World Agricultural Supply and Demand Estimates as published by USDA
The outlook for 2018/19 U.S. wheat this month is larger supplies, reduced domestic use, unchanged exports, and higher ending stocks. Wheat production is raised 7 million bushels to 1,884 million from the NASS Small Grains Summary, issued on September 28. Projected imports increased 5 million bushels to 140 million on higherthan-expected imports of spring wheat and Durum in the first quarter (June-August). The NASS Grain Stocks report indicated a 21 percent year-to-year increase in implied disappearance for first quarter feed and residual. But record-large 2018/19 U.S. corn supplies are expected to restrain feed and residual use for the remainder of the year with the annual estimate reduced by 10 million bushels to 110 million. Wheat exports are unchanged at 1,025 million bushels but there are offsetting by-class changes with White higher and Hard Red Winter lower. Projected ending stocks are higher at 956 million bushels but still 13 percent below last year’s revised 1,099 million. The season-average farm price range is unchanged at the midpoint of $5.10 per bushel and the range is narrowed to $4.80 to $5.40.
Global 2018/19 wheat supplies are reduced, primarily on lower production forecasts for Australia and Russia. Australia’s production is decreased 1.5 million tons to 18.5 million on continued dry conditions and possible frost damage. This would be Australia’s smallest production since 2007/08. Russia’s wheat production is reduced 1.0 million tons to 70.0 million on lower-than-expected yields in some spring wheat areas. Projected global 2018/19 trade is lower, almost all on reduced Australian exports, which are down 1.0 million tons to 13.0 million. Global imports are decreased with Bangladesh, Azerbaijan, and Nigeria accounting for most of the reduction. Projected 2018/19 world consumption is fractionally lower, primarily on less use in Azerbaijan, Bangladesh, Nigeria, and the United States. Global ending stocks are reduced 1.1 million tons to 260.2 million, down 5 percent from last year’s record.
This month’s 2018/19 U.S. corn outlook is for lower production, increased exports, reduced feed and residual use and larger ending stocks. Corn production is forecast at 14.778 billion bushels, down 49 million on a reduced yield forecast. Harvested area is virtually unchanged from last month. Corn supplies are forecast record high, as a smaller crop is more than offset by an increase in beginning stocks based on the September 28 Grain Stocks report. Exports are raised 75 million bushels reflecting U.S. price competitiveness and reduced exports for Russia. Projected feed and residual use is lowered 25 million bushels based on a lower crop and indicated disappearance during 2017/18. Corn ending stocks for 2018/19 are raised 39 million bushels. The projected midpoint for the season-average corn price received by producers is unchanged at a range of $3.00 to $4.00 per bushel.
Grain sorghum production is forecast higher from last month, as a 3.9-bushel per acre increase in yield to 75.0 bushels per acre is partially offset by a reduction in harvested area. Barley and oat production estimates are updated based on the September 28 Small Grains Summary report.
Global coarse grain production for 2018/19 is forecast down 3.8 million tons to 1,343.4 million. The 2018/19 foreign coarse grain outlook is for lower production and consumption, and higher stocks relative to last month. Foreign corn production is forecast modestly higher reflecting projected increases for Egypt, Mali, Kenya, Canada, the EU, and Serbia that are partly offset by reductions for Russia and Malawi. The projected corn yield for Russia is lowered based on reported harvest results to date.
Corn exports are reduced for Russia, with more than offsetting increases for the United States, Serbia, and Canada. Corn imports are raised for Mexico and Israel, with the former based on lowered expected imports of sorghum. Foreign corn ending stocks are higher, mostly reflecting increases for Mexico, Egypt, and Iran that are partly offset by reductions for South Africa and Turkey. Global corn stocks, at 159.4 million tons, are up 2.3 million from last month.
The 2018/19 rice crop is reduced 0.7 million cwt to 218.8 million on lower yields. The average yield forecast is lowered 24 pounds per acre to 7,539 pounds. Decreases are in Texas and California. The long-grain crop is reduced 0.5 million cwt to 159.0 million. Medium- and short-grain production is lowered 0.2 million cwt to 59.8 million. All rice ending stocks are lowered 0.7 million cwt to 44.2 million as no other supply and demand changes are made this month. The all rice season-average farm price is unchanged at a range of $11.20 to $12.20 per cwt with the midpoint at $11.70.
Foreign rice supplies for 2018/19 are raised 0.9 million tons mainly on increased production. India’s crop is raised 1.0 million tons and Madagascar is raised 0.4 million, both on updated government data. Partly offsetting is a 0.5-million-ton reduction for Egypt on new government policies that restrict rice production. Global trade and consumption are only changed fractionally. With supplies rising more than use, global ending stocks are increased 0.8 million tons to 145.2 million.
U.S. oilseed production for 2018/19 is projected at 138.4 million tons, down 0.1 million from last month with lower soybean and sunflowerseed production only partly offset with higher canola production. Soybean production is forecast at 4,690 million bushels, down 3.5 million with higher yields offset by lower harvested area. The soybean yield is projected at 53.1 bushels per acre, up 0.3 bushels from the September forecast. Harvested area is reduced 0.6 million acres to 88.3 million. Increases for North Dakota, Nebraska, and Iowa are more than offset by reductions in many other states. Soybean supplies for 2018/19 are projected at a record 5,153 million bushels on higher beginning stocks. With soybean use unchanged, ending stocks are projected at 885 million bushels.
