WASDE: Corn Beginning and Ending Stocks Up Slightly

USDA ( MGN Image )

From USDA:


WHEAT:  U.S. 2020/21 wheat supplies are up on a larger crop and a slight increase in beginning stocks.  The change in beginning stocks reflects a 5-million-bushel reduction in 2019/20 exports.  Winter wheat production is forecast up 11 million bushels to 1,266 million with increases in Hard Red Winter and White Winter more than offsetting small decrease for Soft Red Winter.  Total 2020/21 wheat production is now forecast at 1,877 million bushels, and total supplies are raised 16 million to 3,000 million.  Domestic use and exports for the new marketing year are unchanged this month, and ending stocks are raised 16 million bushels to 925 million, which is a 6-year low.  

World 2020/21 wheat supplies are raised 5.7 million tons on a 4.9-million-ton production increase and higher beginning stocks.  India production is raised 4.2 million tons, and Australia is up 2.0 million, both on updated government statistics.  India’s crop is projected to be record-large, and Australia’s crop is expected to rebound on improved conditions following two consecutive years of drought.  Turkey and China are both increased by 1.0 million tons.  Partly offsetting these changes are crop reductions of 2.0 million tons for the EU and 1.5 million for Ukraine, both reflecting dry conditions during key parts of the growing season.  Projected 2020/21 global exports are raised 0.9 million tons to 188.9 million, led by a 2.0-million-ton increase for Australia on larger supplies, and a 1.0-million increase for Russia on reduced export competition from Ukraine.  Exports are lowered 1.5 million tons for Ukraine and 0.5 million for the EU, both on smaller crops.  With increased supplies, and global use lowered fractionally, world ending stocks are raised 6.0 million tons to a record-high 316.1 million, with China and India accounting for 51 percent and 10 percent of the total, respectively.  

COARSE GRAINS:  This month’s 2020/21 U.S. corn outlook is little changed from last month, with fractional increases to beginning and ending stocks.  Beginning stocks are raised, as a 45-million-bushel reduction in estimated production for 2019/20 is largely offset by a 50-million-bushel reduction in projected corn used for ethanol.  Corn used for ethanol is lowered reflecting a slower-than-expected rebound in ethanol production as indicated by Energy Information Administration data during the month of May and into early June.  For 2020/21, with supply up slightly and no changes to projected use, ending stocks are 5 million bushels higher at 3.3 billion bushels.  The season-average farm price is unchanged at $3.20 per bushel.

The global coarse grain production forecast for 2020/21 is raised 3.2 million tons to 1,484.6 million.  This month’s foreign coarse grain outlook is for larger production, increased use, and lower stocks relative to last month.  Brazil corn production is raised based on higher expected area.  Barley production is raised for the EU, based mostly on a forecast increase for the United Kingdom that is partly offset by a reduction for France.  Barley production is raised for Australia, but lowered for Ukraine, India, and Russia.  For 2019/20, Brazil corn production is unchanged, as higher indicated area is offset by a reduction in yield.  Yield prospects for much of the Center-West are generally favorable in contrast to the South where conditions have been poor. 

Major global trade changes for 2020/21 include a larger corn export forecast for Zambia, with increases in corn imports for Thailand and Honduras.  Barley exports are lowered for Australia, based on a reduction in projected imports for China.  For 2019/20, corn exports are raised for Argentina but lowered for Brazil for the local marketing year beginning March 2020 based on observed data through early June.  Foreign corn ending stocks for 2020/21 are lowered from last month, mostly reflecting reductions for China, Argentina, South Africa, and Paraguay that more than offset increases for Brazil and India.

RICE: The outlook for 2020/21 U.S. rice this month is for larger supplies, greater domestic use, reduced exports, and increased ending stocks.  Most of the 2020/21 revisions are the result of 2019/20 supply and use changes.  The 2020/21 all rice beginning stocks are increased 1.5 million cwt to 32.0 million, a result of higher 2019/20 imports, now forecast at a near-record 33.5 million, raising 2019/20 ending stocks.  All of the increase in 2019/20 imports is for long-grain, based on a record import pace to date, primarily aromatics from Thailand.  Long-term growth in imports is expected to continue in 2020/21 as projected imports are raised 1.0 million cwt to a record-high 33.6 million.  The combination of increased beginning stocks and higher imports raises 2020/21 total supplies by 2.5 million cwt to 281.8 million.  Total 2019/20 domestic use and residual is raised 2.0 million cwt to 135.0 million, based on the higher import forecast.  Similarly, total 2020/21 domestic use is also raised by 2.0 million cwt to 139.5 million, based on higher imports.  Total 2019/20 exports are lowered by 2.0 million cwt to 96.0 million, all for long-grain as the U.S. is becoming increasingly uncompetitive as the marketing year nears completion.  Total 2020/21 exports are reduced by 1.0 million cwt to 99.0 million, all based on lower long-grain exports as the U.S. is expected to remain uncompetitive early in the marketing year.  Projected 2020/21 all rice ending stocks are raised 1.5 million cwt to 43.3 million, up 35 percent from the 2019/20 revised ending stocks.  The 2020/21 all rice season-average farm price (SAFP) is unchanged at $12.90 per cwt, compared to the upwardly revised 2019/20 SAFP of $13.10.  

