USDA Crop Production & WASDE updates - July 12, 2017

NEBRASKA CROP PRODUCTION REPORT

Based on July 1 conditions, Nebraska's winter wheat production is forecast at 46.0 million bushels, down 35 percent from last year, according to the USDA's National Agricultural Statistics Service. Average yield is forecast at 46.0 bushels per acre, down 8.0 bushels from 2016. Area to be harvested for grain is estimated at 1.0 million acres, down 24 percent from a year ago.

Oat production is forecast at 1.38 million bushels, down 8 percent from last year. Average yield is forecast at 55.0 bushels per acre, down 5.0 bushels from 2016. Area to be harvested for grain is estimated at 25.0 thousand acres, unchanged from a year ago.



IOWA CROP PRODUCTION REPORT

Oat production in Iowa is forecast at 3.31 million bushels, up 1 percent from the 3.27 million bushels produced in 2016 according to the latest USDA National Agricultural Statistics Service - Crop Production report. Iowa oat growers intend to harvest 48,000 acres for grain, up 5,000 acres from last year. The expected yield is 69 bushels per acre, down 7 bushels from 2016.

The forecasts in this report are based on July 1 conditions and do not reflect weather effects since that time. The next crop production forecasts, based on conditions as of August 1, will be released on August 10.



USDA Crop Production Report:  Winter Wheat Production Up 2 Percent from June

Winter wheat production is forecast at 1.28 billion bushels, up 2 percent from the June 1 forecast but down 23 percent from 2016. Based on July 1 conditions, the United States yield is forecast at 49.7 bushels per acre, up 0.8 bushel from last month, but down 5.6 bushels from last year. If realized, this will be the second highest yield on record for the United States, behind only 2016. The area expected to be harvested for grain or seed totals 25.8 million acres, unchanged from the Acreage report released on June 30, 2017, but down 15 percent from last year.

Hard Red Winter production, at 758 million bushels, is up 2 percent from last month. Soft Red Winter, at 306 million bushels, is up 3 percent from the June forecast. White Winter, at 216 million bushels, is up 3 percent from last month. Of the White Winter production, 18.5 million bushels are Hard White and 198 million bushels are Soft White.

Durum wheat production is forecast at 57.5 million bushels, down 45 percent from 2016. The United States yield is forecast at 30.9 bushels per acre, down 13.1 bushels from last year. Expected area to be harvested for grain totals 1.86 million acres, unchanged from the Acreage report released on June 30, 2017, but 21 percent below 2016.

Other spring wheat production is forecast at 423 million bushels, down 21 percent from last year. Area harvested for grain is expected to total 10.5 million acres, unchanged from the Acreage report released on June 30, 2017, but down 7 percent from last year. The United States yield is forecast at 40.3 bushels per acre, down 6.9 bushels from last year. Of the total production, 385 million bushels are Hard Red Spring wheat, down 22 percent from last year.



WORLD AG SUPPLY  AND DEMAND ESTIMATES - JULY 12, 2017

 COARSE GRAINS: This month’s 2017/18 U.S. corn outlook is for larger supplies, greater feed and residual use, and higher ending stocks. Corn beginning stocks are raised 75 million bushels reflecting lower feed and residual use in 2016/17 based on indicated disappearance during the first three quarters of the marketing year in the June 30 Grain Stocks report. Corn production for 2017/18 is projected 190 million bushels higher based on increased planted and harvested areas from the June 30 Acreage report. The national average corn yield is unchanged at 170.7 bushels per acre. During June, harvested-area weighted precipitation for the major corn producing states was below normal but did not represent an extreme deviation from average (See Westcott and Jewison, Weather Effects on Expected Corn and Soybean Yields, USDA-ERS, FDS-13g-01, July 2013). For much of the crop the critical pollination period will be during middle and late July.

Projected feed and residual use for 2017/18 is raised 50 million bushels on a larger crop and lower expected prices. With other use categories unchanged, corn ending stocks are raised 215 million bushels from last month. Small revisions are made to historical trade and utilization estimates based on the 13th month trade data revisions from the Census Bureau. The season-average corn price received by producers is lowered 10 cents at the midpoint for a range of $2.90 to $3.70 per bushel with the larger carryout.