The 2018/19 U.S. season-average soybean price is forecast at $7.35 to $9.85, unchanged at the midpoint from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 28.0 to 32.0 cents per pound, respectively.
Global oilseed production for 2018/19 is projected at 603.9 million tons, down 0.7 million from last month as lower peanut production is partly offset by higher soybean and rapeseed production. Global soybean output is projected at a record 369.5 million tons, up 0.2 million with higher production for Canada partly offset by lower projections for India, the United States, and Mexico. The soybean and peanut crops for India are reduced on lower area harvested based on government reports. India’s peanut yield is also reduced due to below-normal and inconsistent rainfall in Gujarat where nearly half of the peanuts are produced. Despite lower global oilseed production, increased beginning stocks, mainly in the United States, results in a 2.0 million-ton increase to global oilseed ending stocks to 123.8 million. Global soybean ending stocks are increased 1.8 million tons to 110.0 million.
LIVESTOCK, POULTRY, AND DAIRY
The forecast for 2018 total red meat and poultry production is lowered from last month. Beef production is reduced from the previous month largely due to lower expected fourth-quarter fed cattle slaughter. Carcass weights are forecast lower on a higher expected proportion of cows in the slaughter mix. The pork production forecast is lowered on smaller second-half commercial hog slaughter and lighter carcass weights. The broiler and turkey production forecasts are reduced on expectations of slightly lower slaughter for the remainder of the year. The 2018 egg production forecast is raised from last month.
For 2019, the total red meat and poultry production forecast is raised from the previous month as higher expected beef production more than offsets lowered forecasts for pork and broiler production. Beef production is raised from last month as larger placements in late 2018 and early 2019 are marketed during 2019. However, carcass weights are lowered for the early part of the year. Pork production is forecast slightly lower from last month. Both hog slaughter and carcass weight forecasts are reduced. The 2019 broiler production forecast is reduced from last month while the turkey production forecast is unchanged.
Beef import forecasts are lowered for 2018 and 2019 while beef export forecasts remain unchanged. Pork import forecasts for 2018 and 2019 are reduced from last month. No change is made to the 2018 pork export forecast, but the 2019 export forecast is raised on strong global demand for competitively priced U.S. pork products. The 2018 and 2019 turkey export forecasts are reduced from last month on recent trade data and slower expected demand into next year. Annual broiler and egg export forecasts for 2018 and 2019 are unchanged from last month.
The 2018 cattle price for the fourth quarter is raised from last month, but no change is made to the 2019 price forecast. The hog price forecast is raised for the last quarter of 2018 and into 2019 on expected demand strength. Broiler and turkey price forecasts are unchanged at the midpoint for 2018 and 2019. The egg price forecast for fourth-quarter 2018 is raised on near-term demand strength, but no change is made to the 2019 price forecasts.
The milk production forecasts for 2018 and 2019 are raised from the previous month on a more rapid pace of growth in milk per cow. Cow numbers are raised for 2019. Fat basis imports for 2018 and 2019 are raised on continued strength in butterfat imports and slightly higher cheese imports. The 2018 and 2019 skim-solids basis import forecasts are lowered from the previous month. Exports on a fat basis are raised for 2018 on stronger cheese exports, but no change is made to the 2019 export forecast. Skim-solids basis exports for 2018 are raised, primarily on stronger nonfat dry milk (NDM) and whey product shipments.
For 2018 and 2019, butter and whey price forecasts are raised from the previous month on expected demand strength, but the cheese price forecasts are lowered on continued large supplies. The NDM price forecast is unchanged. The Class III price is lowered for 2018; but for 2019, higher whey prices are expected to more than offset the declines in cheese prices, and the Class III price forecast is raised. The Class IV price is raised for both years due to higher forecast butter prices. The 2018 all milk price forecast is unchanged at the midpoint at $16.35 to $16.45 per cwt, and the 2019 price is raised to $16.85 to $17.75 per cwt.
The 2018/19 U.S. cotton supply and demand estimates show higher ending stocks, based on slightly larger production and lower exports relative to last month. Production is raised 81,000 bales, with higher production in Texas and Georgia largely offset by lower production in the Carolinas. Domestic mill use is unchanged from last month, but the export forecast is reduced 200,000 bales to 15.5 million, due to reduced world trade and consumption. Ending stocks are forecast at 5.0 million bales, and the resulting stocks-to-use ratio of 26 percent is slightly higher than the previous month’s forecast, and the highest since 2015/16. The forecast range for the marketing year average farm price is 69.0 to 77.0 cents per pound; the midpoint of 73.0 cents is down 2 cents from the previous month’s projection.
The 2018/19 global ending stocks forecast is lowered 4 percent this month as lower production and sharply lower beginning stocks offset marginally smaller consumption. Stocks are lowered mainly in India, as revisions are made to production, consumption, and loss over 2002/03-2013/14 to better reflect Indian government data (consumption) and the impact of shifting producers’ marketing patterns (see the October 2018 issue of the FAS Cotton: World Markets and Trade publication). Production forecasts are lowered for Australia, and raised for Greece and the United States. Consumption and imports are lowered for Turkey. Global beginning stocks are lowered 2.9 million bales and ending stocks are lowered 3.0 million bales. Ending stocks in 2018/19 are down 6.4 million bales from last year, largely reflecting an expected 8.2-million-bale decline in China.