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USDA WASDE


13 July 2015

USDA WASDE - 13 July 2015USDA WASDE - 13 July 2015


USDA World Agricultural Supply & Demand Estimates

World Agricultural Supply and Demand Estimates

WHEAT: Projected U.S. wheat supplies for 2015/16 are raised 58 million bushels this month on larger beginning stocks and production. A 10-million-bushel decrease in imports is partially offsetting. Production is raised on increased spring wheat production that more than offsets decreases for Hard Red Winter, Soft Red Winter, and White Wheat. Overall yields for spring wheat are forecast above average. Feed and residual use for all wheat in 2015/16 is raised 5 million bushels to 200 million on the larger crop. All wheat exports for 2015/16 are raised 25 million bushels to 950 million on increased U.S. supplies and reduced wheat production in Canada. These exports would be up 11 percent from the low level of 2014/15, but still well below the 5-year average. Ending stocks are raised 28 million bushels to 842 million, the largest since the 2010/11. Despite higher stocks, the season-average price is raised 35 cents to $4.75 to $5.75 per bushel on recently higher cash and futures prices and the rising outlook for corn prices, particularly in the summer months when a majority of this year’s wheat crop will be marketed.

Global wheat supplies for 2015/16 are raised 12.1 million tons primarily on increased beginning stocks. China beginning stocks are raised 11.4 million tons on reductions to feed and residual use. China wheat feeding fell substantially starting with the 2013/14 market year as wheat prices became uncompetitive with corn. Partly offsetting is a 2.0-million-ton decrease for 2015/16 Australia beginning stocks mostly on a 1.6-million-ton revision to 2013/14 production as reported by the Australian Bureau of Statistics. Foreign 2015/16 production is lowered slightly as increased production in the Black Sea region is more than offset by reductions for EU and Canada. Total world production is raised to 722.0 million tons; down from last year’s record but still the second largest.

Global wheat consumption for 2015/16 is lowered 5.4 million tons primarily on the reduced feed and residual use for China. Canada and EU wheat feed and residual use are reduced 0.7 and 0.5 million tons, respectively. Partly offsetting is a 1.4-million-ton increase in India food use. Global wheat exports are lowered 0.3 million tons to 158.1 million, down nearly 4 percent from the previous year. The largest import reduction is for Iran, which is lowered 1.0 million tons on large supplies. EU imports are raised 1.0 million tons with the smaller crop and more expected imports of feed-quality wheat from Ukraine. China imports are raised 0.8 million tons on increased purchases. Exports are raised 1.0 million tons each for Russia and Ukraine on larger crops and less competition from EU. The largest exporter reductions are 1.5 million tons for EU and 1.0 million tons for Canada, both on smaller crops. Global ending stocks for 2015/16 are raised 17.4 million tons to a record 219.8 million tons, mostly reflecting the 17.2-million-ton increase in China.

COARSE GRAINS: Projected 2015/16 U.S. feed grain supplies are lowered this month with reductions in corn beginning stocks and production. Corn beginning stocks for 2015/16 are down 97 million bushels as increases in 2014/15 feed and residual use, use in ethanol production, and exports more than offset a small increase in imports. Corn production for 2015/16 is projected down 100 million bushels reflecting the lower planted and harvested areas from the June 30 Acreage. Sorghum, barley, and oats production are forecast higher based on the higher areas reported for all three crops and higher yields for barley and oats in today’s Crop Production.

Projected 2015/16 U.S. corn use is lowered with reductions for feed and residual use and exports more than offsetting higher expected corn use in ethanol production. Projected feed and residual use is reduced 25 million bushels with lower production, higher expected supplies of distillers’ grains, and the higher price outlook. Exports are lowered 25 million bushels with increased competition expected from larger supplies in Brazil. Use for ethanol is raised 25 million bushels with higher forecasts for 2015 and 2016 gasoline consumption in the latest outlook from the Energy Information Administration. The higher gasoline consumption outlook also boosts expected 2014/15 corn use for ethanol by 25 million bushels. This month’s higher projections for 2014/15 corn feed and residual use and exports reflect the latest indications of disappearance from the June 1 stocks estimate and reported export shipments and sales to date.

Other important 2015/16 feed grain changes include higher projected sorghum use, particularly for exports, and higher projected feed and residual use for sorghum and barley. Ending stocks for sorghum, barley, and oats are all projected higher reflecting larger crops and supplies this month. Corn ending stocks for 2015/16 are projected 172 million bushels lower.