The 2020/21 global outlook is for larger supplies, fractionally lower consumption and trade, and increased stocks.  Supplies are raised by 1.0 million tons to a record 683.3 million, mainly on higher beginning stocks for China and Thailand.  World production is only fractionally higher at 502.1 million tons as increases for Brazil and Nigeria are almost completely offset by a reduction for Vietnam, with global production remaining record high.  World 2020/21 consumption is lowered by 0.1 million tons to 498.0 million, still a record, as decreases for Vietnam and Philippines are not completely offset by increases for Brazil, China, Nigeria, and the U.S.  Global trade is reduced 0.3 million tons to 44.9 million, primarily on lower exports from Vietnam and China.  Projected 2020/21 world ending stocks are raised 1.2 million tons to a record high of 185.4 million with China accounting for 63 percent of the total.

OILSEEDS:  This month’s U.S. soybean supply and use projections for 2020/21 include higher beginning stocks, higher crush, and slightly lower ending stocks.  Beginning stocks are raised 5 million bushels with higher crush for 2019/20 more-than-offset with lower production and a lower export forecast.  Lower 2019 production reflects the latest re-survey by NASS for North Dakota.  The 2019/20 soybean crush is raised 15 million bushels reflecting increased domestic soybean meal use.  Soybean exports are reduced 25 million bushels on increased competition from South America.  Increased beginning stocks for 2020/21 are more than offset with a higher soybean crush forecast, which is raised along with increased domestic soybean meal use.  With higher soybean crush more than offsetting higher beginning stocks, 2020/21 ending stocks are projected at 395 million bushels.  The 2020/21 season-average soybean and product price forecasts are unchanged this month.

The 2020/21 global oilseed supply and demand forecasts include slightly higher production and lower ending stocks compared to last month.  Higher peanut, soybean, and sunflowerseed production is partly offset by lower cottonseed output.  A notable revision to production is for EU canola, lowered 0.2 million tons to 16.8 million, based largely on lower yields for Germany.  The EU revision is offset by higher Australian canola production.  The 2020/21 soybean ending stocks are lowered 2.1 million tons to 96.3 million, mainly reflecting lower carryin due to revisions to 2019/20 balance sheets.  For 2019/20, soybean exports are increased 1 million tons each for Argentina and Brazil based on the recent pace of shipments and reflect increased crush demand and imports for China.  Partly offsetting is reduced 2019/20 U.S. exports.  These revisions result in higher stocks for China and lower stocks for South America.

SUGAR:  U.S. sugar supply for 2019/20 is increased 284,479 short tons, raw value (STRV) to 13.822 million based on an increase in estimated imports.  Imports from Mexico are increased by 204,479 STRV on greater export supply availability.  High-tier tariff imports are increased by 80,000 STRV to 230,000 on pace and on favorable margins between U.S. and world sugar prices.  Deliveries for human consumption for 2019/20 are reduced by 75,000 STRV to 12.050 million based on an initial analysis of the effects of pandemic lockdowns on the demand for sugar.  Deliveries for human consumption for 2020/21 are unchanged at 12.125 million STRV.  Ending stocks for 2019/20 are residually calculated at 1.632 million STRV, an increase of 359,479.  The ending stocks-to-use ratio is at 13.4 percent, up from 10.4 percent last month.  For 2020/21 the increase in beginning stocks is exactly offset by a decrease in projected imports from Mexico.  There are no other changes made for 2020/21. The Secretary of Agriculture has not yet announced additional quantities of specialty sugar beyond the WTO minimum quantity.  The ending stocks-to-use ratio for 2020/21 remains at 12.0 percent.

Mexico production for 2019/20 is estimated at 5.230 million metric tons (MT).  This is an increase of 105,000 MT on increases in field and factory yields only partially offset by lower area harvested as the production campaign winds down.  Deliveries of domestically produced sugar to the IMMEX program are reduced by 70,000 MT based on reporting by the FAS Mexico City Post.  Exports to the U.S. market are increased by 175,000 MT to 1.074 million on the increase of exportable supply.  There are no changes for the 2020/21 Mexico sugar balance.  Ending stocks for both 2020/21 and 2019/20 are set equal to 2.5 months of forecast domestic sugar deliveries before the start of the succeeding sugarcane harvest.  Although total exports for 2020/21 are unchanged, exports to the U.S. market are reduced by 307,245 MT and exports to third-country destinations are increased by the same amount. 