Oat production is lowered 13 million bushels and barley production is reduced 16 million reflecting area adjustments in the Acreage report and higher barley and lower oat yields in today’s Crop Production. Sorghum production is raised based on the higher area reported in the Acreage report.

This month’s 2017/18 foreign coarse grain outlook is for higher production, reduced trade and increased stocks relative to last month. EU corn production is down reflecting a lower projection for Spain, where heat and dryness during grain fill hurt yield prospects. Historical revisions are made to Kenya’s corn production estimates to better reflect statistics published by the government. Barley production is lowered for Argentina, the EU, and Ukraine, but raised for Turkey and Russia. For 2016/17, Argentina corn production is raised based on the latest information indicating a higher-than-expected level of area. Major global trade changes for 2017/18 include lower barley exports for Argentina and reduced corn exports for the EU and Tanzania. Foreign corn ending stocks are raised from last month, with the largest increases primarily for Vietnam, Mexico, and Argentina.

OILSEEDS: U.S. oilseed production for 2017/18 is projected at 127.0 million tons, up 0.2 million from last month, with increases for soybeans, canola, and peanuts only partly offset with a lower forecast for sunflowerseed and cottonseed. Soybean production is projected at 4,260 million bushels, up 5 million on increased harvested area. Harvested area, estimated at 88.7 million acres in the June 30 Acreage report, is up 0.1 million from last month. The soybean yield forecast is unchanged at 48.0 bushels per acre. Despite slightly higher production, 2017/18 soybean supplies are reduced 35 million bushels on lower beginning stocks. With projections for exports and crush unchanged, 2017/18 soybean ending stocks are reduced 35 million bushels to 465 million.

Soybean exports for 2016/17 are projected at 2,100 million bushels, up 50 million, reflecting shipments and outstanding sales through early July. Soybean crush is reduced 10 million bushels to 1,900 million on lower projected soybean meal exports and domestic use. Soybean ending stocks for 2016/17 are projected at 410 million bushels, down 40 million from last month.

The U.S. season-average soybean price is forecast at $8.40 to $10.40 per bushel, up $0.10 at the midpoint. Soybean meal prices are forecast at $300 to $340 per short ton, up $5.00 at the midpoint. The soybean oil price forecast is unchanged at 30 to 34 cents per pound.

The 2017/18 global oilseed supply and demand forecasts include higher production, exports, and stocks compared to last month. Global oilseed production for 2017/18 is projected at 573.9 million tons, up 0.9 million mostly on higher forecasts for Ukraine sunflowerseed, India cottonseed, U.S. peanuts, and China soybeans. Partly offsetting is lower rapeseed production for Australia. Ukraine sunflowerseed harvested area is raised in line with revisions for 2016/17, resulting in a higher production forecast. Soybean production is raised for China due to increased harvested area.
Global oilseed exports for 2017/18 are projected at 172.9 million tons, up 0.6 million mainly reflecting increased soybean exports for Brazil and Ukraine. Soybean exports are also raised for 2016/17 as higher exports for the United States and Paraguay are partly offset by lower exports for Brazil and Argentina. Global soybean imports are forecast higher principally for China where imports are projected up 2 million tons to 91 million in 2016/17 and 1 million tons to 94 million in 2017/18. Global oilseed ending stocks for 2017/18 are up 1.0 million tons to 104.5 million mostly on higher soybean stocks in China and South America.

WHEAT: Projected 2017/18 U.S. wheat supplies are lowered this month on reduced U.S. wheat production more than offsetting higher beginning stocks and imports. Forecast 2017/18 U.S. wheat production is lowered 64 million bushels to 1,760 million. The NASS July Crop Production report provides survey-based production forecasts for all wheat classes for the first time in the 2017/18 crop year. The production forecasts for durum and other spring wheat indicated a significant decline compared to last year for these two classes primarily due to severe drought conditions affecting the Northern Plains. Partially offsetting this decrease is higher winter wheat production on both higher harvested acreage and yield. Projected exports and feed and residual usage are lowered to 975 and 150 million bushels, respectively, largely on the reduction in durum and other spring wheat supplies. Projected 2017/18 ending stocks are raised 14 million bushels to 938 million this month, but are 21 percent lower than last year’s revised stocks. The 2017/18 season-average farm price is raised $0.50 per bushel at the midpoint to a projected range of $4.40 to $5.20.

