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WHEAT: Projected U.S. wheat supplies for 2017/18 are higher this month on increased beginning stocks, production, and imports. Projected 2017/18 U.S. wheat production is slightly increased by 3.8 million bushels to 1,824 million. The NASS June Crop Production report indicates higher Hard Red Winter and Soft Red Winter wheat production forecasts, which more than offset a reduced White Winter wheat crop. All of the wheat use categories are unchanged this month. The net supply increase raises projected 2017/18 ending stocks by 10.8 million bushels to 924.3 million. Carryout remains 20 percent below last year. The 2017/18 season-average farm price is projected at $3.90 to $4.70 per bushel, up 5 cents on both ends of the range. The mid-point of this range is up $0.40 from 2016/17. High-protein wheat supplies are expected to remain constrained in 2017/18, resulting in relatively higher prices for this wheat.
Global wheat supplies for 2017/18 are raised 2.8 million tons, primarily on higher forecast wheat production for Russia, which is up 2.0 million tons to 69.0 million. Conditions continue to be favorable for winter wheat in most areas since the crop emerged from dormancy. Turkey’s wheat production is also forecast higher, up 0.5 million tons to 18.0 million on improved crop conditions this spring. India’s wheat production forecast is reduced 1.0 million tons to 96.0 million but is still record large and 9.0 million tons above 2016/17. European Union wheat production is forecast modestly lower at 150.8 million tons on a smaller expected crop in Germany but still 4 percent above last year.
Foreign exports for 2017/18 are fractionally higher this month with increases in Argentina and Iran more than offsetting a reduction for the EU. Imports are projected higher for Brazil, Chile, and South Africa but down for Iran. Total world consumption is marginally lower, as a 1.0-million-ton reduction in India is only partially offset by increases in Russia, Brazil, and Chile. Global ending stocks are projected at a record 261.2 million tons, up 2.9 million from last month.
COARSE GRAINS: The 2017/18 outlook for U.S. feed grain supplies is virtually unchanged this month as an increase in sorghum beginning stocks is largely offset by reductions for barley and oats. Projected corn production for 2017/18 is unchanged at 14,065 million bushels. USDA will release the Acreage report on June 30, providing a survey-based estimate of corn area planted and a forecast of area harvested for grain. The season-average corn price received by producers is unchanged from last month at $3.00 to $3.80 per bushel.
The increase for 2017/18 sorghum beginning stocks reflects a 5 million bushel reduction for 2016/17 food, seed, and industrial use based on reported sorghum used for ethanol production through April in the Grain Crushings and Co-Products Production report. With other use categories unchanged, sorghum ending stocks for 2016/17 are raised 5 million bushels.
This month’s 2017/18 foreign coarse grain outlook is for lower production, increased trade and reduced stocks relative to last month. EU corn production is down based on government data indicating lower-than-expected area in France and Germany. Canada corn production is lowered on reductions to both area and yield, as wetter-than-normal conditions in Ontario and Quebec during May delayed plantings and are expected to reduce yield prospects. Ukraine corn production is raised based on reported planting progress to date indicating a level of planted area above previous expectations. Turkey’s barley production is raised as the impact of April dryness was not as severe as previously anticipated. For 2016/17, Brazil corn production is raised as above-normal rainfall in the Center-West during May boosts yield prospects. South Africa corn production is higher reflecting the latest production estimate from the government.
Major global trade changes for 2017/18 include higher projected corn exports for Ukraine and Russia, with increased corn imports for the EU. Foreign corn ending stocks are lowered from last month, with reductions for Canada, the EU and Russia more than offsetting increases for South Africa and Ukraine.
RICE: U.S. 2016/17 rice ending stocks are lowered 2.0 million cwt this month on increased exports. Milled exports for 2016/17 are raised 4.0 million cwt on strong demand particularly in the Middle East. However, rough exports for 2016/17 are lowered 2.0 million cwt on a correction in Census data for shipments to El Salvador; the correction also led to a slight reduction in 2015/16 rough exports.
Total supplies for 2017/18 are down 2.0 million cwt, reflecting the lower beginning stocks and unchanged production. All rice planted area remains estimated at 2.6 million acres despite weather-related uncertainties in the mid-South and California during planting this spring. NASS will release the Acreage report on June 30 providing an estimate for rice planted area and a forecast for harvested area. Total exports are raised 2.0 million cwt to 112.0 million with milled increased 3.0 million and rough reduced 1.0 million. Ending stocks are lowered 4.0 million cwt to 34.1 million, and the 2017/18 all rice season-average farm price is raised $0.30 per cwt at the midpoint to a range of $11.00 to $12.00.
