WASDE Increases Corn Exports by 50 Million Bu.

World Agricultural Supply and Demand Estimate From USDA: 

WHEAT:  The supply and demand outlook for 2020/21 U.S. wheat is largely unchanged this month but there are offsetting by-class changes to exports, imports, and food use.  Hard Red Spring (HRS) and White exports are raised on stronger than expected sales and shipments, particularly to China.  Conversely, Hard Red Winter (HRW) exports are reduced on a continued slow pace.  Durum imports are raised on the pace to date while HRS is lowered.  Durum and HRS food use are raised while HRW and Soft Red Winter are lowered.  These changes are mainly based on the NASS Flour Millings Products report and Census trade data.  The season-average farm price is raised $0.15 per bushel to $5.00 based on NASS prices reported to date and expectations for futures and cash prices for the remainder of the marketing year.

The 2020/21 global wheat outlook is for greater supplies, increased consumption, higher exports, and reduced stocks.  Supplies are raised 0.8 million tons to 1,073.5 million.  Global production is increased to a record 773.4 million tons as higher production in Kazakhstan more than offsets reduced production in Pakistan and Argentina.  World 2020/21 consumption is increased 9.8 million tons to 769.3 million, mostly on higher feed and residual use for China and increased food, seed, and industrial (FSI) use for India.  China’s 2020/21 feed and residual use is raised to a record 30.0 million tons, surpassing the previous 2012/13 record of 26.0 million.  China’s domestic corn prices continue to be at a premium to wheat, encouraging greater wheat feed use.  Additionally, increased auction volumes of old-crop stocks in China have expanded the availability of feed-quality wheat.  India’s FSI is raised 3.5 million tons to a record 96.5 million as government stocks data indicate greater disappearance than previously estimated.  This is likely the result of the inclusion of wheat products in India’s government food assistance programs to address economic disruptions caused by COVID-19.

Projected 2020/21 global trade is raised 1.1 million tons to 194.8 million tons as higher exports for the EU-27+UK and Kazakhstan more than offset lower exports for Argentina.  EU-27+UK exports are raised on a strong export pace and improved price competitiveness with Russia.  Kazakhstan exports are increased on its pace to date and greater exportable supplies.  Argentina’s are lowered on reduced supplies and a slow export pace to date.  The largest import change this month is for China, where imports are raised to 10.0 million tons on a continued robust pace.  Projected 2020/21 world ending stocks are lowered 9.0 million tons to 304.2 million with most of the reductions due to increased consumption for China and India.  However, global stocks remain record high with China and India holding 51 and 9 percent of the total, respectively.

COARSE GRAINS:  This month’s 2020/21 U.S. corn outlook is for higher exports and lower ending stocks.  Exports are raised 50 million bushels, reflecting historically large corn purchases by China. With no other use changes, U.S. corn ending stocks are lowered 50 million bushels from last month.  The season-average corn price received by producers is raised 10 cents to $4.30 per bushel.

Global coarse grain production for 2020/21 is projected marginally higher to 1,438.9 million tons.  This month’s foreign coarse grain outlook is for higher production, lower consumption, and greater ending stocks relative to last month.  Foreign corn production is up fractionally, with an increase for South Africa more than offsetting a reduction for Paraguay.  For South Africa, production is raised based on higher indicated area.  For Brazil, the corn production forecast is unchanged as greater area is offset by a reduction in yield.  Slow second-crop planting progress in the Center-West dampens yield prospects but very favorable prices boost area expectations.

Major global trade changes for 2020/21 include higher projected corn exports for the United States, India, and South Africa.  For 2019/20, Argentina and Brazil corn exports are raised for the local marketing year ending February 2021 based on larger-than-expected late-season shipments.  Corn imports for 2020/21 are increased for China, with partly offsetting reductions for the EU-27+UK, South Korea, Japan, India, Saudi Arabia, and Turkey.  China’s barley and sorghum imports are also higher this month, bringing total coarse grain imports to 40.3 million tons.  Foreign corn ending stocks for 2020/21 are up relative to last month, mostly reflecting increases for China, South Africa, and Mexico that are partly offset by reductions for Argentina and Brazil.  Global corn ending stocks, at 286.5 million tons, are up 2.7 million from last month.