Global 2017/18 wheat supplies are decreased fractionally on lower production forecasts for the U.S., Australia, China, and the EU, which are partially offset by higher production expected for Russia and Turkey. Russia’s wheat production is increased by 3.0 million tons to 72.0 million as growing conditions to date are similar to last year when Russia achieved record yields. Turkey’s wheat production is up 1.5 million tons to 19.5 million on favorable crop conditions. European Union wheat production is down 0.8 million tons to 150.0 million on smaller expected crops in Spain and France. Australia’s 2017/18 production is reduced 1.5 million tons to 23.5 million on dry conditions.

Foreign 2017/18 exports are increased on higher exports for Russia and Turkey more than offsetting reductions for the EU, Paraguay, and Ukraine. Imports are projected lower for several countries with Turkey showing the largest reduction on a significantly larger crop. Total world consumption is projected higher, primarily on greater use by Russia on increased supplies. Global ending stocks are projected lower at 260.6 million tons, down marginally from last month.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2017 red meat and poultry production is raised from last month as higher forecast beef and broiler production more than offset declines in pork and turkey production. The beef production forecast is raised on both higher cattle slaughter and heavier carcass weights. Forecast pork production is reduced as lower slaughter in mid-2017 more than offsets higher fourth-quarter slaughter. Second-half carcass weights are reduced. Broiler production is raised slightly on recent production data. Turkey production is lowered on recent production data and a slow recovery in demand during the second half of the year. Egg production is unchanged.

For 2018, red meat and poultry production forecasts are reduced. Forecast beef production is reduced from the previous month on lower expected steer and heifer slaughter in the first part of the year. The pork production forecast is reduced. USDA’s Quarterly Hogs and Pigs report indicated that producers intend to farrow slightly more hogs over the next two quarters and growth in pigs per litter is expected to remain modest. Forecast turkey production is reduced from last month as current price weakness is expected to slow the pace of growth. Broiler and egg production forecasts are unchanged.

The beef import forecast is raised for 2017 on recent trade data. The beef export forecast is raised as global demand is expected to strengthen during the second half of the year. For 2018, both beef import and export forecasts are raised. Pork, poultry, and egg trade forecasts for 2017 and 2018 are unchanged from the previous month.

Cattle price forecasts for 2017 are lowered from last month as prices have weakened and fed cattle supplies will remain ample. Forecast 2018 cattle prices are unchanged. Hog price forecasts are raised for 2017 on strong domestic and export demand. Demand strength is expected to carry over into 2018, and forecast hog prices are raised. Broiler prices are raised for 2017 on current price strength, while turkey prices are lowered on weak demand. No changes are made for 2018 broiler and turkey price forecasts. Egg prices are raised slightly for 2017 on recent data but no changes are made to 2018 forecasts.

The 2017 and 2018 milk production forecasts are lowered from last month. Growth in milk per cow has been slower than expected, and the forecast growth rate is reduced.

Fat basis import forecasts for 2017 and 2018 are unchanged from the previous month. Fat-basis export forecasts for 2017 and 2018 are raised on continued robust exports of cheese. On a skim-solids basis, imports for 2017 were reduced from the previous month on lower expected purchases of milk protein concentrates (MPC), but the 2018 import forecast remains unchanged. The 2018 skim solids import forecast remains unchanged. Skim-solid exports for 2017 and 2018 are raised as nonfat dry milk (NDM) and cheese shipments are expected to remain strong.

For 2017, cheese and whey price forecasts are reduced from the previous month, while butter prices are forecast higher. The NDM price forecast is unchanged but the range is narrowed. Cheese prices for 2018 are reduced while butter prices are raised on continued strong demand. NDM and whey price forecasts for 2018 are unchanged from last month. The 2017 and 2018 Class III price forecasts are lowered from last month in line with lower component product prices. The Class IV price forecasts are increased for 2017 and 2018 reflecting higher butter prices. The 2017 all milk price is forecast at $17.65 to $17.95 and the price for 2018 is $18.00 to $19.00 per cwt.