Projected season-average prices received by producers for 2015/16 are higher for all the feed grains with corn up 25 cents to $3.45 to $4.05 per bushel. This is up 5 cents per bushel, at the midpoint, from this month’s higher forecast for 2014/15. At $3.60 to $3.80 per bushel, the 2014/15 corn price range is raised 5 cents on both ends.

Global coarse grain supplies for 2015/16 are projected down 4.3 million tons with much of the reduction from lower corn beginning stocks in the United States. Foreign coarse grain beginning stocks are also lower with Brazil corn stocks down 1.5 million tons. Brazil corn exports for 2014/15 are increased, outpacing this month’s increase in 2014/15 production.

Globally, corn production for 2015/16 is lowered 2.2 million tons with reductions in the United States and EU only partly offset by increases for Brazil and China. EU corn production is lowered 2.4 million tons as recent excessive heat and developing dryness across major growing areas reduces yield prospects. Corn production is lowered 0.3 million tons for neighboring Serbia where heat and dryness are also concerns. Brazil corn production is raised 2.0 million tons for 2015/16 with higher expected area for the crop that will be planted in the coming months. China corn production is raised 1.0 million tons also on higher area. Global barley and oats production for 2015/16 are lowered with reductions for EU and Canada.

Global 2015/16 coarse grain consumption is raised 0.9 million tons, partly reflecting higher expected sorghum feeding and imports for China with the larger U.S. crop. Corn feeding is raised for EU supported by larger imports as domestic grain supplies decline. World barley consumption is lowered with reductions for EU, Australia, and Canada on tighter global supplies. Brazil corn exports are raised for 2014/15 and 2015/16, up 2.5 million tons and 1.0 million tons, respectively. EU corn imports are raised in both years. Global 2015/16 corn ending stocks are projected 5.2 million tons lower mostly on the reduction expected for the United States. Corn ending stocks are also expected lower for EU and Brazil.

RICE: U.S. 2015/16 all rice supplies are lowered 11.0 million cwt to 278.4 million due to a production decrease. Supplies of long-grain rice are lowered 12.5 million, but medium- and short-grain rice supplies are raised 1.5 million. All rice production is lowered 12.0 million cwt to 207.0 million due mostly to a decrease in area with long-grain production reduced 9.5 million and medium- and shortgrain rice lowered 2.5 million. All rice planted area, as reported in Acreage is estimated at 2.77 million acres, with long-grain at 2.07 million, and medium- and short-grain area at 0.69 million. Beginning stocks for 2015/16 are raised 1.0 million cwt to 46.4 million due to revisions made to 2014/15 all rice and rice-by-class supply and use. All rice average yield is estimated at 7,544 pounds per acre. All rice total use is lowered 1.0 million cwt to 240.0 million cwt, with domestic and residual use lowered 1.0 million cwt to 130.0 million, and exports unchanged at 110.0 million cwt. Ending stocks are projected at 38.4 million cwt, down 10.0 million.

U.S. 2014/15 all rice exports are lowered 1.0 million cwt, raising ending stocks by the same amount. Long-grain domestic and residual use and exports are raised; ending stocks lowered; and the seasonaverage price increased. Medium-and short-grain domestic and residual use and exports lowered; ending stocks raised and the average price unchanged. June 1 Rice Stocks implied shifts in the riceby-class domestic and residual use estimates. Rice-by-class export estimates are based on U.S. Census Bureau trade data through May and the latest export sales data.

U.S. long-grain 2015/16 rice season-average price is projected at $10.90 to $11.90 per cwt, up 90 cents per cwt on each end of the range. Medium- and short-grain price is unchanged at $17.80 to $18.80 per cwt. All rice price is projected at $13.00 to $14.00 per cwt, up 70 cents on each end of the range. California medium- and short-grain price range is raised 50 cents. Other States medium-and short-grain price midpoint is lowered 20 cents per cwt. Reduced global 2015/16 rice production leads to lower ending stocks. World rice production is projected at 480.3 million tons, still a record, down 1.4 million from last month, but up 4.0 million from last year.

Rice crops are lowered for Australia, Madagascar, North Korea, Thailand, and the United States. Dry conditions in principal rice growing areas of Thailand led to a 4-percent cut in production to 19.0 million tons, still slightly above 2014/15. North Korea’s crop is lowered 6 percent to 1.6 million tons due to dry conditions in the main rice producing region. Australia’s rice crop is lowered due to falling reservoir levels and a drop in expected planted area. Global consumption and trade are lowered. Thailand’s export projection is reduced 0.8 million tons to 10.2 million because of tighter supplies. Conversely, export projections are raised for Burma, Pakistan, and Vietnam.

