It's a bullish WASDE from USDA!


The outlook for 2020/21 U.S. wheat this month is for stable supplies, higher domestic use, unchanged exports, and lower ending stocks. Feed and residual use is raised 25 million bushels to 125 million on lower-than-expected second-quarter stocks reported in today’s NASS Grain Stocks report. Seed use is up 1 million bushels to 63 million, reflecting 2020/21 wheat planted area released today in the NASS Winter Wheat and Canola Seedings report. Projected 2020/21 ending stocks are reduced 26 million bushels to 836 million, down 19 percent from last year. The season-average farm price is raised $0.15 per bushel to $4.85 based on NASS prices reported to date and expectations for futures and cash prices for the remainder of the marketing year. The 2020/21 global wheat outlook is for smaller supplies, increased consumption, higher exports, and reduced stocks. Supplies are lowered 1.6 million tons to 1,072.7 million on reduced production in China and Argentina more than offsetting an increase for Russia. China’s production is reduced 1.8 million tons to 134.3 million on the National Bureau of Statistics estimate. Russia’s production is raised 1.3 million tons to a new record of 85.3 million, based on estimates from Russia’s statistical agency Rosstat, surpassing the 2017/18 crop. Argentina’s production is reduced 0.5 million tons to 17.5 million on updated harvest results to date and this would be Argentina’s smallest crop in five years. World 2020/21 consumption is increased 1.8 million tons to 759.5 million, mostly on higher feed and residual use for China and the United States and greater food, seed, and industrial (FSI) use for Russia. Continued high domestic corn prices in China are expected to result in further wheat feed use as projected 2020/21 wheat feed consumption is raised 1.0 million tons to 25.0 million, up 32 percent from last year. Russia’s FSI consumption is raised 500,000 tons to 23.5 million with greater supplies. Projected 2020/21 global trade is raised fractionally to 193.8 million tons on higher exports for Canada, the EU-27+UK, and India more than offsetting reductions for Russia and Argentina. Russia’s recently announced wheat export tax and grain export quota is expected to temper Russia’s exports in the latter stages of the marketing year when it is imposed in mid-February. Russia’s exports are reduced 1.0 million tons to 39.0 million while EU-27+UK exports are raised 500,000 tons to 26.5 million as the EU-27+UK is expected to gain from Russia’s export restraints. Canada’s exports are raised 500,000 tons to 26.5 million on a strong early export pace and the expectation of continued large shipments to China as its imports are also raised this month to 9.0 million. Projected 2020/21 world ending stocks are lowered 3.3 million tons to 313.2 million but remain record high with China and India holding 51 and 10 percent of the total, respectively.

COARSE GRAINS: This month’s 2020/21 U.S. corn outlook is for lower production, reduced corn used for ethanol, smaller feed and residual use and exports, and decreased ending stocks. Corn production is estimated at 14.182 billion bushels, down 324 million on a lower yield and slight reduction in harvested area. Total corn use is down 250 million bushels to 14.575 billion. Exports are down 100 million bushels, reflecting sharply lower supplies and higher expected prices. Corn used for ethanol is lowered, based on data through November from the Grain Crushings and Co-Products Production report and weekly ethanol production during December as indicated by the Energy Information Administration. Feed and residual use is reduced 50 million bushels to 5.650 billion, based on indicated disappearance during the September-November quarter. With supply falling more than use, corn stocks are lowered 150 million bushels to 1.552 billion. The season-average corn price received by producers is raised to $4.20 per bushel. Sorghum production is estimated 2 million bushels higher as increased harvested area more than offsets a reduction in yield. Food, seed, and industrial use is lowered 10 million bushels on lower sorghum used for ethanol. Exports are raised 15 million bushels reflecting larger exports to China. Global coarse grain production for 2020/21 is forecast down 9.3 million tons to 1,438.5 million. This month’s foreign coarse grain outlook is for lower production and consumption, and smaller ending stocks. Foreign corn production is reduced with declines for Argentina and Brazil more than offsetting increases for China and India. For Argentina, dryness during December reduces yield prospects for early-planted corn in key central growing areas. Brazil is lowered reflecting reduced yield expectations for first-crop corn in southern Brazil. Major global coarse grain trade changes for 2020/21 include reduced corn imports for the EU-27+UK, Mexico, Iran, Vietnam, Colombia, Chile, Egypt, Malaysia, Peru, and Saudi Arabia, with a partly offsetting increase for China. For 2019/20, Argentina’s exports for the marketing year beginning in March 2020 are lowered based on the shipment pace to date. Foreign corn ending stocks are lower, mostly reflecting reductions for Brazil and the EU27+UK. Global corn stocks, at 283.8 million tons, are down 5.1 million.