Global supplies are raised fractionally for both 2016/17 and 2017/18. The largest change is a 1.5-million-ton increase in 2016/17 India production to 108.0 million on updated government statistics. Global 2017/18 rice production is lowered fractionally to 481.0 million tons, down 2.1 million tons from the previous year and the second largest on record. Exports are raised 0.6 million tons in 2016/17 and 0.5 million tons in 2017/18 both largely on increases for India. Imports for 2017/18 are raised 0.4 million tons for Bangladesh on tight supplies. Only slight changes are made this month to total use. Ending stocks are raised 0.7 million tons for 2016/17 and 0.8 million tons for 2017/18, respectively.
OILSEEDS: This month’s U.S. soybean supply and use projections for 2017/18 are little changed from last month. Higher beginning stocks reflect a lower crush projection for 2016/17. Soybean crush for 2016/17 is reduced 15 million bushels to 1,910 million mainly reflecting reduced domestic soybean meal disappearance. Soybean ending stocks for 2016/17 are projected at 450 million bushels, up 15 million from last month. Ending stocks for 2017/18 are also raised 15 million bushels to 495 million.
Price forecasts for 2017/18 are unchanged this month. The 2017/18 season-average price for soybeans is forecast at $8.30 to $10.30 per bushel; soybean meal and oil prices are projected at $295 to $335 per short ton and 30 to 34 cents per pound, respectively.
The 2017/18 global oilseed supply and demand forecasts include higher production and stocks compared to last month. Higher cottonseed and sunflowerseed production is partly offset by lower rapeseed. Sunflowerseed production is raised for Ukraine on higher planted area based on reported planting progress to date. EU rapeseed production is down mainly on lower projected yields in Germany where crops experienced dry and sub-freezing conditions through key flowering stages.
Global oilseed production changes for 2016/17 include higher soybean production in Brazil and Argentina and higher peanut production in India. Global soybean production is raised 3.3 million tons to 351.3 million. The Brazil soybean crop is projected up 2.4 million tons to 114.0 million reflecting increased yields in more recently harvested areas, particularly Rio Grande do Sul. With higher global production in 2016/17, the beginning stocks for 2017/18 are raised 3.1 million tons to 93.2 million. The larger beginning stocks combined with a 0.5-million-ton reduction to Argentina soybean exports in 2017/18 results in a 3.4-million-ton increase to 92.2 million to global soybean stocks at the end of the 2017/18 marketing year.
SUGAR: Beet sugar production for fiscal year 2016/17 is forecast at 4.988 million short tons, raw value (STRV), an increase of 56,000 over last month based on additional sugarbeets expected to be processed in August and September 2017 from the 2017/18 crop. Texas cane sugar production for 2016/17 is increased 2,775 STRV to 138,300 based on final processor reporting. Ending stocks are increased by the sum of the supply adjustments to 1.536 million STRV, implying a stocks-to-use ratio of 12.3 percent.
Beet sugar production for 2017/18 is increased 38,000 STRV to 4.988 million based on analysis of this spring’s planting pace and current crop conditions, and on the proportion of the 2017/18 sugarbeet crop expected to be processed before October 1. Imports from Mexico are reduced by 526,396 STRV from last month to 1.774 million. Ending stocks are decreased by the sum of the supply adjustments to 1.104 million STRV, implying a stocks-to-use ratio of 8.8 percent.
Mexico 2016/17 sugar production is decreased by 201,245 metric tons (MT) to 5.985 million based on the production pace as the harvest season approaches its end. Exports to other countries are increased by 40,000 MT to 150,000 based on the pace of exports to non-U.S. destinations and exports made to the U.S. re-export import program. Ending stocks for 2016/17 are therefore reduced by 241,245 MT to 1.101 million.
