WASDE: Corn and Wheat See Higher Ending Stocks, Soybeans Lowered

USDA's World Agricultural Supply and Demand Estimates ( Jo Windmann )


Projected 2017/18 U.S. wheat ending stocks are raised this month by 30 million bushels to 1,064 million, all on lower feed and residual use. The NASS Grain Stocks report, issued March 29, implied less feed and residual usage for the third quarter (December-February) than previously estimated. This report also showed record U.S. corn stocks on March 1, which are expected to continue displacing wheat for feed use for the remainder of 2017/18. No other supply or use categories are changed this month. Based on NASS prices and marketings reported to date along with price expectations for the rest of 2017/18, the season-average farm price is unchanged at the range of $4.60 to $4.70 per bushel.

World 2017/18 wheat supplies increased this month by nearly 3.0 million tons as production is raised to a new record of 759.8 million, mainly on Morocco’s higher
production estimate as it recovered from a severe drought in 2016/17. Global supplies also increased with a multi-year reduction in Iran’s food, seed, and industrial use, which raised carry-in stocks by nearly 2.0 million tons.

Projected global 2017/18 trade is virtually unchanged on increased exports from Russia, Kazakhstan, and Argentina nearly offsetting lower exports from the EU and other Exporters. Russia’s exports are raised 1.0 million tons to 38.5 million, which surpasses last year’s record exports by more than 10 million. Russia continues to displace the EU and other exporters in several markets. Imports are lowered for Morocco, Brazil, and Colombia while increased for Algeria, Ethiopia, Japan, Kenya, Turkey, and the Philippines. Projected 2017/18 world consumption is higher, primarily on increases in the EU and Indonesia, which more than offset reductions in Iran, India, and the United States. However, the increase in global supplies still exceeds the additional consumption as 2017/18 global ending stocks are 2.3 million tons higher this month at 271.2 million, a new record.


This month’s 2017/18 U.S. corn outlook is for reduced feed and residual use, slightly lower food, seed, and industrial (FSI) use, and increased ending stocks. FSI is lowered 5 million bushels, as a 10-million-bushel reduction in the amount of corn used for glucose and dextrose is partially offset by a 5-million-bushel increase in corn used for starch. Projected feed and residual use is lowered 50 million bushels to 5,500 million bushels based on indicated disappearance during the first half of the marketing year in the March 29 Grain Stocks report. With supply unchanged and total use declining, ending stocks are raised 55 million bushels. The projected range for the season-average corn price received by producers is unchanged at the midpoint with the range narrowed to $3.20 to $3.50 per bushel.

Global coarse grain production for 2017/18 is forecast 7.0 million tons lower than last month to 1,315.0 million. This month’s foreign coarse grain outlook is for lower production, consumption, trade, and stocks relative to last month. Argentina corn production is down based on reductions to both harvested area and yield. Yield results have been below expectations, while dry conditions are expected to increase the amount of corn harvested for forage or grazed. Brazil corn production is reduced reflecting expectations of lower second-crop corn area. If realized, the combined corn production of Argentina and Brazil for 2017/18 would be 14.5 million tons below the record reached in 2016/17. Other coarse grain production changes of note for 2017/18 include lower barley production for Belarus and reduced corn production for Paraguay, with corn production increases for Mexico and South Africa.

Major global trade changes for 2017/18 include lower projected corn exports for Brazil and Argentina, with reduced export competition from these countries expected to impact the first half of the 2018/19 marketing year in the United States. Corn imports are lowered for Iran, Malaysia, Taiwan, Mexico, and Chile, with partially offsetting increases for Bangladesh and Turkey. Foreign corn ending stocks are lowered 2.8 million tons from last month, with the largest declines for Argentina, Paraguay, and Brazil.


U.S. 2017/18 rice ending stocks are raised 4.1 million cwt to 33.3 million, mostly on decreased exports. These ending stock levels still remain below the 5-year average. The 4.0-million-cwt decrease in exports is divided evenly between long-grain and medium- and short-grain. Rough and milled rice exports are also lowered by 3.0 and 1.0 million cwt, respectively. The export reduction reflects a slow pace to date as well as increased competition in core Western Hemisphere export markets. The all-rice season average farm price is raised $0.10 per cwt at the midpoint to a range of $12.40 to $12.80. This increased price is all due to higher projected medium- and short-grain prices.

Global 2017/18 rice production is raised 1.2 million tons to a new record led by 0.3-million-ton increases each for Brazil, Burma, Pakistan, and the Philippines. Global rice exports are raised 0.8 million tons with a 0.3-million-ton increase for Thailand and 0.2-million-ton increases each for Burma, India, and Pakistan. Imports are raised 0.5 million tons for Indonesia and 0.3 million tons for Bangladesh. Global domestic use is
reduced fractionally. With supplies increasing and total use decreasing, world ending stocks are raised 1.4 million tons to 144.4 million and are the second highest stocks on record.


U.S. soybean supply and use changes for 2017/18 include increased crush, lower seed and residual use, and lower ending stocks. Soybean crush is projected at a record 1,970 million bushels, up 10 million reflecting higher soybean meal prices which are supporting crush margins. Seed use is reduced in line with the 
plantings indicated in the March 29 Prospective Plantings report. With exports unchanged, soybean ending stocks are projected at 550 million bushels, down 5 million. Soybean oil changes include increased production, exports, and ending stocks.Soybean oil used for biodiesel is reduced this month reflecting lower-than-expected use through the first four months of the marketing year.

