World Agricultural Supply and Demand Estimates as published by USDA
Supplies for the 2018/19 U.S. wheat crop are unchanged this month, and total use is raised 7 million bushels on higher seed use that reflects increased projected 2019/20 wheat planted area. Small offsetting by-class changes are made for wheat imports and exports. Food use is unchanged based on the latest NASS Flour Milling Products report, issued November 1. Projected ending stocks are lowered 7 million bushels to 949 million. The season-average farm price is unchanged at the midpoint of $5.10 per bushel and the range is narrowed to $4.90 to $5.30.
Global 2018/19 wheat supplies are raised 6.7 million tons on both increased production and beginning stocks. The vast majority of this change stems from the updated production data released by China’s NBS, which made significant production changes from 2007/08 through 2017/18. In addition, China’s 2018/19 production forecast is raised with both higher harvested area and yield, based on the NBS revisions.
Total 2018/19 global production is raised 2.6 million tons, but is down 1.9 million tons excluding the China revision. Australia’s crop is lowered 1.0 million tons to 17.5 million on continued drought. Morocco, Pakistan, and Ukraine are lowered 0.9, 0.8, and 0.5 million tons, respectively. A 0.9-million-ton production increase for Algeria is partly offsetting. Global exports are lowered 1.6 million tons with almost all of that from Australia reflecting the smaller crop. Australia exports are lowered 1.5 million tons to 11.5 million, the lowest total since 2007/08. Global use is raised 0.2 million tons, but includes a 1.0-million-ton increase for China reflecting higher feed and residual use and larger supplies. With supplies rising more than use, global ending stocks are raised 6.5 million tons to 266.7 million. However, stocks outside of China are down 0.9 million tons.
This month’s 2018/19 U.S. corn outlook is for lower production, reduced feed and residual use and exports, and smaller ending stocks. Corn production is forecast at 14.626 billion bushels, down 152 million from last month on a reduced yield forecast. Feed and residual use is lowered 50 million bushels based on a smaller crop and higher prices. Exports are reduced 25 million bushels based on expectations of increased competition from Ukraine. With supply falling more than use, corn ending stocks are down 77 million bushels from last month. The season-average corn price received by producers is raised 10 cents to a midpoint of $3.60 per bushel.
Production, domestic consumption, and ending stocks of corn for China are revised beginning with the 2007/08 marketing year. A detailed breakout of the corn balance sheet revisions is available via at the Foreign Agricultural Service PS&D website and the WASDE historical revisions web page.
China’s NBS does not publish estimates of corn stocks or consumption. USDA’s estimates of corn stocks are based on official production estimates by NBS, trade data as reported by China Customs, and other related utilization data. For the time period encompassing the 2007/08 to 2017/18 marketing years, NBS increased corn total production by an unprecedented 266 million metric tons. USDA raises estimates of domestic disappearance, resulting in higher stock levels that sum to an additional 149 million tons of ending stocks for the 2018/19 marketing year. Changes to feed and residual disappearance attempt to account for, among other factors, the expected impact of the variation in soybean meal equivalent protein consumption, corn prices, availability of other energy substitutes, and residual statistical error. Importantly, USDA’s estimates of China’s coarse grain imports do not change with this revision, and thus still reflect the reality that coarse grain imports, in addition to other energy substitutes, surged during a time period when the country was accumulating large stocks of corn.
Global coarse grain production for 2018/19 is forecast 29.9 million tons higher to 1,373.3 million, with a greater corn production forecast for China accounting for a large portion of the increase. Aside from China, corn production is forecast higher for Ukraine, Argentina, Kenya, Moldova, and Russia. EU corn production is lowered, mostly reflecting reductions for Hungary, Poland, and Germany.
Corn exports are raised for Ukraine, Argentina, and Moldova. Imports are raised for the EU, Vietnam, and Iran. Barley imports are raised for Saudi Arabia, with higher exports projected for Russia and Ukraine. Not including China, foreign corn ending stocks are higher than last month, mostly reflecting increases for Argentina, Iran, Paraguay, and Vietnam.
