Facebook
Twitter
YouTube
Linkedin
800-622-7628

USDA Data


Minimize

10

May USDA Supply & Demand

posted on

For those who think the USDA never gives us good news, remember this report as one that actually did, that is if you are a producer of corn and beans. Wheat producers were not as lucky because the USDA just reaffirmed that wheat supplies are getting bigger.

The corn and soybean reports had increasing USDA demand estimates combined with reduced South American crop prospects. Together the two ingredients gave USDA analysts reason to cut endings stocks estimates for old crop U.S. corn and beans left in the bin. And more surprisingly gave us smaller ending stocks than traders expected for the end of the 2016-17 crop year.

U.S new crop corn production was as big as traders expected totaling 14.181 billion bushels. The good news came in the new crop’s ending stocks which was only 2.153 billion bushels while traders were expecting 2.294 billion. Bigger demand is the reason.

U.S. new crop bean production was pegged at 3.800 billion bushels, also bigger than traders expected. But again better usage pulled the ending stocks down to 305 million bushels, 100 million less than traders expected.

As important as these USDA number are, our futures prices, especially soybeans have been being led by the currency changes of the Brazilian Real. When the Real is stronger, U.S. bean prices are stronger. When the Real falls, so do beans. After the smoke clears on today’s number, watch the Real for market clues.

 

Here's what the USDA had to say:

 

COARSE GRAINS: U.S. feed grain supplies for 2016/17 are projected up 4 percent from the 2015/16 record with increases in both beginning stocks and production. Corn production for 2016/17 is projected at 14.4 billion bushels, up 829 million from 2015/16 and 214 million higher than the previous record in 2014/15. A 5.6-million-acre increase in corn plantings more than offsets a small reduction in yield. The U.S. corn yield is projected at 168.0 bushels per acre, down 0.4 bushels from 2015/16. Corn supplies for 2016/17 are projected at a record 16.3 billion bushels, up 886 million from 2015/16, which more than offsets projected declines for sorghum, barley, and oats.

U.S. corn use for 2016/17 is projected at a record 14.1 billion bushels, 4 percent higher than for 2015/16. Feed and residual use for 2016/17 is projected 300 million bushels higher with higher production, lower expected prices, and further expansion in animal numbers in 2016/17. Corn used to produce ethanol is projected 50 million bushels higher than in 2015/16 with a reduction in sorghum use for ethanol and higher expected ethanol blending. Exports for 2016/17 are projected 175 million bushels higher than this month’s upwardly revised projection for 2015/16. More competitive prices and reduced supplies and competition from Brazil support gains in U.S. exports for 2016/17 and 2015/16. U.S. corn ending stocks for 2016/17 are projected at 2.2 billion bushels, up 350 million from the 2015/16 projection. If realized, stocks would be the highest since the mid-1980s; however, the stocks-to-use ratio remains far lower than in those years when domestic support policies ballooned stocks to more than 50 percent of annual usage. The season-average 2016/17 farm price is projected at $3.05 to $3.65 per bushel, down 25 cents at the midpoint from this month’s slightly higher outlook for 2015/16.

Global coarse grain supplies for 2016/17 are projected at a record 1,543.2 million tons, up 41.0 million tons from 2015/16 with nearly half of the increase on larger U.S. beginning stocks and production. Global corn production for 2016/17 is projected at 1,011.1 million tons, up 42.2 million from 2015/16, and just short of the record 1,013.5 million in 2014/15. In addition to the projected 21.1-million-ton U.S. increase, 2016/17 corn production is also higher for most of the world’s major producing countries with production rebounds for South Africa and EU, and higher area in Argentina, Russia, and Ukraine. Brazil corn production for 2016/17 is 1.0 million tons higher than this month’s lowered outlook for 2015/16 as area is expected to decline slightly, but yields rise from those now expected for the 2015/16 crop. Partly offsetting these increases for 2016/17 is a 6.6-million-ton reduction for China corn, as changes in support policies and lower domestic prices reduce incentives for corn planting.