The season-average soybean price is forecast at $9.10 to $9.50, unchanged at the midpoint. The soybean oil price is projected at 30.5 to 32.5 cents per pound, also unchanged at the midpoint. Soybean meal prices are projected at $340 to $360 per short ton, up $10.00 at the midpoint.

The 2017/18 global oilseed supply and demand forecasts include lower production, exports, crush, and ending stocks compared to last month. Global oilseed production is lowered 5.7 million tons to 568.8 million, with a 6.1-million-ton reduction for soybean production and slightly higher projections for rapeseed, sunflowerseed, copra, and palm kernel. Lower soybean production for Argentina, India, and Uruguay is partly offset by
higher production for Brazil. Soybean production for Brazil is forecast at a record 115.0 million tons, up 2.0 million on higher projected yields for Mato Grosso, Mato Grosso do Sul, and Parana due to beneficial rainfall during the growing season. For Argentina, production is lowered 7.0 million tons to 40.0 million on reduced harvested area and yield, reflecting dry conditions during January through March. With reduced production,
soybean crush for Argentina is lowered 1.8 million tons to 41.2 million, resulting in lower soybean meal and oil supplies traded globally. Other oilseed production changes include reduced sunflower and peanut production for Argentina, higher sunflowerseed production for the European Union, and increased rapeseed production for Belarus.

Global oilseed trade for 2017/18 is projected at 174.1 million tons, down 0.6 million on lower soybean, peanut, and rapeseed shipments. Soybean exports are reduced 0.2 million tons as higher exports for Brazil, Russia, and Ukraine are offset by lower exports for Argentina and Uruguay. Peanut and rapeseed exports are lowered for Senegal and the European Union, respectively. Global soybean ending stocks are lowered 3.6 million tons to 90.8 million with reductions mainly for Argentina, Brazil, and the EU.


U.S. beet sugar production is decreased 80,000 short tons raw value (STRV), to 5.139 million based on reduced sucrose recovery. Florida cane sugar production is reduced by 19,287 STRV to 1.973 million based on the latest processor reports. High-tier tariff imports for 2017/18 are increased by 5,000 STRV to 15,000 based on pace to date. Ending stocks for 2017/18 are residually projected at 1.859 million STRV, implying a 
stocks-to-use ratio of 14.7 percent, down from last month’s 15.5 percent. The Mexico sugar supply and use balance is unchanged from last month.


The 2018 forecast for total red meat and poultry production is lowered from last month as forecasts for all major meats are reduced. The beef production forecast is reduced from the previous month on lower first-half slaughter and lighter weights, but this decline is partly offset by higher expected third-quarter slaughter. Pork production is raised for the first quarter based on estimated production data, but lowered for outlying quarters on a slower pace of slaughter and lighter carcass weights. The USDA Quarterly Hogs and Pigs report of March 29, estimated producers farrowed 2 percent more sows during December to February and indicated intentions to farrow about 2 percent more sows in March to
May. These hogs will be ready for slaughter in the second half of 2018. Broiler and turkey production is reduced on recent hatchery data. First-quarter egg production is reduced on recent production data but no change is made to the outlying quarters.

For 2018, beef imports and exports are unchanged from last month. The pork import forecast is unchanged. Pork exports are reduced on weaker expected exports to China although exports to other markets are expected to increase. No change is made to broiler or turkey exports.

Cattle and hog price forecasts are reduced from last month as demand for cattle and hogs has softened and supplies are expected to be large in the coming quarters. The broiler price forecast is raised from last month as stronger demand in the first quarter is expected to carry into subsequent quarters. Turkey prices are reduced through the year on the continued slow recovery in demand. Egg price forecasts are raised on
robust demand.

The milk production forecast for 2018 is unchanged from last month. The 2018 import forecast is reduced slightly on a fat basis, but is unchanged on a skim-solids basis. Exports on fat basis are unchanged from last month, but skim-solids-basis exports are raised on stronger sales of nonfat dry milk and skim milk powder, and lactose.

The annual product price forecast for cheese is unchanged at the midpoint although the range is narrowed. Butter prices are expected to increase more slowly in the second half of the year and the price forecast is reduced. The nonfat dry milk (NDM) price is reduced slightly on current prices. The annual whey price forecast is lowered on larger supplies and weaker demand. The Class III price is lowered on the lower whey price
forecast while the Class IV price is down on lower NDM and butter price forecasts. The all milk price forecast is lowered to $15.60 to $16.10 per cwt.


The 2017/18 U.S. cotton supply and demand forecasts show higher exports and lower ending stocks relative to last month. Production and domestic mill use are unchanged. The export forecast is raised 200,000 bales, to 15.0 million, based on the pace of recent sales and shipments. Ending stocks are now forecast at 5.3 million bales, equivalent to 29 percent of total disappearance. The marketing year price received by producers is projected to average 68 cents per pound, a reduction of 1 cent from last month.

Lower global beginning stocks this month result in lower projected 2017/18 ending stocks despite higher world production and lower consumption. World beginning stocks are 900,000 bales lower this month, largely attributable to historical revisions for Brazil and Australia. World production is about 250,000 bales higher as a larger Brazilian crop more than offsets a decline for Sudan. Consumption is about 400,000 bales lower as lower consumption in India, Indonesia, and some smaller countries more than offsets Vietnam’s increase. Ending stocks for 2017/18 are nearly 600,000 bales lower in total this month as reductions for Brazil, Sudan, the United States, and Australia more than offset an increase for Pakistan.


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