Sept 11 2014 USDA WASDE Report

World Agricultural Supply and Demand Estimates   
World Agricultural Outlook Board - September 11, 2014

COARSE GRAINS:  Projected 2014/15 U.S. feed grain supplies are raised this month with higher forecast corn production.  Corn production for 2014/15 is forecast 363 million bushels higher at a record 14,395 million bushels.  The corn yield forecast is raised 4.3 bushels per acre to a record 171.7 bushels.  Corn supplies for 2014/15 are projected at 15,607 million bushels, up 826 million bushels from the previous record in 2013/14. 

Total 2014/15 corn usage is projected at 13,605 million bushels, up 170 million from last month.  Although a record, usage is expected up just 5 million bushels from 2013/14 as export prospects remain constrained by large foreign carryin stocks.  Feed and residual use for 2014/15 is projected 75 million bushels higher this month with the larger crop and lower prices.  Projected food, seed, and industrial use is raised 70 million bushels with increases expected for both ethanol and sweeteners.  Increases are supported by the reduced corn price outlook and higher production of these corn-based products in recent months.  Corn exports are projected 25 million bushels higher with lower prices and reduced competition expected from South America later in the marketing year.  Projected U.S. corn ending stocks are raised 194 million bushels to 2,002 million and would be the highest since 2004/05.  The projected season-average corn farm price is lowered 40 cents at the midpoint to $3.20 to $3.80 per bushel.

Other notable supply and use changes this month include higher projected sorghum exports for both 2013/14 and 2014/15 and an increase in expected barley imports.  The 2014/15 season-average farm price for sorghum is projected 35 cents lower at the midpoint to $3.00 to $3.60 per bushel, but the price outlooks for barley and oats are raised reflecting higher-than-expected prices for malting barley and oats reported during the summer months of their June-May marketing year.

Global coarse grain supplies for 2014/15 are projected 4.0 million tons higher, despite a 7.9-million-ton reduction in foreign coarse grain production.  In addition to the higher forecast U.S. corn production, higher foreign beginning stocks also offset the reduction in foreign output.  Most of the increase in beginning stocks reflects lower 2013/14 EU corn and barley use and higher corn imports.  Adding to available EU grain supplies for 2014/15 is a combined increase of 2.1 million tons in corn and barley output.  Brazil corn production is also raised 1.0 million tons for 2014/15 with a month-to-month increase in expected area reflecting the higher area and production reported for 2013/14.  Serbia corn production is raised 0.3 million tons for 2014/15.

Corn production for 2014/15 is reduced elsewhere with the largest reduction for China where output is expected down 5 million tons based on persistent summer dryness in key growing areas of the North China Plain and Northeast.  Argentina corn production is lowered 3.0 million tons for 2014/15 with lower expected plantings, but higher reported yields boost 2013/14 production 1.0 million tons.  Hot, dry conditions in Ukraine and Russia reduce 2014/15 corn production prospects by 1.0 million tons and 0.5 million tons, respectively.  Other coarse grain production changes for 2014/15 include a 0.6-million-ton reduction in Argentina sorghum and a 0.5-million-ton reduction in Argentina barley.  Barley production is also reduced for Algeria, Australia, and Azerbaijan.  A 0.8-million-ton increase in Ukraine barley and a 0.2-million-ton increase in Canada barley, combined with the higher EU output, boost global barley production 0.5 million tons.

Global coarse grain consumption for 2014/15 is raised 2.3 million tons as higher U.S. consumption is partly offset by a reduction in foreign corn use.  Higher expected corn exports for the United States, EU, and Serbia mostly offset an expected reduction for Argentina.  Higher 2013/14 Argentina and Brazil local marketing-year (March 2014-February 2015) exports are expected to limit opportunities for U.S. exports during the early months of the 2014/15 U.S. marketing year (September-August); however, lower year-to-year 2014/15 production and exports for Argentina and Brazil are expected to reduce competition for U.S. shipments during the second half of the 2014/15 September-August marketing year.  Global corn ending stocks for 2014/15 are projected 2.1 million tons higher with reductions for China, Argentina, and Russia more than offset by the larger stocks for the United States and Brazil.
 
