WASDE: Corn Ending Stocks Increase, Soybean Stocks Decrease

Corn production is forecast at 13.9 billion bushels, up 26 million from the July projection as a decline in harvested acres is virtually offset by an increase in yield. ( Farm Journal )

WHEAT: The outlook for 2019/20 U.S. wheat this month is for greater supplies, increased use and higher ending stocks. U.S. wheat production is raised 59 million bushels to 1,980 million on increased winter wheat and other spring wheat production as indicated by the NASS August Crop Production report. Estimated food use for the 2018/19 market year is lowered 5 million bushels to 955 million based on the latest NASS Flour Milling Products report. Food use for the 2019/20 market year is also lowered 5 million bushels to 960 million. Feed and residual use is raised 20 million bushels to 170 million on greater wheat supplies and more competitive prices. Projected 2019/20 U.S. wheat exports are raised 25 million bushels to 975 million on lower exportable supplies from key competitors, notably the EU, Kazakhstan, and Russia. Ending stocks for 2019/20 are raised 14 million bushels to 1,014 million, down 5 percent from the previous year. The season-average farm price is lowered $0.20 per bushel to $5.00 on updated NASS prices, lower U.S. corn prices, and reduced wheat price expectations for the remainder of the market year.

Foreign 2019/20 wheat supplies are reduced 4.5 million tons, primarily on lower production in several major competing exporters. The production declines are led by a 2.0-million-ton reduction for Turkey on both an updated harvested area estimate as well as a lower yield. EU, Kazakhstan, and Russia are lowered 1.3 million tons, 1.0 million tons, and 1.2 million tons, respectively. These reductions are based on harvest results confirming yield losses due to hot and dry June conditions in winter wheat regions and expanding dryness in the spring wheat areas of Russia and Kazakhstan. Moldova production is also down 0.2 million tons. Partly offsetting is a 0.5-million-ton production increase for Argentina and a 0.2-million-ton increase for Ukraine. Projected 2019/20 global exports are down 0.5 million tons led by a 1.0-million-ton reduction for Kazakhstan and 0.5-million-ton reductions each for the EU and Russia, all on the smaller crops. Partly offsetting is a 0.7-million-ton increase for the United States and 0.5-million-ton increases for both Argentina and Ukraine. Projected 2019/20 world consumption is 2.0 million tons lower on both reduced feed and residual use and food and industrial consumption. With supplies falling more than use, global ending stocks are revised 1.1 million tons lower to 285.4 million tons, but remain record large.

COARSE GRAINS: This month’s 2019/20 U.S. corn outlook is for larger supplies, reduced exports and corn used for ethanol, and greater ending stocks. Corn production is forecast at 13.9 billion bushels, up 26 million from the July projection as a decline in harvested acres is virtually offset by an increase in yield. The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 3.5 bushels higher than last month’s projection. Today’s Crop Production report indicates that Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio, and South Dakota are forecast to have yields below a year ago. Of the major producing states, only Missouri is forecast to have yields above a year ago. Corn used for ethanol is reduced 25million bushels to 5.5 billion. Exports are lowered reflecting U.S. export competitiveness and expectations of increasing competition from Argentina, Brazil, and Ukraine. With supply rising and use falling, ending stocks are up 171 million bushels to 2.2 billion. The season average corn price received by producers is lowered 10 cents to $3.60 per bushel.

This month’s 2019/20 foreign coarse grain outlook is for larger production, increased trade, and greater stocks relative to last month. Ukraine corn production is projected record high, reflecting increases to both area and yield. Cool temperatures and timely rain during reproduction are expected to boost yield prospects. EU corn production is raised, as increases for Romania, Hungary, and Bulgaria more than offset declines for Poland, France, and Germany. Barley production is raised for Argentina and Russia, but lowered for Turkey, the EU, and Kazakhstan. Major global coarse grain trade changes for 2019/20 include corn export increases for Ukraine and Serbia, with a partially-offsetting reduction for Russia.

For 2018/19, exports for Argentina and Brazil are raised for the local marketing year beginning March 2019, based on larger-than-expected shipments during the month of July. Corn imports for 2019/20 are raised largely reflecting increases for the EU and Indonesia. For China, corn feed and residual use is lowered based on lower forecast protein meal consumption. Foreign corn ending stocks are higher relative to last month, mostly reflecting increases for China, EU, Ukraine, and Turkey partially offset by reductions for Argentina and Indonesia.

OILSEEDS: U.S. oilseed production for 2019/20 is projected at 111.5 million tons, down 4.5 million from last month mainly due to a lower soybean production forecast. Soybean production is forecast at 3.68 billion bushels, down 165 million on lower harvested area. Harvested area is forecast at 75.9 million acres, down 3.4 million from the NASS June Acreage Report led by reductions for Ohio and South Dakota. These States account for almost half of the national reduction. The first survey-based soybean yield forecast of 48.5 bushels per acre is unchanged from last month but 3.1 bushels below last year’s level. With lower production partly offset by higher beginning stocks, soybean supplies for 2019/20 are projected at 4.77 billion bushels, down 3 percent from last month. U.S. soybean exports are reduced 100 million bushels to 1.78 billion reflecting reduced global import demand, mainly for China. Soybean ending stocks are projected at 755 million bushels, down 40 million. The U.S. season-average soybean price for 2019/20 is forecast at $8.40 per bushel, unchanged from last month. The soybean meal and oil price forecasts are also unchanged at $300 per short ton and 29.5 cents per pound, respectively. Changes for 2018/19 include reduced soybean crush, reflecting lower domestic use and exports of soybean meal. Soybean ending stocks are projected at 1.07 billion bushels, up 20 million.

This month’s 2019/20 global oilseed supply and demand forecasts include lower production, trade, and stocks compared to last month. Lower soybean, rapeseed, and peanut production are partly offset by higher sunflowerseed output. Rapeseed production is lowered for the EU mainly on a lower area and yield for France. India’s soybean and peanut harvested area is reduced due to slow planting progress to date. Ukraine’s sunflowerseed production is forecast higher, as timely rainfall in late July and early August boosted yield prospects. Global 2019/20 oilseed exports are reduced 3.0 million tons mainly on a 2-million-ton reduction to soybean trade. China’s soybean imports are lowered 2 million tons to 85 million reflecting lower soybean meal crush in 2019/20. With crush also lowered in 2018/19, China’s protein meal consumption growth is forecasted flat in 2019/20. Global 2019/20 soybean ending stocks are lower relative to last month due to lower stocks in the United States and China.

Read the full report here.