LIVESTOCK, POULTRY, AND DAIRY:  The forecast for 2020 red meat and poultry production is raised from last month as higher forecast beef, pork, and broiler production more than offsets lower turkey production.  The increase in beef and pork production largely reflects a faster-than-anticipated recovery in the pace of slaughter.  The broiler production forecast is raised as broiler hatchery data points towards higher expected production in the second half of the year.  Turkey production is lowered slightly on recent production data and a slower expected growth in expansion.  Egg production is lowered from the previous month. 

The 2021 red meat and poultry production forecast is raised from the previous month.  The beef production forecast is raised on higher expected cattle placements in the second half of 2020 which will be marketed in 2021.  Pork production is unchanged from last month.  The Quarterly Hogs and Pigs report will be released on June 25 and provide an indication of producers’ farrowing intentions for the second half of 2020; these are hogs which will likely be marketed in first-half 2021.  The broiler production forecast for 2021 is unchanged from last month, but turkey production is reduced as forecast slower growth in 2020 production is carried into 2021.  The egg production forecast is reduced from the previous month. 

The beef import forecast is raised for 2020 on recent trade data and increased domestic demand for processing grade beef, while the beef export forecast is raised on higher expected beef exports later in the year.  No change is made to the 2021 beef trade forecast.  The pork export forecast for 2020 is raised from the previous month, largely on the current pace of exports.  No change is made to the 2021 pork trade forecast.  No change is made to 2020 and 2021 broiler export forecasts.  Turkey export forecasts are lowered for 2020 and 2021 on weaker export demand. 

For 2020, cattle price forecasts are raised, reflecting current price strength and increased packer demand.  For 2021, cattle prices are also raised on expected continued strength of packer demand in the first part of the year.  The 2020 hog price forecast is reduced on current price weakness and increased supply pressure.  Broiler price forecasts are reduced for the remainder of the year while the turkey price forecast is raised slightly on higher second-quarter prices.  Egg price forecasts for 2020 are reduced on current price weakness and weaker demand.  The 2021 hog, broiler, turkey and egg price forecasts are unchanged from last month. 

Milk production for 2020 is raised from last month on higher expected cow numbers.  The fat basis import forecast is raised from the previous month on higher imports of butter fat products, while the fat basis export forecast is reduced on lower expected sales of cheese.  The 2020 skim-solids basis import forecast is raised from last month on recent trade data and expectations of higher imports of a number of dairy products.  The skim-solids basis export forecast is raised primarily on higher skim milk powder and lactose exports.  Price forecasts for cheese, butter, and nonfat dry milk are raised from the previous month on recent price strength and stronger anticipated demand.  The whey price forecast is lowered from last month. Class III and Class IV prices are raised for 2020.  The all milk price forecast is raised to $16.65 per cwt for 2020. 

The 2021 milk production forecast is raised from last month on higher expected cow numbers and stronger growth in milk per cow.  The fat basis import forecast is reduced while the export forecast is unchanged.  The skim-solids basis import forecast is reduced from the previous month while the export forecast is unchanged.  For 2021, cheese, butter, and nonfat dry milk price forecasts are raised from the previous month while whey is lowered.  The 2021 Class III and Class IV price forecasts are raised from last month.  The all milk price forecast is raised to $16.20 per cwt for 2021.

COTTON:  The most significant revision to this month’s U.S. cotton supply and demand estimates is a 200,000-bale decrease in 2019/20 mill use, to 2.5 million bales.  U.S. mill use in 2020/21 was also revised downward by 100,000 bales, and ending stocks are now projected at 7.3 million bales in 2019/20 and 8.0 million bales in 2020/21.  While the 43 percent stocks-use ratio projected for 2020/21 is marginally higher than the year before, and is substantially above recent levels, it would still be below the 55 percent ratio realized in 2007/08.

The 2020/21 world cotton projections include slightly smaller production, reduced consumption, and higher beginning and ending stocks.  World ending stocks are 5.2 million bales higher this month, reflecting cuts to world consumption of slightly more than 2 million bales each in 2019/20 and 2020/21, and revised production estimates for Argentina starting with 2017/18 that added an additional 930,000 bales to stocks.  World production in 2020/21 is revised downward by 215,000 bales as higher production in Argentina and Tanzania is offset by reductions for Turkey, Uzbekistan, and some smaller countries.  World consumption in 2020/21 is revised downward due to changes in a number of countries, led by a 1-million-bale reduction in the forecast for China and a 500,000-bale reduction for India.  At nearly 105 million bales, world ending stocks in 2020/21 are expected to be their largest since 2014/15.