Mexico 2017/18 production is reduced 125,000 MT to 6.100 million based on area for harvest at 790,000 hectares, sugarcane production of 54.465 million MT, and recovery of 11.2 percent. Imports, domestic deliveries for consumption and IMMEX, and exports to non-U.S. destinations are the same as last month. Exports to the United States are reduced by 450,508 MT to 1.519 million. Exports to the United States are based on the lower of the following: (1) U.S. Needs of 1.886 million MT as defined in the Suspension Agreements but assuming additionally that U.S. specialty sugar imports will be set at the same level as initially established for 2016/17; or (2) the export level that yields an ending stocks-to-consumption ratio of 18.0 percent. The 18-percent stocks-to-consumption is an assumed lower bound necessary for use until mid-December 2018 when the new Mexico sugarcane harvest is well underway.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production is lowered from last month per 2017 but is raised for 2018. Beef production for 2017 is lowered primarily on lighter carcass weights which more than offsets higher expected slaughter in the later part of 2017. Higher expected placements support a higher 2018 beef forecast. Pork production for 2017 is lowered on the current pace of second-quarter slaughter and lighter carcass weights. No changes are made to the 2018 production forecast. USDA’s Quarterly Hogs and Pigs report will be released June 29 and will provide an indication of producer farrowing intentions for the remainder of 2017. Broiler production for 2017 is lowered on the pace of second-quarter slaughter. No changes are made to outlying quarters or the 2018 forecast. Turkey production in the second quarter of 2017 is reduced on the current pace of slaughter, and third-quarter production is lowered as weak demand is expected to limit the rate of expansion. No changes are made to the 2018 turkey forecast. Egg production for 2017 is raised on recent hatchery data.
Beef trade forecasts for 2017 and 2018 are unchanged from last month. The pork export forecast for 2017 is unchanged from last month, but the import forecast is raised. No changes are made to the 2018 pork trade forecasts. The second-quarter broiler import forecast is lowered on recent trade data but no changes are made to outlying quarters. No changes were made to the 2017 broiler export forecast, but the turkey export forecast was lowered on continued demand weakness. Poultry trade forecasts are unchanged for 2018.
Cattle and hog prices for 2017 are raised from last month on price strength to date and continued price strength in the third quarter. Cattle prices are unchanged for 2018, while hog prices are raised on expected strong packer demand next year. Broiler prices are raised for 2017 and first quarter 2018 on expectations of continued strong demand. Turkey prices are reduced for 2017 and 2018 on weaker-than-expected demand. Egg prices for 2017 are lowered fractionally, but the 2018 egg price forecast is unchanged.
Milk production forecasts for 2017 and 2018 are lowered from last month as lower expected growth in milk per cow more than offsets expected gains in cow numbers. For 2017 and 2018, fat basis exports are reduced on the expectation that current high prices will temper export demand, but skim-solid basis exports are raised for both years on expected strength in nonfat dry milk/ skim milk powder demand. The 2017 fat basis import forecast is raised on stronger imports of cheese and butterfat. For 2018, lower expected imports of some processed dairy products more than offsets higher expected imports of cheese and butterfat, and the forecast for fat basis imports is lowered. The skim-solid basis import forecasts are unchanged.
Cheese, butter, and nonfat dry milk (NDM) price forecasts are raised for both 2017 and 2018 on strong domestic and international demand and a reduced production forecast. However, whey prices are reduced from last month for 2017, but raised for 2018. For 2017, the Class III price is raised as the cheese price increase more than offsets the lower whey price, and the Class IV price forecasts reflects higher butter and NDM prices. For 2018, Class prices are raised on higher component product prices. The all milk price is forecast higher at $17.80 to $18.20 per cwt for 2017 and is increased to $18.10 to $19.10 per cwt for 2018.
COTTON: The U.S. cotton projections for 2017/18 show a reduction of 500,000 bales in exports from last month to 13.5 million, as higher anticipated foreign production is expected to reduce global import demand. Beginning stocks, production and domestic mill use are unchanged. Accordingly, ending stocks are now projected at 5.5 million bales which, if realized, would be a 9-year high. The projected range for the 2017/18 marketing year average farm price of 54.0 to 74.0 cents per pound is unchanged from last month, while the price estimate for 2016/17 is reduced marginally to 68.5 cents.
The 2017/18 world cotton projections include increases in global production, consumption, and ending stocks, while trade is reduced 2 percent. Production is raised for Pakistan, China, and Mexico based on higher estimated planted area. Higher global consumption reflects increases for China, India, and Pakistan which are largely due to higher domestic supplies. China’s consumption is raised in both 2016/17 and 2017/18, as sales from the national reserve and steady imports suggest that consumption there is stronger than previously estimated. A reduction of nearly 800,000 bales in world imports results primarily from lower expected demand by Pakistan and Mexico. Exports are lowered for the United States, India, Brazil and others. World ending stocks are now projected at 87.7 million bales, the lowest since 2011/12.
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