Global corn consumption for 2016/17 is projected at a record 1,011.9 million tons, 43.0 million tons higher than in 2015/16. The largest increases are for China with consumption projected up 9.5 million tons and the United States with consumption projected up 9.2 million tons. Smaller increases are projected for EU, Argentina, Brazil, India, Russia, Vietnam, Mexico, and South Korea.

Global corn exports for 2016/17 are higher with increases for Argentina, EU, and Ukraine more than offsetting a reduction for Brazil. Corn imports for 2016/17 are lower with declines for South Africa, EU, Vietnam, and China partly offset by increases for Mexico, Turkey, Egypt, Iran, and South Korea. Much of the imbalance in global marketing year imports and exports is driven by the timing of Brazil and Argentina exports and the South Africa change from a net importer to a net exporter. The 2016/17 local marketing years for these Southern Hemisphere exporting countries do not start until 2017, while the local marketing years for many major importers begin in October 2016. Corn shipments by Southern Hemisphere exporters between October 2015 and February 2016 were strong, appearing as 2014/15 exports, but accounted for as 2015/16 imports. Reduced 2015/16 Brazil second-crop corn limits export prospects between October 2016 and February 2017. As a result, global imports decline in 2016/17 at the same time that U.S. exports expand. Global 2016/17 corn ending stocks are projected at 207.0 million tons, down slightly from the 207.9 million for 2015/16. Lower stocks in China, EU, and Brazil more than offset the projected U.S. increase.

 

OILSEEDS: U.S. oilseed production for 2016/17 is projected at 112.9 million tons, down 3.1 million from 2015/16 mainly on lower soybean production. Production forecasts are also lower for sunflowerseed, canola, and peanuts, but higher for cottonseed. Soybean production is projected at 3,800 million bushels, down 129 million from the 2015 crop on lower harvested area and trend yields. Supplies are projected at 4,230 million bushels, up 1.9 percent from 2015/16 with higher beginning stocks more than offsetting lower production.

The U.S. soybean crush for 2016/17 is projected at 1,915 million bushels, up 35 million from 2015/16. Domestic soybean meal disappearance is projected to increase with expected gains in U.S. meat production. With limited gains for competing exporters, U.S. soybean meal exports are projected at 12.0 million short tons, up 0.5 million from 2015/16. Soybean exports are forecast at 1,885 million bushels, up 145 million from the revised 2015/16 projection. Sharply reduced stocks in South America this fall will limit competition during the first half of the marketing year. In addition, limited soybean production gains are projected for the 2016/17 South American harvest in early 2017. With forecasted global soybean import growth of 3.8 percent, the U.S. soybean export share is projected at 37 percent, up slightly from 2015/16 and near the 5-year average. U.S. ending stocks for 2016/17 are forecast at 305 million bushels, down 95 million from the revised 2015/16 projection. The 2016/17 U.S. season-average soybean price range is forecast at $8.35 to $9.85 per bushel compared with $8.85 per bushel in 2015/16. Soybean meal prices are forecast at $300 to $340 per short ton, compared with $310 per ton for 2015/16. Soybean oil prices are forecast at 30.5 to 33.5 cents per pound compared with 30.0 cents for 2015/16.

Global oilseed production for 2016/17 is projected at 533.8 million tons, up 2.1 percent from 2015/16. Global soybean production is projected at 324.2 million tons, up 8.3 million with gains for India, Brazil, Ukraine, and Argentina, partly offset by lower U.S. production. The Brazil soybean crop is projected at 103.0 million tons, up 4.0 million on higher area and yields. China soybean production is projected higher on increased harvested area as policy changes reduce incentives to plant corn. The Argentina soybean crop is projected at 57.0 million tons, up 0.5 million from the revised 2015/16 crop. The 2015/16 crop is projected at 56.5 million tons, down 2.5 million mainly on lower area resulting from flooding in April. Total global oilseed supplies are up less than 1 percent from 2015/16. With crush projected to increase 2.3 percent, global oilseed ending stocks are projected at 76.9 million tons, down 9.5 percent from 2015/16.

