WHEAT: The outlook for 2018/19 U.S. wheat this month is for unchanged supplies but reduced exports and domestic use. The NASS Grain Stocks report, issued March 29, implied less feed and residual use for both the second and third quarters. Total 2018/19 feed and residual use is lowered 10 million bushels to 70 million. Wheat exports are lowered 20 million bushels to 945 million on a continued sluggish export pace. By class, Hard Red Winter exports are raised 10 million bushels, which is offset by reductions of 15 million for Hard Red Spring, 10 million for White, and 5 million for Durum. These demand changes, as well as a small reduction in seed use, led to a 31.5-million-bushel-increase in ending stocks, which are now projected at 1,087 million bushels. The season-average farm price is raised $0.05 per bushel at the midpoint to $5.20 based on updated NASS price and marketing data.
World 2018/19 wheat supplies are raised 2.1 million tons due mainly to increased beginning stocks that largely reflect multi-year revisions for Iran. Global production and exports are each reduced fractionally, but domestic consumption is lowered 2.9 million tons. The consumption change stems primarily from lower Iran and EU feed and residual use; Iran is lowered on the series revision and the EU reduction is based on more competitive corn prices and increased coarse grain disappearance. With supplies increasing and total use declining, global ending stocks are raised 5.1 million tons to 275.6 million.
COARSE GRAINS: This month’s 2018/19 U.S. corn outlook is for lower feed and residual use, reductions in corn used for ethanol and exports, and larger stocks. Feed and residual use is lowered 75 million bushels to 5.300 billion based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter declined about 9 percent relative to a year ago. Corn used to produce ethanol is lowered 50 million bushels to 5.500 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during March as indicated by Energy Information Administration data. Exports are reduced 75 million bushels to 2.300 billion, reflecting current outstanding sales and expectations of increased competition from Brazil, Argentina, and Ukraine. With supply unchanged and use declining, ending stocks are raised 200 million bushels to 2.035 billion. The season-average corn price received by producers is unchanged at a midpoint of $3.55 per bushel.
The global coarse grain production forecast for 2018/19 is up 5.3 million tons to 1,377.2 million. This month’s foreign coarse grain outlook is for larger production, increased trade, greater use, and marginally higher stocks relative to last month. Brazil corn production is raised, reflecting improved yield prospects for second-crop corn. Argentina corn is higher based on expectations of larger area. Corn production is raised for the EU, Mexico, and Indonesia, with reductions for the Philippines and Pakistan.
Major global trade changes for 2018/19 include higher projected corn exports for Brazil, Argentina, the EU, and Ukraine with a partially offsetting reduction for the United States. Corn imports are raised for the EU and South Africa, with lower projections for Vietnam and Bangladesh. Foreign corn ending stocks for 2018/19 are raised from last month, mostly reflecting increases for Mexico, Indonesia and South Africa that more than offset declines for Vietnam, Brazil, Pakistan, Bangladesh, and Argentina.
OILSEEDS: U.S. soybean supply and use changes for 2018/19 include lower imports, higher seed use, and lower ending stocks. Soybean imports are reduced in line with reported trade through January while lower seed use reflects plantings indicated in the March 29 Prospective Plantings report. With soybean crush and exports unchanged, ending stocks are projected at 895 million bushels, down 5 million. Soybean oil changes include increased imports and domestic disappearance for biodiesel and for food use, and lower ending stocks. The season-average soybean price is forecast at $8.35 to $8.85, unchanged at the midpoint. Soybean oil price is projected at 28.0 to 30.0 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $305 to $325 per short ton, unchanged at the midpoint.
The 2018/19 global oilseed supply and demand forecasts include increased production, lower exports, and increased stocks compared to last month. Global oilseed production is raised 2.0 million tons to 595.0 million mainly on higher soybean production for Brazil and rapeseed production for India. Production for Brazil is increased 0.5 million tons to 117.0 million, reflecting favorable weather in Rio Grande do Sul where the crop is in pod-filling and maturation stages. Brazil’s 2017/18 soybean crop is also revised higher, supported by recent industry estimates. Rapeseed production for India is raised 1.4 million tons to 8 million on information from India’s Solvent Extractors’ Association.
