Shocking numbers. USDA coming up with an increase in the overall corn and soybean yield, listen to the analysis live on the Big Show:
WHEAT: The U.S. 2017/18 wheat supply and demand estimates are unchanged from last month. The season-average farm price is lowered $0.20 per bushel at the midpoint to a range of $4.30 to $4.90. The reduction is due to NASS prices to date and expectations of future cash prices.
Global wheat supplies for 2017/18 are lowered as a 1.7-million-ton production increase is offset by a 2.7-million-ton decrease in beginning stocks. The primary production increase is for Russia, which is raised 3.5 million tons to a record 81.0 million tons; this change is based on excellent growing conditions and updated harvest results. Australia production for 2017/18 is lowered 1.0 million tons on dry conditions, and the EU is lowered 0.7 million tons. In addition, historical production changes for Australia led to lower global ending stocks. The 2015/16 Australia production change is on updated Australia Bureau of Statistics data which lowered harvested area 1.5 million hectares. Australia's 2016/17 harvested area is lowered 0.5 million hectares. Global trade for 2017/18 is essentially unchanged. However, exports are increased 1.0 million tons for Russia on the larger crop, 0.5 million tons for Ukraine, and 0.3 million tons for Turkey. These are partially offset by a 1.0- million-ton reduction for EU exports and a 0.5-million-ton reduction for Australia. Total global use is up 0.5 million tons. With total supplies declining and use increasing, global ending stocks are lowered 1.6 million tons.
COARSE GRAINS: This month's 2017/18 U.S. corn outlook is for increased production, greater feed and residual use, higher ending stocks, and lower prices. Corn production is forecast at 14.184 billion bushels, up 32 million from last month. Corn supplies are up from last month, as a larger crop more than offsets a small decline in beginning stocks due to updated use estimates for 2016/17. Feed and residual use for 2017/18 is raised 25 million bushels with a larger crop and lower expected prices. Corn used for ethanol for 2017/18 is projected down 25 million bushels at 5.475 billion, based on observed usage during 2016/17 and expectations of lower exports. Other industrial use is lowered 50 million bushels. With supply increasing and use falling, corn ending stocks are up 62 million bushels from last month. The projected range for the season-average corn price received by producers is lowered 10 cents on both ends to a range of $2.80 to $3.60 per bushel.
Global coarse grain production for 2017/18 is forecast up 2.4 million tons to 1,316.5 million. The 2017/18 foreign coarse grain outlook is for greater production, slightly lower consumption, reduced trade, and larger stocks relative to last month. Foreign corn production is forecast to decline relative to last month with reductions for Serbia, Ukraine, the EU, and Russia more than offsetting increases for Argentina and Mexico. The projected corn yield for Ukraine is reduced based on heat and dryness during the month of August. In Argentina, corn area is raised from last month and is now forecast to be record high. Barley production is raised for Russia and Canada, but lowered for Argentina and the EU.
Corn exports are lowered for Serbia and Russia, but increased for Ukraine. Despite a smaller crop, Ukraine's relatively large exportable supplies and logistical advantages are expected to fill demand for imported corn in the EU. Brazil's 2016/17 exports are raised for the local marketing year beginning March 2017. Foreign corn ending stocks for 2017/18 are virtually unchanged from last month, with declines for Brazil, Serbia, Ukraine, and Russia offset by increases for Argentina and Mexico. Global corn stocks, at 202.5 million tons, are up 1.6 million from last month.
RICE: Total U.S. rice supplies are reduced 6.6 million cwt from last month due to a lower production forecast. In the September Crop Production report, NASS reduced the 2017/18 U.S. crop size by 6.7 million cwt to 179.7 million, primarily on lower area. NASS incorporated FSA certified acreage data this month in adjusting forecast acreage lower. The average all rice yield also declined by 9 pounds to 7,504 pounds per acre. Long- grain production is reduced by 5.3 million cwt and combined medium-short is decreased by 1.4 million. The reduction in 2017/18 supplies results in both lower projected domestic use and residual and exports. All rice ending stocks are reduced 1.1 million cwt to 29.0 million, the lowest level since 2007/08. The 2017/18 all rice season-average farm price is raised $0.50 per cwt at the midpoint to a range of $12.70 to $13.70. Prices for all rice classes are increased this month.
