The USDA released their February World Agricultural Supply and Demand Estimate Forecast (WASDE) today. Here’s what you need to know:
Wheat: U.S. 2016/17 wheat exports are raised 50 million bushels to 1,025 million reflecting a strong pace to date. Food use is lowered 3 million bushels to 960 million following the February 1 release of NASS’ Flour Milling Products report. These changes resulted in a net 47-million-bushel reduction in ending stocks, now projected at 1,139 million bushels, which would still be the largest since the late 1980s. The season-average farm price is raised $0.05 at the midpoint of the range to $3.85 per bushel on strengthening cash prices.
Corn: This month’s 2016/17 U.S. corn outlook is for increased food, seed, and industrial use and reduced stocks. Corn used to produce ethanol is raised 25 million bushels to 5,350 million based on the most recent data from the Grain Crushings and Co-Products Production report. The projected range for the season-average corn price received by producers is narrowed 10 cents on each end to $3.20 to $3.60 per bushel, with the midpoint unchanged at $3.40.
Sorghum: Forecast U.S. sorghum exports are lowered 25 million bushels from last month, reflecting the slow pace of export commitments through January, particularly to China. Grain sorghum prices are projected to average $2.50 to $2.90 per bushel, down 20 cents at the midpoint to $2.70 reflecting the current weak relationship to corn prices in interior markets.
Rice: U.S. 2016/17 rice exports are lowered 2.0 million cwt to 110.0 million. U.S. ending stocks are raised by an equal amount and are the highest since 1985/86. The 2016/17 all rice season-average farm price range is raised $0.10 per cwt at the midpoint to $10.50.
Soybeans: U.S. soybean supply and use projections for 2016/17 are unchanged this month, leaving ending stocks at 420 million bushels. Soybean exports are projected at 2,050 million bushels, up 114 million from last year. Although soybean export commitments through January are significantly higher than a year ago, competition from expected record South American exports will limit U.S. shipments to well below last year’s record levels this summer. The U.S. season-average soybean price range for 2016/17 is projected at $9.10 to $9.90 per bushel, unchanged at the midpoint from last month. Soybean oil prices are forecast at 34 to 37 cents per pound, and soybean meal prices are projected at $310 to $340 per short ton, both unchanged at the midpoint from last month.
Sugar: U.S. cane sugar production for 2016/17 is reduced by 72,803 short tons, raw value. Almost all the reduction is based on industry reporting in Florida indicating less sugarcane acreage and slightly lower yields than previously forecast. U.S. exports for 2016/17 are now projected at 75,000 STRV on indications of planned beet sugar exports of 50,000 this fiscal year. Although, beet sugar deliveries have been strong through the fiscal year’s first quarter, bulk cane sugar deliveries are far below trend with significant year-over-year declines in deliveries to bakery/cereal, confectionery, and multiple and other food use manufacturers.
Cotton: The 2016/17 U.S. cotton supply and demand forecasts show slightly 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 12.7 million based on strong export sales during January. Ending stocks are now estimated at 4.8 million bales, equivalent to 30 percent of total disappearance. The marketing year average price received by producers is projected to average between 67 and 71 cents per pound, an increase of 2 cents on both ends of the range, as recent market prices have exceeded previous expectations.
Livestock, poultry, and dairy: Total red meat and poultry production for 2017 is lowered, largely reflecting decreased pork and poultry forecasts. Beef production is raised. Cattle, hog, and broiler price forecasts are raised to reflect demand strength. Turkey prices are forecast lower on current prices. Egg prices are increased on current price strength. The milk production forecast for 2017 is raised from last month. Improved returns in 2017 are expected to result in a slightly higher forecast cow inventory during the late part of 2017. Milk output per cow is also raised as improved returns are expected to support continued improvements in the quality of dairy rations. The all milk price is forecast higher at $17.70 to $18.40 per cwt.