WASDE report forecasts higher crop and livestock prices ahead
WASDE: Higher crop and livestock prices ahead
By Agri-Pulse Staff
© Copyright Agri-Pulse Communications, Inc.
Washington, Sept. 10 - With strong global demand and production shortages in some regions, prices for most U.S. crops and livestock are expected to increase next year, according to USDA's World Agricultural Supply and Demand Estimates. Rice is the only exception.
Here are some of the highlights:
Wheat: The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month. Projected stocks are lowered, but would remain the second highest in more than a decade.
Corn: The season-average farm price is projected at $4.00 to $4.80 per bushel, compared with $3.50 to $4.10 last month.
Oilseeds: The U.S. season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range. The soybean meal price is projected at $270 to $310 per short ton, up $20 on both ends of the range. The soybean oil price range is projected at 37.5 to 41.5 cents per pound, up 1 cent on both ends of the range.
Rice: The 2010/11 all rice season-average farm price is forecast at $10.30 to $11.30 per cwt, down 45 cents per cwt on each end of the range from last month compared to $14.00 per cwt for 2009/10
Cotton: The average price received by producers is forecast at 63 to 77 cents per pound, 2 cents above last month. The midpoint of the interval, 70 cents per pound, would also be the highest price since 1995/96.
Here's a summary of the full report:
WHEAT: With higher expected world demand for wheat, U.S. wheat ending stocks for 2010/11 are projected lower this month, according to the USDA's World Agricultural Supply and Demand Estimates report.Strong early season sales and reduced supplies in EU-27, particularly of higher quality wheat, support an improved outlook for U.S. exports. Wheat exports are projected 50 million bushels higher with larger expected shipments of Hard Red Winter, Hard Red Spring, and White wheat. Projected ending stocks are lowered by the same amount to 902 million bushels. At the projected level, stocks would remain the second highest in more than a decade. The 2010/11 season-average farm price is projected at $4.95 to $5.65 per bushel, compared with $4.70 to $5.50 last month.
Global wheat supplies for 2010/11 are projected down 0.7 million tons as higher carryin mostly offsets a 2.7-million-ton reduction in world output. Much of the offset is explained by Canada, where beginning stocks are increased 1.5 million tons, as reported by Statistics Canada, and production is increased by 2.0 million tons. These changes mostly offset lower production in Russia and EU-27. Production for Russia is lowered 2.5 million tons based on the latest harvest results for the drought-affected central growing areas in the Volga and Urals Federal Districts. EU-27 production is lowered 2.4 million tons with the largest reductions for Hungary and Romania where heavy summer rains reduced yields. Smaller reductions in a number of other member countries also reduce EU-27 production. Although the reduction for Germany is small, persistent and heavy August rains have reduced supplies of high quality milling wheat. Other production changes include a 0.3-million-ton reduction for Belarus and a 0.4-million-ton increase for Morocco.
World wheat trade for 2010/11 is raised with global exports projected 1.4 million tons higher. Export shifts among countries largely reflect availability of supplies and increased competition from North America. Exports are raised 2.0 million tons for Canada and 1.4 million tons for the United States. Exports are also raised 0.5 million tons each for Iran and Kazakhstan. A 0.5-million-ton increase in Russia exports reflects larger-than-expected shipments during early August, before implementation of the export ban on August 15. These increases more than offset a 3.0-million-ton reduction for EU-27 and a 0.5-million-ton reduction for Australia.
EU-27 exports are lowered with reduced supplies and increased competition from Canada. Logistical constraints are expected to limit exports from Australia.
World wheat imports for 2010/11 are raised with increases for Russia and Nigeria. Imports for Russia are raised 1.4 million tons as imports from regional suppliers support domestic usage, particularly for feeding. World wheat consumption is lowered 3.8 million tons with lower consumption in EU-27, Russia, and Kazakhstan outweighing increases for Pakistan, Canada, and Nigeria. Wheat feeding is lowered 2.0 million tons for EU-27 with imported coarse grains expected to partly replace wheat in livestock and poultry rations. Global ending stocks are projected 3.0 million tons higher with increases for EU-27, Canada, and Australia. Ending stocks are lowered for Pakistan and Russia.
COARSE GRAINS: Projected U.S. feed grain supplies for 2010/11 are lower this month with lower carryin and reduced production for corn and sorghum. Beginning stocks for corn are projected 40 million bushels lower with higher 2009/10 corn use for ethanol and a small increase in exports. Corn production for 2010/11 is forecast at 13,160 million bushels, down 205 million, but still the largest crop on record. The national average yield is forecast at 162.5 bushels per acre, down 2.5 bushels.
