The U.S. Department of Agriculture released its monthly World Agricultural Supply and Demand Estimates on July 11.
Corn and soybeans
The supply and demand estimates for coarse grains and soybeans were based off the June 28 USDA acreage report. That report came under some scrutiny in farm country because it increased planted and predicted harvested corn acres, despite widespread weather preventing planting of corn and soybeans across much of the Midwest. In July, USDA’s National Agricultural Statistics Service is slated to collect updated information on the actual 2019 corn and soybean acres planted. If that new data merits it, the new updated acreage estimates will appear in the August Crop Production report.
As of the information available to USDA on July 11, the U.S. corn outlook was for larger production and beginning stocks, greater feed and residual use, lower food, seed and industrial use, and increased ending stocks, according to the report.
For 2019-20, corn production is projected to be 195 million bushels higher, based on those increased planted and harvested acres found in the June 28 Acreage report. Excessive rainfall and extended planting season also means silking is behind recent historical averages, and so much of the crop will be pollinated in late July, into early August.
That larger predicted crop is also raising projected feed and residual use by 25 million bushels. Food, seed and industrial use is down 20 million bushels, based on lower projections for non-ethanol industrial use. Supply will outpace use, so stocks will be raised 335 million bushels to 2 billion bushels. The report projected a 10-cent drop in price per bushel to $3.70 per bushel.
“Corn beginning stocks are raised 145 million bushels, reflecting lower use forecasts for 2018-19,” the report stated. “Exports are reduced based on current outstanding sales and shipments to date, with export inspection data for June the lowest for the month since 2013.”
The July WASDE report predicted 2019-20 soybean production at 3.845 billion bushels, down 305 million bushels based on lower planted and harvested area and lower projected yields. The report forecasted 4.5 million fewer acres harvested, to just 79.3 million acres of soybeans. That number may be adjusted in the August Crop Production report.
Delayed soybean planting progress means yields are forecast to be down to 48.5 bushels per acre.
On the export side, increased competition from South American exporters is predicted to reduce soybean exports to 1,875 billion bushels. Soybean ending stocks for 2019-20 are projected at 795 million bushels, compared to 1.045 billion bushels in June.
“The 2019-20 season-average price for soybeans is forecast at $8.40 per bushel, up 15 cents from last month,” the report stated.
“The outlook for 2019-20 U.S. wheat this month is for lower supplies, higher domestic use, larger exports, and reduced stocks,” according to the report summary. Forecasted 2019-20 U.S. wheat production is raised by 18 million bushels to 1.92 billion bushels, based off of higher forecast yields of about 50 bushels per acre.
Winter wheat harvest is in full swing and all classes of winter wheat are expected to increase in production numbers this month. The report said winter wheat production is expected to reach 1.29 billion bushels.
The key point is domestic wheat use was forecast higher in this report based on expected increased feed and residual use because of competitive pricing against feedgrains in the coming months.
On the export side, the report projects wheat exports of 950 million bushels, up 14 million from the revised 2018-19 export forecasts. With significantly lower production forecasts, exportable supplies are expected to be lowered as well, and that may improve the country’s export competitiveness at the end of the 2019-20 marketing year, according to the report.
“Ending stocks for 2019-20 are projected 72 million bushels lower than last month at 1 billion,” the report stated. “The projected season-average farm price is $5.20 per bushel, up 10 cents from last month on reduced stocks.”
On the world stage, Russia experienced extremely high temperatures and drier weather in June during its winter wheat grain fill, leading to an expected 3.8 million tons less production. The European Union and the Ukraine faced the same hot and dry conditions in June, reducing their yields as well. Still, all three should see productions above last year’s numbers, the report stated.
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“Global 2019-20 exports are lowered 2.3 million tons on decreased supplies,” the report stated. “World consumption is lowered 2.9 million tons, primarily on reduced feed and residual use.” That means world ending stocks are reduced to 286.5 million bushels but remain record large.
The U.S. 2019-20 cotton projections showed higher beginning and ending stocks compared to May.
“Beginning stocks are 350,000 bales higher due to decreases in 2018-19 domestic consumption and exports,” the report stated. Domestic spinning slowed down, to the tune of 100,000 bales less consumption. Meanwhile exports were down 250,000 bales based on the pace of recent shipments.
“Ending stocks in 2018-19 are raised 300,000 bales to 6.7 million, or 33% of use,” the report stated. The forecasted marketing year average price was down to 63 cents per pound, a four-year low.
The July 2019-20 world cotton supply and demand estimates saw higher beginning stocks at 1.7 million bales, lower consumption at 1 million bales, for higher ending stocks of 3.2 million more bales. Those higher beginning stocks were based on reduced consumption estimates from Bangladesh and China.
Livestock, poultry and dairy
Higher forecasted pork and broiler production is expected to offset lower beef and turkey production forecasts, according to the report.
Lighter beef carcass weights and slightly lower third quarter steer and heifer slaughter is expected to reduce the beef production forecast. More will be understood after USDA releases its cattle report July 19, which will have a mid-year estimate of the U.S. cattle inventory and beef cow replacement.
Forecasted pork production is raised from last month with higher than expected second-quarter commercial hog slaughter. Producers indicated intentions to farrow about the same number of sows in the second half of 2019, according to the report, but growth in pigs per litter will make up those higher numbers of pigs for slaughter in 2020.
Cattle price forecasts lowered from last month. Hog price forecasts lowered based on the increased pork production in late 2019. Broiler price forecasts were lower for 2019 based on continued slow demand. And turkey price forecasts were raised for 2019 and 2020, according to the report.
The report forecasted no change in 2019 milk production, but 2020 may see reduced production based on slower expected growth in milk per cow. The report forecasted higher than expected imports of butterfat products in 2019-20. Meanwhile fat basis exports this year and next will be reduced based on less global competition.
“The 2019 all milk price is forecast higher at $18.20 per per hundredweight, but the all milk price forecast for 2020 is slightly lower than the previous month at $18.85,” the report stated.
To read the full report, visit www.usda.gov.
Jennifer M. Latzke can be reached at 620-227-1807 or [email protected].