Crops Livestock News

May WASDE: U.S. corn will not be record setting

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The USDA released their World Agricultural Supply and Demand Estimate Forecast (WASDE) today. Here’s what you need to know:

Wheat: U.S. wheat supplies for 2017/18 are projected down 9 percent from 2016/17 on lower production, which is partially offset by higher beginning stocks.  All wheat production for 2017/18 is projected at 1,820 million bushels, down nearly 500 million bushels from the prior year.  The all wheat yield is projected at 47.2 bushels per acre, down 10 percent from last year’s record. Winter wheat benefited from diminishing drought conditions in the Plains and Midwest.  However, a late April snow storm affected large portions of the Hard Red Winter wheat belt, especially western Kansas.  The season-average farm price is projected at $3.85 to $4.65 per bushel.  The mid-point of this range is up $0.35 from the previous year’s low level.

Corn: The U.S. feed-grain outlook for 2017/18 is for lower production, domestic use, exports, and ending stocks. The corn crop is projected at 14.1 billion bushels, down from last year’s record high with a lower forecast area and yield. The yield projection of 170.7 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer weather, estimated using the 1988-2016 time period.

Total U.S. corn use in 2017/18 is forecast to decline 2 percent from a year ago as a slight increase in domestic use is more than offset by lower exports.  Food, seed, and industrial (FSI) use is projected to rise 80 million bushels to 7.0 billion due to increased use of corn to produce ethanol for fuel and expected growth in non-ethanol FSI.  U.S. corn exports are down 350 million bushels, as a 1.0-billion-bushel year-over-year increase in the combined corn exports of Brazil and Argentina during 2016/17  is expected to cut into the 2017/18 U.S. shipping season.  With total supply falling faster than use, 2017/18 U.S. ending stocks of corn are down 185 million bushels. The season-average farm price is projected at $3.00 to $3.80 per bushel, unchanged at the midpoint from 2016/17.

Rice: U.S. 2017/18 all rice production is forecast at 201.0 million cwt, down 23.1 million from the previous year, all on a large reduction in long grain acreage as indicated by the NASS Prospective Plantings survey issued March 31.  Total 2017/18 rice supplies are forecast to decrease 7 percent from the previous year to 273.1 million cwt, primarily on the reduction in long grain.

Soybeans: The 2017/18 outlook for U.S. soybeans is for higher supplies, crush, exports, and ending stocks.  The soybean crop is projected at 4,255 million bushels, down 52 million from last year’s record crop with a forecast lower trend yield more than offsetting higher harvested area.  With sharply higher beginning stocks, soybean supplies are projected at 4,715 million bushels, up 4 percent from 2016/17.

Domestic soybean meal disappearance is forecast to increase with expected gains in U.S. meat production.  U.S. soybean meal exports are forecast at 12.4 million short tons, leaving the U.S share of global trade slightly lower than in 2016/17.  With increased supplies and lower projected prices, U.S. soybean exports are forecast at 2,150 million bushels, up 100 million from the revised 2016/17 projection.  The 2017/18 U.S. season-average soybean price range is forecast at $8.30 to $10.30 per bushel compared with $9.55 per bushel in 2016/17.  Soybean meal prices are forecast at $295 to $335 per short ton, compared with $320 per ton for 2016/17.  Soybean oil prices are forecast at 30.0 to 34.0 cents per pound compared with 31.75 cents for 2016/17.

Sugar: U.S. fiscal year 2016/17 beet sugar production is decreased 64,000 short tons, raw value (STRV) based on lower expected sucrose recovery.  Cane sugar production in Texas is reduced by 2,795 STRV based on final processor reporting.  Sugar production for 2017/18 is projected at 8.700 million STRV, the sum of beet sugar production of 4.950 million and cane sugar production of 3.750 million.

Cotton: A projected 2017/18 U.S. cotton crop of 19.2 million bales is expected to sharply increase next season’s ending stocks.  Production is anticipated to rise 12 percent from 2016/17, based on 12.2 million planted acres as indicated in Prospective Plantings, combined with below-average abandonment and average yields. Domestic mill use is projected higher at 3.4 million bales, while exports are expected to fall to 14.0 million, as competitors’ supplies grow. Ending stocks are projected at 5.0 million bales, or 29 percent of total use. The preliminary range for the marketing year average price received by producers is 54.0 to 74.0 cents per pound.

Livestock, Poultry, and Dairy:  Total red meat and poultry production for 2018 is projected higher than 2017 on increased livestock and poultry production.  Cattle placements during second half 2017 and early 2018 are forecast higher; these cattle will be slaughtered during 2018, supporting higher beef production.  Pork production is forecast higher on expected increased farrowings and continued gains in sow productivity.  Higher broiler and egg production reflects expanded production in response to moderate feed prices and relatively strong 2017 prices.  Turkey production is forecast higher as demand strengthens.

Milk production for 2018 is forecast higher on stronger milk prices and moderate feed prices.  Commercial exports on fat and skim-solids bases are forecast higher on stronger global demand.  Fat basis imports are forecast modestly higher in 2018 while skim-solids basis imports are forecast lower relative to 2017.  The all milk price is forecast at $17.55 to $18.55 per cwt for 2018.

Any views or opinions expressed in this article are those of the author and do not reflect those of AGDAILY. Comments on this article reflect the sole opinions of their writers.