DECEMBER 09 2015 WORLD AG SUPPLY AND DEMAND ESTIMATES

COARSE GRAINS: Projected U.S. feed grain ending stocks for 2015/16 are raised slightly this month. U.S. corn use for ethanol production in 2015/16 is projected 25 million bushels higher based on the stronger-than-expected pace of ethanol production during November as indicated by weekly data from the Energy Information Administration (EIA). EIA also raised its forecasts for 2015 and 2016 gasoline consumption in the December Short-term Energy Outlook. Corn exports for 2015/16 are projected 50 million bushels lower, reflecting the slow pace of sales and shipments to date and higher projected exports for Brazil and Canada. U.S. corn ending stocks are projected 25 million bushels higher at 1,785 million bushels. The projected range for the season-average corn farm price is unchanged at $3.35 to $3.95 per bushel, in line with prices reported to date and current futures price levels. The sorghum farm price range is lowered 10 cents on each end to $3.20 to $3.80 per bushel, reflecting the latest reported prices through October and continued weakness in interior cash sorghum bids.

Global coarse grain supplies for 2015/16 are projected lower this month with global corn production lowered 1.0 million tons. Corn production is lowered 1.5 million tons for India with reduced area and yield prospects as a result of limited monsoon rainfall. South Africa corn production is lowered 0.8 million tons as October and November dryness has significantly delayed plantings in the higher-yielding eastern growing areas, thus reducing yield prospects. Partly offsetting these reductions is a 1.3-million-ton increase for Canada corn based on the latest official production estimates from Statistics Canada. Other coarse grain production changes for 2015/16 are mostly offsetting with lower Argentina sorghum, Chile oats, and Australia barley output offset by higher Canada barley and India millet production.

Global coarse grain consumption for 2015/16 is lowered slightly. Global corn consumption is lowered 1.0 million tons mostly reflecting lower use in India and Taiwan. Corn use is increased for EU and Chile. Global barley consumption is raised with increases for EU and Canada. Millet consumption is higher for India with a larger crop, but oats consumption declines for Chile with a smaller crop. World corn trade for 2015/16 is lowered with imports reduced for Canada and Taiwan. Corn exports are lowered for the United States, India, and South Africa, but raised for Canada. Brazil corn exports for 2014/15 (March 2015 through February 2016) are raised 1.0 million tons to a record 32.0 million putting additional pressure on 2015/16 U.S. corn exports (September 2015 through August 2016). Global corn ending stocks for 2015/16 are nearly unchanged with higher projected stocks for the United States and Canada offset by lower projected stocks for Brazil and EU.

OILSEEDS: Total U.S. oilseed production for 2015/16 is forecast at 117.7 million tons, down slightly due to a small reduction in cottonseed. Soybean supply and use projections for 2015/16 are unchanged from last month. Soybean ending stocks are unchanged at 465 million bushels which, if realized, would be the highest since 2006/07. Soybean oil used for methyl ester is raised 200 million pounds for 2015/16 reflecting the recent Environmental Protection Agency announcement of the biodiesel mandate for 2016.

The U.S. season-average soybean price for 2015/16 is forecast at $8.15 to $9.65 per bushel, unchanged from last month. Soybean meal is forecast at $290 to $330 per short ton, down 10 dollars on both ends of the range. Soybean oil is forecast at 28.5 to 31.5 cents per pound, up 1 cent on both ends.

Global oilseed production for 2015/16 is projected at 529.0 million tons, down 2.0 million tons with foreign oilseeds accounting for most of the change. Global soybean production is projected at 320.1 million tons, down 0.9 million. The India soybean crop is reduced 1.5 million tons to 8.0 million on lower yields resulting from inconsistent rainfall during the growing season and lateseason heat. Larger projections for Canada, Russia, and Ukraine partly offset the reduction for India. Global rapeseed production is projected at 67.5 million tons, up 0.5 million with a larger crop in Canada only partly offset by a lower forecast for India. Canada rapeseed production is raised 1.7 million tons to 17.2 million based on the latest survey results from Statistics Canada. The India crop is reduced on lower projected area, reflecting planting progress to date. Palm oil production is reduced for Indonesia and Malaysia for 2015/16 reflecting unusually dry conditions from June through October 2015. The Indonesia crop is reduced 2.0 million tons to 33.0 million and the Malaysia crop is reduced 0.5 million tons to 20.5 million. Other changes include reduced cottonseed production for China and Pakistan.

Global oilseed trade for 2015/16 is projected at 147.7 million tons, up 0.7 million from last month. Soybean exports account for most of the change with higher projections for Argentina, Serbia, and Ukraine. Soybean imports are raised for Pakistan, Taiwan, and Iran. Rapeseed exports are also higher with an increase for Canada only partly offset by a lower projection for Australia. Global oilseed crush is projected lower primarily on reduced rapeseed and soybean crush for India. For Pakistan, increased soybean crush partly offsets lower rapeseed and cottonseed crush. Global oilseed ending stocks are projected at 95.1 million tons, up 1.0 million mainly reflecting increased rapeseed stocks in Canada. Global vegetable oil stocks are projected at 16.1 million tons, down 2.3 million mainly on lower palm oil stocks in Indonesia, Malaysia, and India.