Global protein meal consumption is projected to increase 3.2 percent in 2016/17. Protein meal consumption is projected to increase 3.7 percent in China which accounts for 32 percent of global protein consumption gains. Global soybean exports are projected at 138.3 million tons, up 4.3 percent from 2015/16. China soybean imports are projected at 87.0 million tons, up 4.0 million from 2015/16. Global vegetable oil consumption is projected at 183.8 million tons, up 3.0 percent in 2016/17 led by increases for India, China, and Indonesia. Global vegetable oil ending stocks are projected at 16.9 million tons, down 7.9 percent from 2015/16.

 

WHEAT: U.S. wheat supplies for 2016/17 are projected up 6 percent from 2015/16 on higher beginning stocks and imports. All wheat production is projected at 1,998 million bushels, down 3 percent. The year-to-year decrease is due to a sharp reduction in planted area that more than offsets increased yields. The all wheat yield is projected at 46.7 bushels per acre, up 7 percent from the previous year. The survey-based forecast for 2016/17 winter wheat production is up with higher yields more than offsetting reduced harvested area. Winter wheat has benefited from excellent spring growing conditions and yields are projected higher for Hard Red Winter, Soft Red Winter, and White Winter. Spring wheat and Durum production for 2016/17 is projected to decline 16 percent on lower area, as well as a return to trend yield, which is below last year’s level.

Total U.S. wheat use for 2016/17 is projected up 7 percent from the previous year on higher exports, feed and residual use, and food use. The 2016/17 exports are projected at 875 million bushels, up 95 million bushels from the previous year’s low level but still well below average. Large supplies in several major competing countries will continue to limit U.S. exports. Feed and residual use is projected up 30 million bushels on increased supplies. U.S. ending stocks are projected to rise 51 million bushels from the elevated 2015/16 total to 1,029 million, the highest since the 1987/88 crop year. The all wheat season-average farm price is projected at $3.70 to $4.50 per bushel; the mid-point of this range is the lowest in 11 years.

Global wheat supplies are projected to rise 2 percent from 2015/16 as increased beginning stocks more than offset a decline in production from the previous year’s record. Total wheat production is projected at 727.0 million tons, the second highest total on record. Large crops are expected in most key competing countries and favorable spring growing conditions suggest that yields will be well above trend in the EU, Russia, and Ukraine. Global wheat consumption for 2016/17 is projected slightly higher than in 2015/16 with higher food use more than offsetting a reduction in world wheat feeding. Global import demand for 2016/17 is down from last year’s record, but still very large. Global ending stocks for 2016/17 are projected at a record 257.3 million tons, up 14.4 million from 2015/16.

 

 

 

Old Crop 2015-16

2015-16 USDA U.S. Grain Carryout (bln bu)
 
USDA May
2015-16
Average Trade Est.
Range of
Trade Est.
USDA Apr
2015-16
Corn
1.803
1.841
1.762-1.890
1.862
Soybeans
0.400
0.426
0.395-0.445
0.455
Wheat
0.978
0.981
0.961-1.011
0.976

 

2015-16 USDA World Grain Carryout (million tons)
 
USDA May
2015-16
Average Trade Est.
Range of
Trade Est.
USDA Apr
2015-16
Corn
207.87 
205.75
200.50-209.00
208.91
Soybeans
 74.25
76.28
71.50-78.32
79.02
Wheat
 242.91
239.77
238.30-241.20
239.26
 
New Crop 2016-17

2016-17 USDA U.S. Production (bln bu)
 
USDA May
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
2015-16
Corn
14.430
14.181
13.590-14.431
13.601
Soybeans
3.800
3.794
3.703-3.930
3.929

 

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA May
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
2015-16
Corn
2.153
2.294
1.950-2.555
1.862
Soybeans
0.305
0.405
0.290-0.500
0.455
Wheat
1.029
0.997
0.820-1.140
0.976

 

2016-17 USDA World Grain Carryout (million tons)
 
USDA May
2016-17
Average Trade Est.
Range of
Trade Est.
USDA Apr
2016-17
Corn
207.04
211.56
201.50-224.00
N/A
Soybeans
68.21
73.23
65.28-84.70
N/A
Wheat
257.34
242.98
225.00-255.69
N/A
Categories: | Tags: | View Count: (4997) | Return
Click Here to Sign Up for a Free 30 Day Trial
Click Here to start your subscription today
Give Us A Call

These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.