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May 11 – Not a lot of surprises, but USDA’s monthly update of world supply and
consumption prospects, indicates that bumper supplies of major crops will keep
downward pressure on most farm-gate prices, while the livestock industry starts
to regain profitability.
some of the highlights:
Corn: Production for 2010/11 is
projected at 13.4 billion bushels, up 260 million from 2009/10 as a
2.3-million-acre increase in intended plantings more than offsets a projected
decline in yield from last year’s record.
Based on the rapid pace of 2010 planting as reported in Crop Progress,
the 2010/11 yield is projected at 163.5 bushels per acre, 2.7 bushels above the
1990-09 trend. Corn supplies are
projected at a record 15.1 billion bushels, 325 million higher than in 2009/10.
Total U.S. corn use
for 2010/11 is projected up 2 percent from the current year with higher
expected food, seed, and industrial (FSI) use and exports more than offsetting
a decline in projected feed and residual use.
FSI use is projected 4 percent higher with a 200-million-bushel increase
in corn used for ethanol accounting for most of the increase. Corn ethanol use, projected at 4.6 billion
bushels, is supported by rising Federal biofuels mandates and strong blending
incentives that continue to boost ethanol usage. Exports are projected up 3 percent with
larger supplies and lower prices, but rising foreign feed grain supplies,
mostly corn, limit export growth in 2010/11.
season-average farm price is projected at $3.20 to $3.80 per bushel compared
with the 2009/10 forecast of $3.50 to $3.70 per bushel.
Beginning stocks are up 45% from 2009/10 and the highest in a decade
more than offsetting a forecast 8% reduction in this year’s crop. Total production is projected at 2,043
million bushels, down 173 million from last year. U.S. wheat supplies for 2010/11 are
projected at 3,103 million bushels, up 4% from the current year and the largest
Total U.S. wheat use
for 2010/11 is projected up 3 percent with higher expected domestic use and
exports. Exports are projected at 900 million bushels, up 35 million bushels
from the current year as large, early season supplies and lower prices improve U.S.
competitiveness. Despite higher expected
ending stocks are projected at nearly 1 billion bushels and the highest since
1987/88. The season-average farm price for
all wheat is projected at $4.10 to $5.10 per bushel, compared with the 2009/10
projection of $4.90 per bushel.
Oilseeds: U.S. oilseed production for 2010/11
is projected at 99.1 million tons, up less than 1 percent from 2009/10. Soybean production is projected at 3.3
billion bushels, down 49 million from the record crop produced in 2009 as
increased planted and harvested area are more than offset by lower yields. Harvested area is projected at a record 77.1
million acres based on an average harvested-to-planted ratio. Soybean yields
are projected at a trend level of 42.9 bushels per acre, down 1.1 bushels from
the 2009 record. Soybean supplies are
projected at 3.5 billion bushels, unchanged from 2009/10 as larger beginning
stocks offset lower production. Soybean
ending stocks for 2009/10 are unchanged at 190 million bushels as increased
exports and crush projections are offset by reduced residual.
crush for 2010/11 is projected to decline 5 percent. Sharply lower U.S. soybean meal exports are only
partly offset by a small increase in domestic soybean meal use. U.S.
export prospects are reduced due to increased export competition from Argentina and India. Domestic soybean oil consumption is projected
to increase 3 percent as biodiesel production gains more than offset reduced
food use. Soybean oil used for biodiesel
production is projected at 2.9 billion pounds, up 700 million from
2009/10. A rebound in South American
supplies from last year’s drought-reduced levels is projected to limit U.S. soybean
exports to 1.35 billion bushels in 2010/11, down from a record 1.455 billion in
2009/10. Ending stocks for 2010/11 are
projected at 365 million bushels, up 175 million from the projection for
season-average soybean price for 2010/11 is projected at $8.00 to $9.50 per
bushel compared with $9.50 per bushel in 2009/10. Soybean meal prices are forecast at $230 to
$270 per short ton compared with $295 per ton for 2009/10. Soybean oil prices are projected at 34 to 38
cents per pound compared with 36 cents for 2009/10.
Rice: Total rice supplies in 2010/11
are projected at a record 296.4 million cwt, 9% above the previous year, and 7%
above the previous record in 2005/06. U.S. rice
production is projected at a record 244.0 million cwt, 11% above 2009/10, and
5% above the previous record in 2004/05.
Planted area in 2009 is estimated at 3.41 million acres, up 9% from 2009
and the largest area since 1999. Harvested
area is estimated at 3.39 million acres and is an average of the previous
five-year harvested-to-planted ratios.
Average rice yield is projected at a near-record 7,202 pounds per acre,
up 2% from the previous year, but down less than 1 percent from the 2007/08
record. Imports for 2009/10 are
projected at 22.0 million cwt, up 5% from the previous year.
2010/11 rice use is projected at a record 245.0 million cwt, 2% above the year
earlier. U.S. domestic and residual use is
projected at a record 138.0 million cwt, 2% above 2009/10. Exports are
projected at 107.0 million cwt, 2 percent above revised 2009/10. Despite an expected increase in global import
demand, competition for those markets will be greater as U.S. and
competitor supplies are expected to be large.
ending stocks in 2010/11 are projected at 51.4 million cwt, 69% above the
previous year, and the largest stocks since 1985/86.
2010/11 long-grain season-average farm price is projected at $10.00 to $11.00
per cwt compared to a revised $12.90 to $13.10 for the previous year. The combined medium- and short-grain price is
projected at $14.50 to $15.50 per cwt, compared to a revised $17.65 to $17.85
for the year earlier. The 2010/11 all
rice price is projected at $11.15 to $12.15 per cwt, compared to a revised
$14.05 to $14.25 per cwt for 2009/10.
The 2010/11 U.S.
cotton projections include higher supplies offset by higher exports relative to
last season, resulting in marginally lower ending stocks. Production is projected at 16.7 million
bales, which is based on the March 31 Prospective Plantings, combined with 7%
abandonment and a yield of 815 pounds per harvested acre. Projected abandonment is reduced from the
10-year average of 11% due to unusually favorable soil moisture in Texas. Domestic mill use
is projected at 3.3 million bales, a marginal reduction from 2009/10. Exports
are projected to rise 1.5 million bales from 2009/10 to 13.5 million, as
foreign demand is expected to outpace supply.
Ending stocks are projected at 3.0 million bales, the lowest since
1995/96. The projected range for the
marketing-year average price received by producers is 60 to 74 cents per pound.
Livestock, poultry and dairy: Total U.S. meat
production for 2011 is projected to be slightly higher than 2010 as increased
pork and poultry production more than offset declines in beef production. Beef production for 2011 declines on tighter
supplies of cattle. Declining cow inventories and calf crops over the past
several years, coupled with expected lower imports of cattle during 2011 will
result in a smaller pool of cattle available for slaughter. Pork production for 2011 is expected to
increase as improved returns encourage increased sows farrowing and carcass
weights are heavier. Both broiler and
turkey production for 2011 are forecast higher as producers respond to improved
returns. Egg production is forecast higher as production gradually builds upon
the measured expansion currently underway.
perspective on the report, listen to our audio update for Tuesday: USDA takes
first stab at new-crop balance sheets and prices in May S&D report.
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