Global 2017/18 rice supplies are increased to 603.7 million tons, primarily on higher production and beginning stocks for India. Production increases are partly offset by reductions in China and Bangladesh. World 2017/18 consumption is increased by 1.1 million tons to 480.2 million. Global 2017/18 trade is raised to a record 44.2 million tons on higher exports from Burma and India.
OILSEEDS: U.S. oilseed production for 2017/18 is projected at 132.8 million tons, up 1.9 million from last month with higher soybean, peanut, and cottonseed production forecasts. Soybean production is projected at a record 4,431 million bushels, up 50 million on a higher yield forecast. Soybean supplies are raised with higher production only partly offset by lower beginning stocks. With increased supplies and lower prices, soybean exports are raised to 2,250 million bushels leaving ending stocks unchanged.
Soybean oil balance sheet changes for 2017/18 include reduced beginning stocks and supplies and higher use for biodiesel production reflecting recently imposed duties for imported biodiesel from Argentina and Indonesia. Despite reduced forecasts for other domestic use and exports, ending stocks are projected lower.
The 2017/18 U.S. season-average soybean price is forecast at $8.35 to $10.05 per bushel, down $0.10 at the midpoint. Soybean meal prices are also lower at $290 to $330 per short ton while soybean oil prices are projected higher at 32.5 to 36.5 cents per pound. Rising soybean oil prices relative to soybean meal reflects additional demand as increased use of domestic biodiesel feedstock partly offsets reduced biodiesel imports in 2018.
Changes for 2016/17 include higher exports, higher crush, and lower ending stocks. Exports are increased 20 million to 2,170 million bushels based on official trade data through July and indications from August export inspections. With crush raised 5 million bushels, ending stocks are projected at 345 million bushels, down 25 million from last month.
The 2017/18 foreign oilseed production is projected at 445.8 million tons, nearly unchanged from last month. Reductions for soybeans and rapeseed are offset with gains for cottonseed and sunflowerseed. Lower soybean production for Uruguay and Serbia is partly offset by higher production for Bolivia. Canola production is reduced for Canada on lower reported area and cottonseed is raised for India based on the latest government planting data. Foreign sunflowerseed production is slightly higher as larger projected crops for Argentina, Turkey, and the EU more than offset lower projections for Ukraine and Bolivia.
Foreign oilseed exports for 2017/18 are reduced this month mainly on lower soybean shipments for Uruguay. Soybean imports are raised for China and Thailand reflecting higher U.S. exports. Foreign oilseed stocks for 2017/18 are projected higher as a 1.5-million-ton reduction for Brazilian soybean stocks due to a lower carryin is offset by increased soybean stocks for China, Bolivia, and Argentina, and larger canola stocks in Canada. Canola stocks in Canada are adjusted with the final 2016/17 crop and stocks estimates recently issued by Statistics Canada.
SUGAR: U.S. beet sugar production for the 2017/18 August-July crop year is unchanged from last month at 5.131 short tons, raw value (STRV). Fiscal year 2017/18 beet sugar is decreased by 51,057 to 5.017 million STRV based on an increase in the proportion of beet sugar expected to be produced in August and September resulting from early harvest activity in the Red River Valley and Michigan. Beet sugar production for 2016/17 is unchanged at 4.998 million STRV as the increase in expected production for August and September is offset by lower than expected production in July. Cane sugar production in Texas for 2017/18 is increased 10,000 STRV from last month to 160,000 on the basis of increased sugarcane yield.
Sugar imported from Mexico for 2016/17 is projected to be 50,000 STRV lower than last month's forecast. Mexico is not expected to ship all of the Commerce Department's increase in the 2016/17 Export Limit. Re-export imports for 2016/17 are increased by 35,000 STRV based on the pace to date. Deliveries for human consumption for 2016/17 are reduced by 100,000 STRV based on an expected reduction in cane sugar deliveries from refineries affected by hurricanes through shutdowns and resulting logistical complications. Because these difficulties are temporary in nature, corresponding deliveries for 2017/18 are increased by 100,000 STRV.