Domestic corn use for 2010/11 is lowered 100 million bushels with lower expected feed and residual use as higher prices trim feeding demand and the smaller crop reduces residual disappearance. Projected exports are raised 50 million bushels with rising world demand for coarse grains, particularly corn. U.S. corn ending stocks are expected to decline to 1.1 billion bushels, down 196 million bushels. At this level, 2010/11 carryout would be the lowest since 2003/04. Stocks as a percentage of total use would be the lowest since 1995/96. The season-average farm price is projected at $4.00 to $4.80 per bushel, compared with $3.50 to $4.10 last month.
Other 2010/11 feed grains changes include lower projected ending stocks for sorghum and oats. Sorghum production is forecast 7 million bushels lower. Sorghum exports are raised 10 million bushels with stronger world demand for coarse grains. Sorghum feed and residual use is lowered 10 million bushels. Oats imports are lowered 10 million bushels with lower expected production in Canada.
Global coarse grain supplies for 2010/11 are projected down 8.7 million tons with reduced foreign and U.S. production. Most of the foreign reductions this month are in EU-27 and FSU-12 countries. A 10.3-million-ton reduction in world coarse grain production for 2010/11 is partly offset by larger corn beginning stocks for Brazil with a 1.8-million-ton increase in 2009/10 corn production. Lower U.S. and EU-27 corn production account for more than half of the reduction in 2010/11 global coarse grain output. EU-27 corn production is reduced 1.2 million tons with lower reported area and yields for France and Germany and lower reported yields for Italy, Austria, and Spain.
World barley production is lowered 2.0 million tons with reductions for Russia, EU-27, Belarus, and Morocco.
World oats production is reduced 0.9 million tons with lower production for EU-27, Canada, and Belarus. Lower rye production in EU-27 and Belarus lowers world output 1.0 million tons.
Global coarse grain trade is increased this month with U.S. corn exports raised 1.3 million tons. A 0.5-million-ton reduction for EU-27 corn exports is offset by a 0.5-million-ton increase for Ukraine. Corn imports are raised 2.0 million tons for EU-27 as corn partly replaces wheat in feeding. Russia corn imports are raised 0.7 million tons helping to offset reduced supplies of feed barley. Global corn consumption is lowered as reduced prospects for corn feeding in the United States and Ukraine more than offset higher expected corn feeding in EU-27, Russia, Mexico, and Canada. Global corn ending stocks are projected 3.6 million tons lower.
RICE: U.S. rice production in 2010/11 is forecast at a record 255.3 million cwt, up 9.4 million from last month due to both an increase in area harvested and yield. Harvested area is estimated at 3.62 million acres, up 130,000 acres from last month and the second highest on record. The average yield is estimated at 7,047 pounds per acre, up 8 pounds per acre. Long-grain production is estimated at a record 191.8 million cwt, up 4.6 million from last month, while combined medium- and short-grain production is estimated at 63.5 million, an increase of 4.9 million.
All rice beginning stocks for 2010/11 are raised 2.8 million cwt from last month to 36.7 million based on USDA's Rice Stocks report released on August 27. The import projection is reduced slightly based in part on the revised 2009/10 estimate and the recent trend of little to no growth in imports. Domestic and residual use for 2010/11 is lowered 2.0 million cwt to 127.0 million based mostly on a reduction in the 2009/10 estimate.
Exports for 2010/11 are projected at 119.0 million cwt, up 5.0 million cwt from last month, and up 8.8 million from the revised 2009/10 estimate. Long-grain exports are raised 3.0 million cwt to 83.0 million, and combined medium- and short-grain exports are up 2.0 million to 36.0 million. Larger exports are expected to the Middle East and the Western Hemisphere. Ending stocks for 2010/11 are projected at 65.5 million cwt, up 8.7 million from last month, up 28.8 million from 2009/10, and the largest stocks since 1985/86.
The 2010/11 all rice season-average farm price is forecast at $10.30 to $11.30 per cwt, down 45 cents per cwt on each end of the range from last month compared to $14.00 per cwt for 2009/10.