Global oilseed exports are reduced 1.0 million tons to 177.1 million mainly on lower rapeseed trade between Canada and China. With lower rapeseed crush for China, imports are increased for other products, including sunflowerseed meal, rapeseed meal, palm oil, and soybean oil. Global oilseed ending stocks are raised 1.5 million tons to 123.2 million, largely due to higher soybean stocks for Brazil and rapeseed stocks for Canada.
LIVESTOCK, POULTRY, AND DAIRY: The 2019 forecast for total red meat and poultry production is lowered from last month on lower expected beef, pork and broiler production. The beef production forecast is reduced from the previous month primarily on lower carcass weights, but higher total cattle slaughter for 2019 is expected to partially offset declines in carcass weights. Pork production is lowered on a slower pace of slaughter throughout the year, but this decline is partially offset by slightly higher hog weights. USDA’s March Quarterly Hogs and Pigs report estimated producers farrowed 2 percent more sows during DecemberFebruary and indicated their intentions to farrow about 1 percent more sows in March-May. These hogs will be ready for slaughter in the second half of 2019. Broiler production is reduced on recent hatchery data and slowing weight growth while turkey production is raised slightly. The 2019 egg production forecast is raised from the previous month as the pace of expansion has been more rapid than previously expected.
For 2019, beef trade forecasts are unchanged from last month. Pork imports remain unchanged from the previous month, but the export forecast is raised on expectations of stronger global demand for U.S. pork products in the second half of the year. These forecasts assume that current trade policies remain in place. No change is made to broiler and turkey export forecasts.
The 2019 cattle price forecast is adjusted to reflect a slightly lower first-quarter price. The hog price forecast is raised from last month but demand in coming quarters is not expected to be as strong as in March and early April. The broiler price forecast is reduced, reflecting a lower first-quarter price, while modest year-over-year gains in turkey prices support a higher price forecast. The egg price forecast is lowered on recent price declines and increased production throughout the year.
The milk production forecast for 2019 is lowered from last month as higher milk cow numbers are more than offset by lower expected growth in milk per cow for the year. The 2019 fat basis import forecast is unchanged from last month, but the export forecast is lowered on slower expected shipments of butterfat products and whey products. On a skim-solids basis, the current import forecast is raised on higher imports of milk protein products and a number of other dairy products. The skim-solids basis export forecast is lowered from last month on lower shipments of whey products, lactose, and nonfat dry milk (NDM).
The annual product price forecast for cheese is raised from last month on higher current prices and expected stronger demand. Butter, NDM, and whey prices are reduced from the previous month on current prices and expected weaker demand. The Class III price is raised on the higher cheese price forecast while the Class IV price is reduced on lower NDM and butter price forecasts. The all milk price forecast is raised to $17.25 to $17.75 per cwt.
COTTON: The 2018/19 U.S. cotton supply and demand forecasts show lower consumption and higher ending stocks relative to last month. At 3.1 million bales, U.S. cotton consumption is now forecast to reach its lowest level since the 1890s. Ending stocks are now forecast at 4.4 million bales, a 100,000-bale increase from both the previous 2018/19 estimate and from the current estimate for 2017/18. The season-average farm price is unchanged with a midpoint of 70 cents per pound.
Lower world consumption this month results in higher projected 2018/19 ending stocks, with little net change in the other components of the global balance sheet. World mill use is forecast about 400,000 bales lower this month. A 300,000-bale decline in Turkey—and smaller declines in the United States and Vietnam—more than offset smaller increases elsewhere. Lower imports for India, Turkey, and Vietnam are largely offset by an upward revision for China. Lower exports for India and Burkina Faso are largely offset by Australia and Turkey. Higher production for China is largely offset by a decline for Burkina Faso.
World ending stocks in 2018/19 are forecast about 360,000 bales higher this month, with an increase in China’s stocks more than offsetting a decline in stocks outside of China.
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