Global ending stocks are projected at 90.5 million tons, down 0.9 million, the lowest since 2007/08. The global stocks-to-use ratio at 18.5 percent is the lowest since 2006/07. Ending stocks are lowered for Pakistan, Philippines, Thailand, Vietnam, and the United States.

OILSEEDS: U.S. oilseed production for 2015/16 is projected at 115.1 million tons, up 1.0 million tons mainly on higher soybean production. Soybean production is projected at 3,885 million bushels, up 35 million due to increased harvested area. Harvested area, forecast at 84.4 million acres in the Acreage report, is 0.7 million above the June forecast. The soybean yield is projected at 46.0 bushels per acre, unchanged from last month. Despite increased production, soybean supplies are reduced 40 million bushels on account of lower beginning stocks. Soybean crush is projected at 1,840 million bushels, up 10 million reflecting increased domestic soybean meal disappearance in line with adjustments for 2014/15. Soybean ending stocks are projected at 425 million bushels, down 50 million.

U.S. soybean crush for 2014/15 is raised 15 million bushels to 1,830 million on increased domestic soybean meal use. Soybean exports are projected at 1,825 million bushels, up 15 million reflecting shipments and outstanding sales through early July. Seed and residual use are each raised based on indications from the Acreage and Grain Stocks reports, respectively. Soybean ending stocks for 2014/15 are projected at 255 million bushels, down 75 million from last month.

The U.S. season-average soybean price for 2015/16 is projected at $8.50 to $10.00 per bushel, up 25 cents on both ends of the range. Soybean meal prices are projected at $315 to $355 per short ton, up 10 dollars on both ends. The soybean oil price projection is unchanged at 30.5 to 33.5 cents per pound. Global oilseed production for 2015/16 is projected at 531.8 million tons, down fractionally from last month. Global soybean production is projected at 318.9 million tons, up 1.3 million mostly due to higher production in the United States and Bolivia.

U.S. peanut production is raised 0.2 million tons on higher harvested area as reported in the Acreage report. Rapeseed production is reduced for Canada with lower yields more than offsetting increased planted area reported by Statistics Canada. Rapeseed and sunflowerseed production are also reduced for EU on lower yields resulting from dry weather and above average temperatures that persisted through early July. Other changes include reduced rapeseed production for China and Russia, and reduced soybean production for Turkey. Global oilseed ending stocks for 2015/16 are projected at 102.2 million tons, down 2.4 million mostly reflecting lower soybean stocks in the United States and reduced rapeseed stocks in Australia, Canada, and EU. South America soybean stock changes are mostly offsetting.

SUGAR: U.S. sugar beginning stocks for 2015/16 are decreased by 77,955 short tons, raw value (STRV) due to changes made in the 2014/15 supply and use balances of less sugar imported from Mexico (100,000) but more specialty sugar imported (22,046) due to an increase in the refined sugar tariff rate quota (TRQ) on June 15. Changes made to 2014/15 beet sugar production and cane sugar production offset each other.

Total 2015/16 sugar production is projected at 8.765 million STRV, an increase of 45,000 over last month. Cane sugar production is increased by 105,000 STRV to 3.785 million and beet sugar production is decreased by 60,000 to 4.980 million. Both changes stem from changes in area harvested based on forecasts published in NASS’s Acreage report of June 30. Imports are forecast at 3.364 million STRV, an increase of 148,698.

The Secretary of Agriculture established the raw and refined sugar TRQs last month on June 15. As expected, the raw sugar TRQ was established at the World Trade Organization (WTO) minimum access level and there was no change from last month in the forecast shortfall of 99,208 STRV. In addition to the refined sugar TRQ minimum access of 24,251, the Secretary announced additional refined sugar access of 121,254 STRV for specialty sugar. Imports from Mexico are forecast at 1.549 million STRV, 27,444 STRV higher than last month. Ending stocks are forecast at 1.648 million STRV, implying an ending stocks-to-use ratio of 13.5 percent.

Mexico 2014/15 production is estimated 45,000 metric tons (MT) higher than last month at 5.985 million as the sugarcane harvest is nearly complete. Total exports for 2014/15 are reduced by 135,583 MT based on pace-to-date. Exports to the United States are estimated at 1.220 million MT (85,583 less) and exports to other countries are estimated at 150,000 MT (50,000 less). For 2015/16, exports to the United States are forecast at 1.325 million MT, an increase based on the changes made in the July sugar WASDE for the United States as per the CVD Suspension Agreement.