This month’s outlook for 2018/19 U.S. rice is for fractionally higher supplies, reduced exports, and higher ending stocks. The NASS November Crop Production report indicated 2018/19 rice production is lowered slightly from the previous forecast to 218.3 million cwt with California accounting for the entire reduction. The average all rice yield is reduced 17 pounds to 7,522 pounds per acre. Despite lower production, supplies still increased as imports are forecast up 1.0 million cwt to a record of 28.0 million on higher medium- and short-grain imports into Puerto Rico. The all rice export forecast is lowered 2.0 million cwt to 96.0 million with all of the reduction in long-grain on continued strong competition in Western Hemisphere markets from South American suppliers. All rice ending stocks are increased 2.5 million cwt to 46.7 million and are 59 percent higher than 2017/18. The projected 2018/19 all rice season-average farm price (SAFP) is raised this month $0.30 per cwt at the midpoint to a range of $11.50 to $12.50, as a higher projected medium- and short-grain SAFP more than offsets a lower long-grain SAFP.
Global 2018/19 rice supplies are increased by 17.7 million tons to 651.4 million, mostly due to revisions for China. USDA incorporated China’s NBS rice production revisions from 2007/08 through 2017/18, which consequently raised its supplies over this multi-year period. The cumulative increases in China’s ending stocks result in the large upward adjustment in 2018/19 global supplies. Additionally, China’s 2018/19 production forecast is raised on larger harvested area, reflecting the NBS revisions for prior years. Global consumption is fractionally lower at 488.4 million tons as reductions in Bangladesh, Afghanistan, and Pakistan are not completely offset by increases in other countries. World trade is lowered 0.6 million tons to 48.9 million on reduced exports for India, Argentina, and the United States. Global ending stocks are raised 17.8 million tons to a record 163.0 million with China now accounting for 69 percent of 2018/19 world stocks, compared to 66 percent last month.
The U.S. soybean outlook is for lower production, reduced exports, and increased ending stocks. Soybean production is forecast at 4,600 million bushels, down 90 million on lower yields. The soybean yield is projected at 52.1 bushels per acre, down 1.0 bushel mainly on reductions for Iowa and Illinois. Soybean exports are reduced 160 million bushels to 1,900 million with lower imports projected for China. The forecast protein consumption growth rate for China is reduced, which is reflected in the limited number of U.S. export sales this fall. Although sales to China are minimal, strong sales to other markets are expected to continue, which is likely to result in a larger share of U.S. exports in the second half of the marketing year. With lower exports and slightly higher crush, soybean ending stocks are projected at 955 million bushels, down 70 million.
The U.S. season-average soybean price range is forecast at $7.60 to $9.60 per bushel, unchanged at the midpoint. Soybean meal and soybean oil price forecasts are also unchanged at $290 to $330 per short ton and 28.0 to 32.0 cents per pound, respectively.
The 2018/19 global oilseed outlook includes lower production, exports, and increased stocks compared to last month. Lower production of soybeans, cottonseed, peanuts, and rapeseed is partly offset with a higher forecast for sunflowerseed. Reduced global peanut and rapeseed production is largely driven by historical revisions issued by China’s NBS. Global soybean production is reduced 2.0 million tons with lower production for the United States and Argentina partly offset by increases for China, India, and Ukraine.
Global soybean exports are reduced 2.0 million tons to 155.4 million. Lower U.S. exports are partly offset by a 2-million-ton increase for Brazil and higher shipments out of Ukraine and Russia. With limited U.S. commitments to China so far this marketing year, China’s soybean imports are lowered 4 million tons to 90 million. China’s crush is also lowered, but protein meal consumption growth is expected to remain positive with support from available foreign exportable supplies. South America is expected to capture more of China’s soybean market while the United States is likely to capture more market share in the rest of the world, particularly in the second half of the marketing year when those imports typically trend higher.
Global oilseed stocks are up 2.4 million tons to 126.2 million mainly on higher stocks of soybeans and sunflowerseed. Global soybean stocks are up 2.0 million tons to 112.1 million, with higher stocks in Argentina, India, and the United States that are partly offset by lower stocks in China and Brazil.