The long-grain season-average farm price range is projected at $8.50 to $9.50 per cwt, down 50 cents per cwt from last month compared to $12.80 per cwt for 2009/10. The combined medium- and short-grain farm price range is projected at $16.00 to $17.00 per cwt, down $1.00 per cwt on each end of the range from last month compared to a revised $17.70 per cwt for 2009/10.
Projected global 2010/11 rice supplies and use are both lowered from last month. Global rice production is projected at a record 454.6 million tons, down 4.6 million tons from last month's estimate, mainly due to large declines for several countries including China, Indonesia, and Pakistan.
China's 2010/11 rice crop is reduced 1.5 million tons to 136.0 million, due mainly to a decrease in the early rice crop. Both area and yield are reduced by early season drought in some areas combined with late-season flooding in other areas. Indonesia's 2010/11 rice crop is reduced 2.0 million tons to 38.0 million, based in part on a report from the U.S. Agricultural Counselor in Jakarta. Indonesia's 2009/10 rice crop is also reduced-a reduction of 1.7 million tons to 37.1 million. Indonesia's yield growth has stagnated due to weather, pests, and disease problems. Pakistan's 2010/11 rice crop is reduced by 1.2 million tons or 18 percent to 5.3 million as severe flooding lowered both area and average yield.
Global 2010/11 exports are reduced by 0.6 million tons to 31.0 million, mainly due to a reduction for Pakistan. Global consumption is lowered by nearly 2.3 million tons, mainly due to decreases for China (-0.5 million) and Indonesia (-1.35 million). Global ending stocks for 2010/11 are projected at 94.6 million tons, down 3.0 million from last month, but up slightly from 2009/10. Stocks are lowered for China, Indonesia, Vietnam, and Iran, and raised for the United States.
OILSEEDS: U.S. oilseed production for 2010/11 is projected at 104.8 million tons, up 1.5 million from last month. Soybean production is forecast at a record 3.483 billion bushels, up 50 million from last month based on an increase in the projected yield to a record 44.7 bushels per acre. Production of peanuts and cottonseed are also raised this month.
Soybean exports for 2010/11 are increased 50 million bushels to 1.485 billion reflecting strong early season sales and a projected increase in global import demand, especially for China. Soybean ending stocks are projected at 350 million bushels, down 10 million from last month as higher export demand more than offsets the increased supply.
Soybean exports for 2009/10 are projected at a record 1.495 billion bushels, up 25 million from last month reflecting strong shipments in the final weeks of the marketing year. The increase is partly offset with a lower residual, leaving ending stocks projected at 150 million bushels, down 10 million. Other changes for 2009/10 include reduced use of soybean oil for biodiesel and increased soybean oil exports. Season ending soybean oil stocks are projected record high at 3.21 billion pounds.
Prices for soybeans and products are all raised this month, supported by strong prices for corn and wheat. The U.S. season-average soybean price range for 2010/11 is projected at $9.15 to $10.65 per bushel, up 65 cents on both ends of the range. The soybean meal price is projected at $270 to $310 per short ton, up $20 on both ends of the range. The soybean oil price range is projected at 37.5 to 41.5 cents per pound, up 1 cent on both ends of the range.
Global oilseed production for 2010/11 is projected at 440.6 million tons, up 0.9 million from last month. Global soybean production is projected at 254.9 million tons, up 1.2 million mainly due to a higher production forecast for the United States. China soybean production is reduced 0.2 million tons to 14.4 million based on lower yields. Global rapeseed production is projected higher as increased production for Canada more than offsets reduced crops for Russia and Ukraine. Other changes include reduced peanut and cottonseed production for China, reduced cottonseed production for Pakistan, increased cottonseed production for Australia, and reduced palm oil and palm kernel production for Indonesia.
Global oilseed trade for 2010/11 is raised 3.8 million tons to 108.7 million. China soybean imports are raised 3 million tons to 55 million, up from a revised 50 million in 2009/10. Imports are raised to reflect increased protein meal consumption and higher soybean stocks, now projected to reach 15.5 million tons. Global oilseed stocks are projected lower mainly due to reduced soybean stocks in the United States and South America.
SUGAR: Projected U.S. sugar supply for fiscal year 2010/11 is increased 101,000 short tons, raw value, from last month, due to higher beginning stocks and production. Beet sugar production is increased 80,000 tons based on higher forecast U.S. sugarbeet production. Forecast U.S. sugarcane production is little changed from last month. Sugar use is increased 275,000 tons in line with the increase for 2009/10.