RICE: The outlook for 2020/21 U.S. rice this month is for larger supplies, higher domestic use, decreased exports, and lower ending stocks. Supplies are raised as increased production more than offsets decreased imports. All rice 2020/21 production is 227.6 cwt, up 1.5 million from the previous estimate. The all rice average yield is estimated at 7,619 pounds per acre, up 59 pounds from the prior estimate. Imports are lowered 0.3 million cwt to 36.2 million with all the reduction in medium- and short-grain. All rice domestic and residual use is raised 14.5 million cwt to 160.0 million on higher-than-expected usage for August-November as implied by the NASS Rice Stocks report. Exports are lowered by 1.0 million cwt to 94.0 million, all for long-grain on the continued weak pace of sales and shipments for long-grain milled rice. Projected 2020/21 all rice ending stocks are lowered 12.4 million cwt to 38.4 million, primarily on higher projected domestic use. The projected 2020/21 all rice season-average farm price is raised $0.10 per cwt to $13.20 with increases in both the long-grain and medium-and short grain prices. The 2020/21 global outlook is for larger supplies, higher consumption, increased trade, and reduced stocks. Rice supplies are raised 2.1 million tons to 681.5 million, primarily on higher rice production for China and the Philippines. China’s 2020/21 production is increased 1.3 million tons to 148.3 million on the National Bureau of Statistics estimate released in December 2020. The Philippines is raised 300,000 tons to 12.0 million on record July/December 2020 production as indicated by the Philippines Statistical Authority. Global 2020/21 consumption is increased 1.5 million tons to a record 502.0 million, led by higher consumption by China and the United States. World trade is raised fractionally to 45.4 million tons as higher exports by India more than offset reductions for China, Peru, and the United States. Most of the increase in India’s exports this month are expected to be destined for Bangladesh, whose imports are raised further because of its flood-reduced output. Projected 2020/21 world ending stocks are raised 0.5 million tons to a record 179.5 million, primarily on the China production increase with China accounting for 65 percent of total stocks.

OILSEEDS: U.S. oilseed production for 2020/21 is estimated at 122.4 million tons, down 1.25 million from the previous report. Smaller soybean, peanut, and cottonseed crops are partly offset by an increase for canola and sunflowerseed. Soybean production is estimated at 4.135 billion bushels, down 35 million led by reductions for Minnesota, Iowa, and Kansas. Harvested area is estimated at 82.3 million acres, up slightly from the previous report. Yield is estimated at 50.2 bushels per acre, down 0.5 bushels. With higher imports and slightly higher beginning stocks, soybean supplies are down 14 million bushels from last month. The soybean crush forecast is raised 5 million bushels to 2.2 billion, reflecting improved prospects for soybean meal exports with a lower export forecast for Argentina. The soybean export forecast is raised 30 million to a record 2.23 billion bushels. With lower supplies and increased use, ending stocks are projected at 140 million bushels, down 35 million from the previous forecast. Soybean and soybean product prices are forecast higher this month. The U.S. season average soybean price for 2020/21 is projected at $11.15 per bushel, up 60 cents as cash prices in Central Illinois reach 6-year highs. The soybean meal price is projected at $390 per short ton, up 20 dollars. The soybean oil price is forecast at 38.5 cents per pound, up 2.5 cents. Foreign 2020/21 oilseed production is relatively unchanged, with higher sunflower seed mostly offset by lower soybean, cottonseed, peanut, rapeseed, and palm kernel output. Sunflower seed production is increased 0.5 million tons to 13.5 million for Russia based on recent government estimates. Soybean production is lowered 2 million tons to 48 million for Argentina and 0.2 million to 2.2 million for Uruguay, reflecting dry weather conditions in December and early January. Mostly offsetting lower South American soybean production is a 2.1-million-ton increase to 19.6 million for China on recent government data. Global soybean stocks are lowered 1.3 million tons to 84.3 million, with lower stocks for Argentina and the United States that are partly offset by higher stocks for China.

SUGAR: U.S. sugar supply for 2020/21 is increased 111,093 short tons, raw value (STRV) to 14.117 million on projected increases in production more than compensating for decreases in imports. Beet sugar production is increased 133,632 STRV on an increase in projected national sucrose recovery to 14.955 percent. The increase is based on increases in sucrose recoveries in all major producing regions over last month with data now available for August through November. Cane sugar production in Louisiana is increased 62,000 STRV to 1.886 million on reporting made close to the end of the production campaign. Imports for 2020/21 are reduced by 84,539 STRV. Most of the decrease is due to corrections in Customs 2019/20 TRQ reporting for the 13-month quota year that lowered entries in October by 77,869 STRV but increased entries in September 2019/20 by 81,631. FTA TRQ entries for 2020/21 are decreased by 9,453 STRV and by 626 STRV for 2019/20. Imports from Mexico for 2020/21 are increased by 2,783 STRV on sugar allocated for 2019/20 entering in October according to a CONADESUCA report. There are no changes in use for 2020/21. The increase in imports for 2019/20 that arrived late in the fiscal year had the effect of increasing measured deliveries for human consumption for 2019/20 by 81,005 STRV to 12.316 million. There are no changes made for corresponding deliveries in 2020/21 due to overall uncertainties in underlying demand by end users. Ending stocks for 2020/21 increase to 1.777 million STRV, implying an ending stocks-to-use ratio of 14.40 percent. There are no changes in Mexico sugar supply and use balances for 2019/20 or for 2020/21.