OILSEEDS:  U.S. oilseed production for 2014/15 is projected at 116.2 million tons, up 2.5 million from last month.  Higher soybean production is only partly offset by reductions for peanuts and cottonseed.  Soybean production is projected at a record 3,913 million bushels, up 97 million due to a higher yield forecast.  Soybean exports are raised 25 million bushels to 1,700 million mainly due to increased supplies.  Soybean crush is raised 15 million bushels to a record 1,770 million mostly on increased soybean meal exports, which are raised on record high new-crop export sales.  Domestic use of soybean meal is raised in line with a small increase for 2013/14.  Soybean ending stocks are projected at 475 million bushels which would be the highest since 2006/07.

Changes for 2013/14 include higher soybean exports and crush and reduced ending stocks.  Exports are increased 5 million bushels to a record 1,645 million based on reported trade through July and indications from August export inspections.  Crush is increased 5 million bushels to 1,730 million.  Ending stocks are projected at 130 million bushels, down 10 million from last month.  Other changes for 2013/14 include increased soybean meal imports and domestic disappearance, lower soybean meal exports, and increased soybean oil exports.

Soybean and product prices are all projected lower for 2014/15.  The U.S. season-average soybean price is projected at $9.00 to $11.00 per bushel, down 35 cents on both ends of the range.  Soybean meal prices are projected at $330 to $370 per short ton, down $10.00 on both ends of the range.  Soybean oil prices are projected at 34 to 38 cents per pound, down 1 cent on both ends of the range.

Global oilseed production for 2014/15 is projected at a record 528.0 million tons, up 6.2 million from last month.  Soybeans account for most of the change.  In addition to the United States, projected soybean production is increased for Brazil and Argentina where relative prices favor soybeans over corn.  Brazil soybean production is raised 3 million tons to 94 million and Argentina is raised 1 million tons to 55 million.  Rapeseed production is raised for the EU reflecting exceptional weather across much of the northern producing areas.  Mostly offsetting gains for the EU, rapeseed production for Canada is reduced to reflect lower yields reported by Statistics Canada.  Other changes include higher sunflowerseed production for the EU, lower sunflowerseed production for Argentina and Bolivia, lower peanut production for China and India, higher India cottonseed production, and increased palm oil production for Malaysia.

Global oilseed trade for 2014/15 is raised 1.8 million tons to 134.0 million mainly reflecting soybean exports for the United States and Brazil.  Soybean imports are raised 1 million tons for China to 74 million and for several other countries including the EU, Japan, and Vietnam.  Global oilseed crush is projected higher on increased supplies and lower prices.  Global oilseed stocks are projected higher mainly on higher soybean stocks in Argentina, Brazil, the United States, and China.

WHEAT:  Projected U.S. wheat supplies for 2014/15 are raised 10 million bushels with higher expected imports of Hard Red Spring (HRS) from Canada.  This reflects higher stocks in Canada as well as the strong shipment pace to date.  Domestic use is unchanged, but exports are lowered 25 million bushels with larger global wheat supplies and increased competition.  Hard Red Winter (HRW) wheat exports are lowered 15 million bushels due to the slow pace of sales and shipments to date.  HRS wheat exports are lowered 10 million bushels with increased competition expected from Canada.  A 5-million-bushel increase in Soft Red Winter wheat exports is offset by a 5-million-bushel reduction for White wheat.  Projected all wheat ending stocks are raised 35 million bushels.  The projected range for the 2014/15 season-average farm price is lowered 40 cents at the midpoint to $5.50 to $6.30 per bushel. 

