybean meal extraction rate reflecting data reported by NASS in the Oilseed Crushings report. With exports unchanged, soybean stocks are projected at 900 million bushels, down 10 million from last month. With increased crush, soybean oil productionis raised 115 million pounds to 24.6 billion. Soybean oil used for methyl ester production for biodiesel is raised 200 million pounds to 8.2 billion on record production for the first quarter of the marketing year (Oct-Sept). With increased production more than offset by higher use, soybean oil stocks are forecast lower.
The season-average soybean price range forecast of $8.10 to $9.10 per bushel is unchanged at the midpoint. Soybean oil and meal prices are also unchanged at 28.5 to 31.5 cents per pound and $295 to $335 per short ton, respectively
The 2018/19 global oilseed outlook includes lower production, crush, and increased stocks compared to last month. Global oilseed production is down 0.2 million tons, with lower soybean production more than offsetting higher rapeseed and cottonseed. Soybean production is reduced 0.9 million tons to 360.1 million on lower production for Brazil and Paraguay. Production for Brazil is down 0.5 million tons to 116.5 million, reflecting dry weather conditions and lower yields for Minas Gerais, Mato Grosso do Sul, and Goias.
Global oilseed crush is down 0.5 million tons mainly on lower soybean crush for China, which is down on slower-than-expected pace to date. Chinas soybean crush pace is expected to increase during the second half of the marketing year as the South American harvest advances and leads to increased global supplies. Global oilseed ending stocks are up 0.8 million tons to 121.7 million, with soybeans accounting for 0.5 million of the increase.
SUGAR: U.S. beet sugar production for 2018/19 is increased 103,694 short tons, raw value (STRV) to 5.004 million based on a lower projected shrink of 5.0 percent, down from 6.9 percent last month, and a slight increase in projected recovery from sliced beets. Cane sugar production is decreased 18,050 STRV to 4.099 million based on reporting by processors in Florida and Texas. Imports from Mexico for 2018/19 are projected to decrease 223,635 STRV to 896,692 while high-tier tariff imports are projected to increase 10,000 STRV to 55,000 based on the pace to date. With no change to 2018/19 use, ending stocks are projected at 1.668 million STRV, implying a stocks-to-use ratio of 13.55 percent.
Mexico production for 2018/19 is increased to 6.152 million metric tons (MT) based on higher projected area for harvest and on updated projections of sugarcane yield and recovery based on the pace established for those values through early March. Deliveries of sugar for human consumption are increased 201,611 MT to 4.615 million. Per capita sweetener consumption is projected at a level consistent with that for 2016/17 and consumption of high fructose corn syrup is reduced to 1.555 million MT based on a slower pace to date than previously forecast.
Exports to the United States are projected down 191,395 MT to 767,420 MT. This is sum of exports under license for 2018/19 plus 1,842 MT reported by CONADESUCA corresponding to export licenses for 2017/18 extended for a period between October 1 and 15. Projected Mexico exports under 2018/19 license are the greater of 100 percent of U.S. Needs calculated from U.S. supply and use in this WASDE or the export limitpreviously established by the Commerce Department on December 18, 2018. Exports to non-U.S. destinations are increased 27,614 MT based on realized exports through February 23, 2019. Total exports to all destinations sum to 1.102 million MT. Ending stocks for 2018/19 are projected residually at 1.420 million MT, implying a stocks-tohuman consumption ratio of 30.8 percent
LIVESTOCK, POULTRY, AND DAIRY: Total U.S. red meat and poultry production for 2019 is lowered from the previous month as lower forecast beef and turkey production more than offsets higher pork production. Beef production is reduced from the previous month on the pace of fed cattle slaughter in the first quarter and lower expected marketings in mid-2019. Partly offsetting the lower fed cattle slaughter is higher expected cow slaughter. The lower production forecast also reflects lighter carcass weights in 2019. The pork production forecast is raised slightly on the current pace of slaughter and heavier first-quarter carcass weights. The broiler production forecast is unchanged from last month. The turkey production forecast is decreased as hatchery data is pointing to lower-than-previously expected poult placements. Forecast egg production is increased on continued growth in the laying flock.
The 2019 beef, broiler, turkey, and egg trade forecasts are unchanged from the previous month. Pork imports are lowered for 2019, reflecting larger domestic supplies and limited demand for foreign product. Forecast pork exports are lowered on slower international demand for U.S. pork products.
Cattle price forecasts are raised for 2019 on current price strength and expectations of firm demand throughout the year. First- and third-quarter hog prices are reduced from the previous month. First-quarter broiler and egg price forecasts are reduced on recent price data. First-half turkey prices are raised.
For 2019, the milk production forecast is lowered on smaller expected dairy cow numbers. The fat basis export forecast is reduced on slower expected sales of butterfat due to increased global competition. Skim-solids basis exports are lowered on expected strong competition in international skim milk powder markets and slower expected demand for whey products. The fat basis import forecast is lowered slightly while the skim-solids basis import forecast is unchanged.
Annual product price forecasts for cheese, butter, nonfat dry milk (NDM) are raised from the previous month, but the whey price forecast is reduced slightly. The Class III price is raised as the higher cheese price projection more than offsets the lower whey price. The Class IV price is increased on higher forecast butter and NDM prices. The all milk price forecast is raised to average $17.00 to $17.60 per cwt.
COTTON: The U.S. 2018/19 cotton supply and demand estimates are unchanged from last month. The projected range for the marketing year average price received by producers of 69.0 to 71.0 cents per pound is reduced 2 cents, as the reported average price for January fell below previous expectations.
This months 2018/19 world cotton estimates show higher production and ending stocks, and slightly lower trade. Production is estimated up 350,000 bales in Brazil on higher area and 200,000 bales up in Pakistan based on arrivals at gins. Production is 100,000 bales lower in Australia due to weather. World trade is forecast 140,000 bales lower with reductions for Brazil and Indonesia on the export and import sides based on activity to date. Ending stocks for 2018/19 are forecast 590,000 bales higher this month, at 76.1 million bales. This would be 5.1 million bales below their revised 2017/18 level.
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