LIVESTOCK, POULTRY, AND DAIRY: The 2020 total red meat and poultry production estimate is reduced from last month. The beef production estimate is reduced on lower cattle slaughter. The pork production estimate is reduced as the slower pace of slaughter in late 2020 more than offset heavier carcass weights. The broiler production estimate is reduced on recent hatchery and slaughter data, while the turkey production estimate is lowered or recent production data. The egg production estimate is unchanged. For 2021, the total red meat and poultry production forecast is lowered from the previous month as lower expected beef, broiler, and turkey production more than offsets higher pork production. Lower expected placements in late 2020 will impact fed cattle supplies in mid2021. Cattle carcass weights are forecast lighter for 2021. USDA will release its semiannual Cattle report on January 29, providing estimates of heifers held for breeding and an insight into the number of feeder cattle available for placement during 2021. The pork production forecast for 2021 is raised from the previous month as higher expected hog slaughter more than offsets lighter expected carcass weights. Broiler, turkey, and egg production forecasts are lowered for 2021 as higher feed costs are expected to slow production growth. The beef import estimate for 2020 is reduced on recent trade data while the 2021 import forecast is reduced primarily due to lower expected imports from Australia. Beef exports for 2020 and 2021 are raised from last month. Pork exports for 2020 and 2021 are lowered from last month on weaker import demand from key trading partners. The 2020 broiler export estimate is raised on recent trade data, but no change is made to the 2021 export forecast. Livestock and poultry price estimates for 2020 are adjusted to reflect December price data. For 2021, cattle prices are raised on a lower production forecast. The 2021 hog price forecast is raised, reflecting strong domestic demand. Broiler prices are raised as lower forecast production in the second half of the year is expected to support firmer prices. Turkey and egg price forecasts for 2021 are raised on lower expected production. The milk production estimate for 2020 and forecast for 2021 are raised from December on growth in milk per cow and higher dairy cow numbers. Fat basis imports for 2020 and 2021 are reduced from last month on lower expected imports of butterfat products. The fat basis export estimate for 2020 is unchanged, but the 2021 forecast is raised on higher expected exports of butterfat products. The skim-solids basis import estimate for 2020 in unchanged but the 2021 forecast is reduced. The skim-solids basis export estimate for 2020 is reduced on recent trade data while the 2021 forecast is unchanged. Dairy product price estimates for 2020 reflect December price data. For 2021, cheese, butter, nonfat dry milk (NDM), and whey price forecasts are raised from last month on firm domestic demand. The 2021 Class III price and Class IV price are raised from the previous month on higher product prices. The 2021 all milk price forecast is raised to $17.65 per cwt.

COTTON: The U.S. 2020/21 cotton outlook shows higher exports, and lower production and ending stocks this month. Production is lowered nearly 1 million bales to 15.0 million, led by a 500,000-bale decline in Texas. U.S. mill use is reduced 100,000 bales, but exports are raised 250,000 bales as rebounding world demand helps sustain a strong export pace. With lower production and higher demand, 2020/21 U.S. ending stocks are 1.1 million bales lower relative to last month, at 4.6 million bales or 26 percent of use. The upland season-average price received by U.S. farmers is projected 3 cents higher this month, at 68 cents per pound. The largest changes in the global 2020/21 cotton outlook this month are lower production and ending stocks, led by changes in the United States. World production is forecast more than 1.0 million bales lower, with non-U.S. reductions including Pakistan, Mali, and Argentina. Outside the United States, Pakistan’s 200,000-bale decline is the largest change, with smaller upward revisions for Greece, Australia, and Turkey. Projected world consumption in 2020/21 is 100,000 bales higher this month, as a 500,000-bale increase for China and a 200,000-bale increase for Turkey are partly offset by reductions for Indonesia, Vietnam, the United States, and some smaller countries. Similarly, a 500,000-bale increase in China’s projected imports is partly offset by a 200,000-bale decline for Indonesia. World trade is projected 350,000 bales higher, with Australia and Mexico exports up by smaller amounts than the United States, and lower exports projected for Mali. World ending stocks in 2020/21 are 1.2 million bales lower this month, at 96.3 million bales, 3.0 million bales lower than the year before.