LIVESTOCK, POULTRY, AND DAIRY
The forecast for 2018 total red meat and poultry production is lowered from last month as lower beef, pork, and turkey production more than offsets higher broiler production. Beef production is reduced from the previous month on a slower expected marketing pace for fed cattle in the fourth quarter. The pork production forecast is reduced on lower expected fourth-quarter hog slaughter and lighter carcass weights. The broiler production forecast is raised as higher reported third-quarter slaughter more than offsets small declines in fourth-quarter production. The turkey production forecast is reduced on thirdquarter slaughter data; no change is made to the outlying quarter. The 2018 egg production forecast is unchanged from last month.
For 2019, the total red meat and poultry forecast is reduced from the previous month on lower expected beef, pork, and turkey production. Beef production is reduced on lower expected steer and heifer slaughter in the first half of 2019. Pork production is reduced on lower expected firstquarter hog slaughter and slightly lighter carcass weights. Turkey production is lowered as the sector continues to adjust to relatively weak prices. The 2019 egg and broiler production forecasts are unchanged from the previous month.
Beef import forecasts for 2018 and 2019 are reduced from the previous month on decreased shipments of processing beef from Australia. Beef export forecasts for 2018 and 2019 are raised from the previous month on continued firm global demand for U.S. beef. The 2018 pork import and export forecasts are reduced fractionally on third-quarter trade data. The 2018 broiler import and export forecasts are raised on recent trade data. The 2018 turkey export forecast is reduced on slow global demand. No change is made to the 2019 turkey export forecast.
Cattle and hog price forecasts are raised for 2018 and the first quarter of 2019. The 2018 broiler price forecast is raised from the previous month on current prices, but no change is made to the 2019 price forecast. The 2018 turkey price forecast is lowered from last month, but no change is made to 2019 forecast. The 2018 and 2019 egg price forecasts are unchanged from the previous month.
The milk production forecasts for 2018 and 2019 are reduced from the previous month on lower cow numbers; however, stronger growth in milk per cow is expected to partially offset smaller dairy cow numbers. The 2018 fat basis import forecast is unchanged from the previous month, but is reduced for 2019 on lower imports of milk protein concentrates. Fat basis export forecasts for 2018 and 2019 are unchanged from last month. The skim-solids basis import forecasts for 2018 and 2019 are reduced primarily on lower expected imports of milk protein concentrates and casein. The 2018 and 2019 skim-solids basis export forecasts are unchanged.
For 2018, the cheese and butter price forecasts are lowered from last month on recent price weakness, but the nonfat dry milk (NDM) price forecast is unchanged. The whey price forecast is raised from the previous month. For 2019, cheese and butter price forecasts are lowered from the previous month, but NDM and whey price forecasts are raised. The 2018 and 2019 Class III price forecasts are lowered from the last month on lower cheese prices. The 2018 and 2019 Class IV prices are reduced from last month on lower forecast butter prices. The 2018 all milk price forecast is lowered to $16.20 to $16.30 per cwt and the 2019 all milk price is forecast lower at $16.70 to $17.60 per cwt.
This month’s 2018/19 U.S. balance sheet shows lower production, consumption, exports, and ending stocks. Production is reduced 1.35 million bales due mainly to decreases in the Southeast, reflecting the impact of adverse weather. Domestic mill use is reduced 100,000 bales and exports are reduced 500,000 bales. Projected ending stocks in 2018/19 are 700,000 bales lower this month, at 4.3 million bales or 24 percent of use. The marketing-year-average price received by producers is forecast between 71.0 and 77.0 cents per pound, with a midpoint of 74.0 cents, 1 cent above last month.
This month’s 2018/19 world supply and demand forecasts include lower beginning stocks, production, consumption, trade, and ending stocks. Historical revisions to Benin’s exports resulted in a 375,000-bale decrease in 2018/19 beginning stocks there, accounting for much of this month’s 500,000-bale decline in global beginning stocks. Forecast global production is reduced 2.3 million bales as smaller expected crops in the United States, India, Pakistan, and Turkmenistan offset an increase in Benin. Consumption is reduced 875,000 bales, with smaller expected mill use in India, Pakistan, Turkey, Brazil, Indonesia, and the United States. Global ending stocks are 1.8 million bales lower this month, at 73 million bales or 57 percent of mill use.
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