WHEAT: No changes are made to the U.S. all wheat balance sheet this month. By-class, the only changes are a 10-million-bushel increase in 2015/16 Hard Red Winter exports that is offset by a 10-million-reduction in Hard Red Spring exports.

Global wheat supplies for 2015/16 are raised 2.3 million tons primarily on increased production but also higher beginning stocks. World wheat production remains record high and is raised 1.9 million tons to 734.9 million. The primary production change is for Canada, which is raised 1.6 million tons to 27.6 million on a Statistics Canada report.

Global wheat trade for 2015/16 is raised with exports up 1.3 million tons on larger supplies, expected policy changes in Argentina, and stronger demand in several importing countries. Exports are raised 1.0 million tons for Argentina, and 0.5 million tons each for Canada and Ukraine. The Argentina change is based on the expectation that the new government will reduce export restrictions. The Canada change is on a larger crop as well as a strong pace to date. The Ukraine change is also on a fast pace as well as strong feed wheat demand in Southeast Asia.

Partially offsetting is a 1.0-million-ton reduction for EU exports on a slow pace of licenses and competition, especially from Black Sea origins. The largest import increases are 0.4 million tons for Ethiopia on expectations of additional tenders in response to emergency food needs, and 0.3 million tons each for Indonesia and Thailand on increased feed wheat purchases.

Total world wheat consumption for 2015/16 is down 0.2 million tons. The biggest change is a 1.0-million-ton decrease in EU wheat feeding that is mostly offset by increased consumption in several other countries, notably 0.3 million-ton-increases each for Indonesia and Thailand feeding. Global ending stocks are projected 2.6 million tons higher with large increases for the EU and Canada partially offset by decreases for Argentina and Ukraine.

LIVESTOCK, POULTRY, AND DAIRY: The forecasts for total meat production in 2015 and 2016 are reduced from last month. Beef production is lowered for 2015 due to a slower pace of fed cattle marketings and consequently, lower steer and heifer slaughter. However, as the pace of marketings is slower, carcass weights are expected to be heavier, providing a slight counterbalance to lower slaughter. For 2016, lower expected cattle placements during late 2015 will result in lower slaughter and beef production in mid-2016. However, there is a slight offset from higher expected carcass weights early in the year. Pork production is raised for 2015 on the pace of slaughter in November and early December. No change is made to 2016. USDA will release its Quarterly Hogs and Pigs report on December 23, providing an indication of producers’ hog production intentions into 2016. Broiler production is lowered for both 2015 and 2016 as hatchery data points to slower growth in broiler production. Egg production is lowered in 2015 based on recent production data, but hatchery data supports a slightly higher production forecast for early 2016.

Beef imports for 2015 and 2016 are reduced to reflect the pace to date and weakening prices for processing beef. Beef exports for 2015 and 2016 are unchanged. Pork imports are unchanged but export forecasts for 2015 and 2016 are reduced as the strength of the dollar is limiting export competitiveness. Broiler and turkey exports for 2015 and 2016 are unchanged from last month. Cattle and hog prices for 2015 are lowered from last month. A combination of weaker-thanexpected packer demand and relatively large supplies of cattle and hogs are expected to pressure prices. Cattle prices are reduced for all of 2016 and hog prices are lowered for early 2016. Broiler prices are raised for 2015 on current price movements, but are unchanged for 2016. Turkey prices for 2015 are reduced on current prices, but are unchanged for 2016. Egg prices are lowered for the end of 2015 and into early 2016, reflecting recent price movements.

The milk production forecasts for 2015 and 2016 are reduced from last month as growth in milk per cow in 2015 and 2016 is slowed. Fat basis imports are reduced for 2015 on slower butter imports; on a skim-solids basis, imports are unchanged. No change is made to 2016 imports.

Fat basis exports are unchanged for 2015 but are lowered for 2016 as global supplies of dairy products are expected to remain large and sales of cheese are expected to be pressured. On a skim-solids basis, exports are lowered for 2015 as lactose and whey protein concentrates sales to date are limiting exports, and weaker expected sales of cheese and lactose in 2016 will dampen skim-solids export growth in 2016.

Butter prices for remainder of 2015 and early 2016 are raised as prices have remained stronger than expected into early December. Cheese prices are lowered slightly for 2015 and 2016 based on current price movements and expected larger domestic supplies. The nonfat dry milk (NDM) prices are reduced for 2015 and 2016 as domestic and international supplies are expected to pressure prices. Whey prices are unchanged from last month. Class III prices are unchanged for 2015 and 2016 as the cheese price change was small. Class IV prices are raised for 2015 due to the stronger forecast butter price which more than offsets the lower NDM price. The 2016 Class IV price is lowered as the NDM price forecast is reduced. The all milk price is raised to $17.05 to $17.15 per cwt for 2015 and lowered to $15.95 to $16.75 per cwt for 2016.