Mexico 2016/17 sugar exports are decreased by 42,792 metric tons (MT) based on fewer shipments to the United States and imports for consumption are increased by 6,500 MT based on the pace to date. These changes combine to increase ending year stocks by 49,292 MT. Production, imports, and deliveries for 2017/18 are unchanged from last month. For 2017/18, exports to the United States are projected at 1.516 million MT, an increase corresponding to increased beginning stocks but still constrained by available domestic supplies. Exports to the United States are calculated as the lower of the following: (1) anticipated U.S. Needs of 1.551 million MT as defined in the Suspension Agreements; or (2) the export level that yields an ending stocks-to-consumption ratio of 18.0 percent. The 18- percent stocks-to-consumption ratio is an assumed lower bound necessary for use until the new Mexico sugarcane harvest is well underway.
LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2017 is reduced from last month as decreases in commercial beef and broiler production more than
offset increases in pork and turkey production. Second-half beef production forecasts are reduced, reflecting a slower expected marketing pace for fed cattle although cow slaughter is higher. The third and fourth quarter broiler production forecasts are reduced on hatchery data and the current pace of slaughter. The 2017 pork production forecast is raised on higher expected carcass weights. USDA will release the Quarterly Hogs and Pigs report on September 28, providing an indication of producer farrowing intentions into early 2018. Third-quarter turkey production forecast is raised slightly, but no changes are made to the outlying quarter. The annual egg production forecast is increased, reflecting second-quarter production data. For 2018, the beef production forecast is lowered from the previous month as a slower rate of placements during the second-half of 2017 is expected to result in reduced steer and heifer slaughter in the first half of 2018. Annual pork production is reduced slightly from the previous month while poultry and egg production forecasts for 2018 are unchanged.
No changes are made to 2017 and 2018 red meat, poultry, or egg trade forecasts.
Cattle prices are reduced from last month for the remainder of 2017 and into early 2018 on current price weakness. The hog price forecast for 2017 is lowered, but the 2018 price forecast remains unchanged. The annual broiler price forecasts for 2017 and 2018 are unchanged. The turkey price forecast is reduced for 2017 as slightly higher third-quarter turkey prices are more than offset by expected declines in the fourth quarter; the 2018 forecast is unchanged. The egg price forecast for 2017 is raised on recent price strength, but no change is made to the 2018 price forecast.
The milk production forecast for 2017 is raised as increases in milk per cow more than offset a slower rate of milk cow expansion. For 2017, fat basis exports are reduced from the previous month on slowing cheese shipments, while fat basis imports are raised on increased purchases of butterfat. On a skim-solids basis, the export forecast for 2017 is lowered on weaker than expected skim milk powder sales, while the import forecast is raised due to stronger demand for a number of dairy products. For 2018, the milk production forecast is reduced from the previous month on slower growth in cow inventories. The annual fat basis export forecast is unchanged from the previous month, but the import forecast is reduced on expected declining cheese imports. The skim-solids basis export forecast is reduced from the previous month as competition in international powder markets is expected to remain strong; imports are reduced on lower milk protein and cheese shipments.
Butter, NDM, and whey prices are forecast lower for 2017 while cheese prices are forecast higher from the previous month. The 2017 Class III price is raised as higher forecast cheese prices offset lower whey prices. The Class IV price is reduced on lower butter and NDM. For 2018, all dairy product prices are reduced, resulting in lower Class III and Class IV product prices. The all milk price is reduced to $17.70 to $17.90 per cwt for 2017 and $17.75 to $18.55 per cwt for 2018.
COTTON: The 2017/18 U.S. cotton estimates include larger production, exports, and ending stocks relative to last month. Production is raised 1.2 million bales, with notable increases in the Southwest and Delta. Both harvested and planted area are raised, with abandonment slightly higher this month. Beginning stocks are revised 50,000 bales lower based on indicated stocks as of July 31, 2017, exports are raised 700,000 bales, while domestic use is unchanged. Ending stocks are forecast 200,000 bales higher than the month before, at 6.0 million, or 33 percent of total use. The forecast range for the marketing year average farm price is reduced 1 cent on each end, giving a range of 54 to 66 cents per pound. With slightly lower 2017/18 world beginning stocks and slightly higher consumption only partially offsetting a 3.4-million-bale increase in production, world ending stocks are raised 2.4 million bales this month. Beginning stocks are reduced for India and Australia, offsetting an increase for Brazil. Production is raised for several countries, led by the United States and India. Larger production is also forecast this month for Brazil, Australia, Mexico, and Turkey. World trade is revised upwards by 600,000 bales. World ending stocks are projected at 92.5 million bales, 3.0 million above their 2016/17 level, but unchanged from a year earlier as a share of consumption.