For 2009/10, U.S. supplies are increased 141,000 tons, due to higher production and imports. Louisiana cane sugar production is increased 35,000 tons based on expectations of an early start to the 2010-crop harvest in September. Imports are increased 105,000 tons, with 135,000 tons more from Mexico and high-tier imports more than offsetting increased shortfall under the tariff rate quota. Total use is increased 120,000 tons to reflect the stronger-than-expected pace of deliveries in recent months. Ending stocks are increased 21,000 tons.
For Mexico, 2010/11 ending stocks are lowered 64,000 metric tons, raw value, due to higher domestic use more than offsetting slightly higher beginning stocks. Mexico's 2009/10 beginning stocks are increased to reflect recently released government data, while increased domestic use and exports are nearly offsetting.
LIVESTOCK, POULTRY, AND DAIRY: Total U.S. meat production forecasts for 2010 and 2011 are reduced slightly from last month. The forecast for 2010 is reduced as lower pork and broiler production more than offset an increase in beef production. The 2011 forecast is reduced as higher feed prices encourage cattle producers to keep cattle on forage longer and tempers pork, broiler, and turkey production gains.
USDA's Quarterly Hogs and Pigs report will be released on September 24 and will provide an indication of sow farrowing intentions into early 2011. Egg production forecasts for 2010 are adjusted to reflect a revision in second-quarter production but the 2011 forecast is unchanged.
Beef imports are reduced for 2010 and 2011 as imports have been lower than expected. Export forecasts for beef are raised on continuing strong sales to a number of markets. Pork and poultry trade forecasts are unchanged from last month.
Livestock and poultry prices for 2010 are raised but forecasts for 2011 cattle and hog prices are unchanged. The broiler and turkey price forecasts for 2011 are raised slightly on expected tightness in supplies. Egg prices for 2010 are forecast higher due to the recent spike in third-quarter prices, but the forecast for 2011 is unchanged.
Forecast milk production for 2010 and 2011 is raised from last month. Producers continue to add cows to the herd and inventories are forecast to increase into mid-2011. The rate of growth in milk per cow is also increased from last month. Fat basis export forecasts for 2010 are raised on strong sales of butterfat and cheese, but 2011 exports are lowered. Skim-solids exports for 2010 and 2011 are forecast higher than last month. Imports are reduced from last month due to higher U.S. production and strong demand in other importing countries. Ending stocks for 2011 are increased as U.S. production is forecast higher.
Strong demand for cheese and tight supplies of butter support higher forecast prices for 2010 and 2011. Stronger demand is forecast to absorb most of the increased production although prices are expected to be tempered during the latter part of 2011. Price forecasts for nonfat dry milk (NDM) are raised for 2010, but the 2011 forecast is unchanged from last month as increased supplies limit price gains. The whey price forecast is unchanged. Both Class III and Class IV price forecasts for 2010 and 2011 are raised due to the higher product prices. The all milk price is forecast to average $16.25 to $16.45 per cwt for 2010 and $15.85 to $16.85 per cwt for 2011.
COTTON: The 2010/11 U.S. cotton forecasts include higher production, domestic mill use, and exports relative to last month. Production of 18.8 million bales is nearly 2 percent above last month, based on increases across all regions of the cotton belt. Domestic mill use is raised to 3.6 million bales, reflecting recent increases in consumption rates and prospects for additional spinning capacity. Exports are raised 500,000 bales to 15.5 million due to continued very tight foreign supplies. U.S. ending stocks are now forecast at 2.7 million bales, 500,000 bales below last month. If realized, both the stocks level and the stocks-to-use ratio of 14 percent would be the smallest since 1995/96. The average price received by producers is forecast at 63 to 77 cents per pound, 2 cents above last month. The midpoint of the interval, 70 cents per pound, would also be the highest price since 1995/96.
The aggregate world cotton 2010/11 forecasts are adjusted slightly from last month. World production is raised marginally, as reductions for China, Pakistan, and Tanzania are more than offset by increases for Australia and the United States. Consumption is reduced for Pakistan and others but is raised for India and the United States, resulting in a slight net reduction. World trade is reduced, due mainly to a 1.5-million-bale reduction in exports by India resulting from the recent restrictions imposed by the government. Lower exports by India are mostly offset by higher exports from Australia, the United States, and Brazil. World ending stocks are about unchanged from last month. The projected world stocks-to-use ratio of 38 percent is the lowest since 1994/95.
To return to the News Index page, click: www.agri-pulse.com