Global 2014/15 wheat supplies are raised 6.6 million tons with increases in both beginning stocks and production.  Beginning stocks are up 2.8 million tons led by a 2-million-ton increase for China.  The China increase reflects a 2013/14 reduction in wheat feeding; however, wheat feeding is raised for 2014/15.  Both changes are made to better reflect relative prices for wheat and corn in China since summer 2013.  Canada beginning stocks are up 0.8 million tons reflecting the latest stocks estimate from Statistics Canada.  World production is raised 3.9 million tons to a record 720.0 million.  The largest production increases are for EU and Ukraine, up 3.1 million tons and 2.0 million tons, respectively.  Both changes reflect updated government data.  Australia production is down 0.5 million tons reflecting persistent dryness in the northeastern growing areas and developing dryness in the more important western and southeastern growing regions.  Other major production changes include a 0.4-million-ton increase for Morocco and a 1-million-ton reduction for Algeria.

Global wheat consumption for 2014/15 is raised 3.2 million tons mostly reflecting the higher feed use expected for China.  Wheat feeding is also raised 0.5 million tons for Iran.  Global wheat trade is raised with the largest import increases for Algeria, Pakistan, and Iran.  Exports are raised 1.0 million tons each for Canada, EU, and Ukraine all due to larger supplies.  Exports are raised 0.5 million tons each for Brazil and Kazakhstan also because of large supplies.  Despite record projected consumption, global wheat supplies rise faster than use, boosting ending stocks 3.4 million tons to 196.4 million.



LIVESTOCK, POULTRY, AND DAIRY:  
The forecasts for total meat production in 2014 and 2015 are reduced from last month.  For 2014, beef production is down as supplies of cattle coming out of feedlots have been below expectations.  However, this is partly offset by higher expected dressed weights as lower feed costs and reduced heifer and cow slaughter boost weights.  Pork production is marginally lower as higher dressed weights are more than offset by a reduction in slaughter.  USDA will release the Quarterly Hogs and Pigs report on September 26, providing an estimate of farrowing intentions into early 2015.  Broiler production is increased as hatchery data shows stronger increases in the number of eggs set and chicks placed.  Turkey production is slightly higher based on production data to date.  Egg production reflects actual data for the second quarter, but no changes are made to the forecasts.  For 2015, beef production is cut as lower placements of cattle in the second half of 2014 are expected to reduce supplies of fed cattle in 2015 despite heavier carcass weights.  Pork production is higher on heavier dressed weights.  Broiler production is raised as expected favorable returns support further expansion by producers.  The egg production forecast is increased.

Forecasts for 2014 and 2015 beef imports are higher due to tight cull cow supplies and strong consumer demand for processing grade beef.  Beef exports for 2014 and 2015 are unchanged.  Pork trade is unchanged for 2014 and 2015.  Broiler exports are unchanged for 2014, but the 2015 forecast is raised as greater supplies and lower prices boost exports.  Turkey export forecasts are raised for 2014 and 2015.  

The cattle price forecast for 2014 is raised from last month on tightness in supplies of fed cattle.  The price forecast for 2015 is unchanged.  Hog price forecasts for 2014 and 2015 are lowered from last month as recent lower price levels are expected to carry into next year.  Broiler price forecasts for 2014 and 2015 are lowered as supplies increase.  The turkey price forecast for 2014 is raised based on recent price data, with the forecast for 2015 unchanged.  Egg price forecasts for 2014 and 2015 are virtually unchanged. 

The milk production forecast for 2014 is raised on growth in output per cow, but the forecast for 2015 is unchanged.  Export forecasts for 2014 and 2015 are lowered as higher forecast U.S. prices for butter and cheese make those products less competitive in world markets and sales of a number of other dairy products are limited as well.  Skim-solids and fat-basis imports are raised for both 2014 and 2015 as supplies in competing exporters are expected to be large while U.S. prices remain relatively high. 

Butter and cheese price forecasts are raised for 2014 with strength in both expected to continue into the first part of 2015.  Nonfat dry milk prices are forecast lower in 2014 and 2015.  The forecast whey price is unchanged for 2014 but is lowered fractionally for 2015.  Class III prices for 2014 and 2015 are raised.  The Class IV price is higher in 2014 but reduced in 2015.  The all milk price is raised to $23.80 to $24.00 per cwt for 2014, and is lowered for 2015 to $19.40 to $20.40 per cwt.