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April WASDE: Brazil, Argentina higher projected corn exports


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

Wheat: U.S. wheat ending stocks for 2016/17 are raised 30 million bushels on lower feed and residual use which more than offsets a slight import reduction.  At 1,159 million bushels, ending stocks are projected to reach a near 30-year high.  Feed and residual use is lowered 35 million bushels to 190 million which reflects lower-than-expected disappearance for the December-February and September-November quarters.

Corn: This month’s 2016/17 U.S. corn outlook is for increased corn used to produce ethanol, reduced feed and residual use, and unchanged ending stocks.  Corn used to produce ethanol is raised 50 million bushels to 5,450 million based on the most recent data from the Grain Crushings and Co-Products Production report. Offsetting is a 50 million bushel reduction in projected feed and residual use to 5,500 million bushels based on disappearance indicated during the first half of the marketing year in the March 31 Grain Stocks. The season-average corn price received by producers is unchanged at the midpoint with the range narrowed to $3.25 to $3.55 per bushel.

Major global trade changes for 2016/17 this month include higher projected corn exports for Brazil and Argentina, with increased competition from these countries expected to impact the 2017/18 marketing year in the United States.

Rice: U.S. rice ending stocks for 2016/17 are lowered 3.0 million cwt on increased exports; at 49.1 million cwt, these would still be the largest all rice ending stocks since 1986/87.  The 3.0-million-cwt export increase is all rough rice, which is record large at 46.0 million cwt, but split with 2.0 million for long-grain and 1.0 million for medium- and short-grain.

Soybeans: U.S. soybean supply and use changes for 2016/17 include higher seed use, reduced residual disappearance, and higher ending stocks.  Seed use is raised in line with the record plantings indicated in the March 31 Prospective Plantings report, and residual use is reduced based on indications from the March 31 Grain Stocks report.  With exports and crush unchanged, soybean ending stocks are projected at 445 million bushels, up 10 million from last month.

Projected prices for soybeans and products are reduced this month.  The season-average soybean price is lowered 5 cents at the midpoint to $9.55 per bushel based on marketings to date and lower expected prices for the second half of the marketing year.  Soybean oil prices are projected at 31 to 33 cents per pound, down 1.5 cents at the midpoint.  Soybean meal prices are projected at $310 to $330 per short ton, down $5.00 at the midpoint.

Sugar:  U.S. fiscal year 2016/17 beet sugar production is decreased 110,000 short tons, raw value (STRV) to 4.996 million.  Sugarcane production for 2016/17 is reduced by 24,871 STRV mainly on the basis of reduced sucrose recovery expected by processors in Florida and Texas.  Ending stocks for 2016/17 are projected at 1.642 million STRV, implying a stocks-to-use ratio of 13.3 percent.

Cotton:  The 2016/17 U.S. cotton supply and demand forecasts show higher exports and lower ending stocks relative to last month. The export forecast is raised 800,000 bales to 14.0 million, based on strong export sales during March.  This would be the fourth-largest volume ever for U.S. exports, accounting for nearly 40 percent of world trade.  The marketing year price received by producers is projected to average between 67 and 69 cents per pound, a reduction of 1 cent at the upper end of the range.

Livestock, Poultry, and Dairy: The 2017 forecast of total red meat and poultry production is raised from last month as higher beef and turkey production more than offset modest reductions in pork production.  Beef production is forecast higher on the current pace of slaughter and heavier-than-expected cattle weights in the first half of the year. The March Quarterly Hogs and Pigs report indicated that industry expansion is still underway although producers intend to slow farrowings this summer.

The milk production forecast for 2017 is lowered as reductions in milk per cow offset increases in milk cow numbers.  Dairy products price forecasts for cheese, butter, nonfat dry milk, and whey are lowered as both domestic and international supplies are large.  As a result, both Class III and Class IV price forecasts are reduced from last month.  The all milk price for 2017 is lowered to $17.40-$17.90 per cwt.

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