LIVESTOCK, POULTRY, AND DAIRY: The forecasts for total meat production for 2015 and 2016 are raised from last month. Beef production for 2015 is lowered as fed cattle slaughter in the second quarter is reduced. In addition, relatively good forage conditions and higher feed prices are expected to slow the pace of placements until later in 2015, reducing available supplies of fed cattle for slaughter in late 2015. However, these large placements will lead to higher marketings and slaughter in 2016 and the beef production forecast is raised.

The pork production forecast for 2015 is raised. Pig crop data in the Quarterly Hogs and Pigs report supported a higher third-quarter 2015 slaughter forecast. The 2016 forecast is raised slightly.

Broiler production for 2015 and 2016 is raised based on hatchery data and continued increases in bird weights. Turkey production is reduced for 2015 based on hatchery data. Egg production for 2015 is reduced slightly as lower table egg production more than offsets an expected increase in hatching egg production.

Forecasts for beef imports for 2015 and 2016 are raised as demand for processing grade beef remains strong; the export forecast is reduced slightly on trade data to date. Pork imports for 2015 and 2016 are reduced and the export forecasts are raised. Broiler exports for 2015 are raised on improved demand and large supplies; no change is made to 2016. Turkey exports are reduced for 2015 as supplies are tight; no change is made to 2016.

Cattle prices for 2015 and 2016 are reduced from last month on weaker demand and larger supplies of competing meats. Hog prices are higher for 2015 and 2016 as both export and domestic demand has improved. Broiler prices are slightly lower for 2015 on weaker June prices but the forecast for 2016 is unchanged. Turkey prices for 2015 and 2016 are raised on tighter supplies. Egg prices for 2015 are raised on tight supplies and prices to date but the forecast for 2016 is unchanged.

The milk production forecast for 2015 is raised on a slightly more rapid increase in cow numbers and milk per cow. However, higher expected feed prices and weaker milk prices during late 2015 and 2016 are expected to temper the rate of growth in production and the 2016 production forecast is lowered. Fat basis exports are reduced as competition in world markets is expected to be strong in both 2015 and 2016 and domestic butter demand is expected to absorb much of the available supply. Skim-solids exports are raised from last month as weaker nonfat dry milk (NDM) prices allow the United States to remain competitive in export markets. Fat basis and skim-solids imports are raised for both 2015 and 2016 on expectations of abundant global supplies of dairy products and continued strength in U.S. domestic demand for butter and cheese. Cheese and butter prices for 2015 are raised from last month on continued domestic demand strength, but NDM and whey prices are forecast lower as the supplies of those products are abundant and prices decline to maintain competitiveness in export markets. For 2016, the cheese price is unchanged, but the butter price is raised on expectations of robust domestic demand. NDM and whey prices are reduced as lower prices are expected to maintain export competitiveness. For 2015 and 2016 Class III prices are reduced on lower whey prices. Class IV prices for both years are reduced on lower NDM prices. The all milk price is forecast at $17.05 to $17.35 per cwt for 2015 and $17.00 to $18.00 per cwt for 2016.

COTTON: The U.S. cotton projections for 2015/16 show marginally lower beginning and ending stocks. The production forecast of 14.5 million bales is unchanged from last month, as lower expected abandonment and slightly higher yields offset the reduced planted area indicated in the Acreage report. Domestic mill use and exports are both revised slightly, based on changes made in the 2014/15 balance sheet, which reflect recent activity.

The 2015/16 projected ending stocks are 4.2 million bales, down 200,000 from last month and unchanged from the beginning level. The projected range for the marketing year average price received by producers of 54 to 70 cents per pound is raised 4 cents on the lower end, with a midpoint of 62 cents. This month’s world cotton supply and demand estimates indicate lower consumption and higher ending stocks for both 2014/15 and 2015/16 relative to last month.

China’s consumption is reduced sharply in both years due to continued strong competition from both polyester and imported cotton products. At the same time, 2015/16’s projected growth in world cotton consumption remains above 3 percent, as this month’s reductions in consumption by China, Brazil, Bangladesh, and Pakistan are partially offset by increases for India and Vietnam. World production is about unchanged, but world trade is raised, as lower imports by China, Pakistan, and Bangladesh are more than offset by an increase for Vietnam. Projected 2015/16 world ending stocks are raised by more than 2.0 million bales; however, with the expected China carryover 2.5 million bales above last month, stocks outside of China are projected lower.

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