RICE:  The outlook for 2020/21 U.S. rice this month is for stable supplies and domestic use, lower exports, and higher ending stocks.  Exports are lowered by 1.0 million cwt to 93.0 million, all for long-grain on the continued sluggish pace of sales and shipments for long-grain milled rice.  Projected 2020/21 all rice ending stocks are raised by an equivalent amount to 39.4 million cwt.  The projected 2020/21 all rice season-average farm price is raised $0.20 per cwt to $13.40 with increases in the NASS prices reported to date and price expectations for the remainder of the marketing year.

The 2020/21 global outlook is for larger supplies, higher consumption, increased trade, and reduced stocks.  Rice supplies are raised 0.8 million tons to 682.3 million, primarily on higher rice production for Indonesia, Sri Lanka, and the Philippines as global production is raised to a record high 504.0 million.  World 2020/21 consumption is increased 2.2 million tons to a record 504.2 million.  The largest increase is for China, where more old-crop rice is expected to be fed due to rising domestic corn prices.

World trade is raised 0.9 million tons to 46.3 million as higher exports by India more than offset reduced exports by Thailand.  India’s exports are increased to a record 15.0 million tons as its supplies remain ample and its export prices continue to be the most competitive among major exporters.  Projected 2020/21 world ending stocks are lowered 1.4 million tons to 178.1 million, primarily on higher domestic use for China and larger exports for India.

OILSEEDS:  This month’s 2020/21 U.S. soybean outlook is for increased exports and lower ending stocks.  Soybean exports are projected at 2.25 billion bushels, up 20 million from last month reflecting record marketing-year exports through January and a slow start to Brazil’s export season resulting from harvest delays.  With crush unchanged, soybean ending stocks are reduced 20 million bushels to 120 million.  If realized, soybean ending stocks would be down 77 percent from 2019/20, and the lowest since 2013/14.

The U.S. season-average soybean price for 2020/21 is forecast at $11.15 per bushel, unchanged from last month.  The soybean meal price is forecast at $400.00 per short ton, up 10 dollars.  The soybean oil price forecast is raised 1.5 cents to 40.0 cents per pound.

Global 2020/21 soybean supply and demand forecasts include higher exports and lower ending stocks.  Global exports are raised 0.6 million tons to 169.7 million on higher exports from the United States and Russia.  Higher imports for Argentina are partially offset by reductions for the EU-27+UK, Canada, and Bangladesh.  Global soybean stocks are reduced 1.0 million tons to 83.4 million as lower stocks in the United States and Brazil more than offset higher stocks in Argentina.

SUGAR:  U.S. sugar supply for 2020/21 is increased 215,644 short tons, raw value (STRV) to 14.333 million on projected increases in production and imports.  Beet sugar production is increased 53,778 STRV to 5.046 million on a projected increase in national sucrose recovery to 15.126 percent.  Recoveries in all regions except the Upper Midwest are projected to be at historically high levels, pushing the national recovery projection 1.19 standard deviations above its 8-year average since 2012/13.  Although beet pile shrink has been a concern in most regions, processors’ data collected through January has yet to suggest an adjustment at this time.  Industry data indicate that crop year 2020/21 cane sugar production in Louisiana has set a record of 1.957 million STRV.  With adjustments made for production occurring in September, the fiscal year estimate is 1.931 million STRV.  The campaign was extended into January, resulting in record production for the month estimated at 197,000 STRV.  This amount is 44,850 STRV above the level projected in the WASDE last month.  Cane sugar production in Florida is increased by 65,000 STRV to 2.200 million on processors’ reporting of increased area harvested along with a smaller increase in cane yield.  Cane sugar production in Texas is reduced 7,984 STRV to 134,000 on a processor-reported drop off in late-season yields.  High-tier tariff imports are increased 60,000 STRV to 170,000.  The increase reflects the strong pace set in the first quarter of the fiscal year and oversubscribed imports of organic sugar beyond remaining tranche levels that are being stored in bonded warehouses.  There are no changes to use.  Ending stocks are projected residually at 1.993 million STRV, implying an ending stocks-to-use ratio of 16.15 percent.  After the publication of the sugar WASDE next month, the Commerce Department will determine a new export limit for sugar from Mexico.  That calculation will be set at the larger of (a) U.S. Needs as set out in the AD/CVD Suspension Agreement or (b) the export limit set by Commerce in December 2020 of 927,920 STRV.

SUGAR:  U.S. sugar supply for 2020/21 is increased 215,644 short tons, raw value (STRV) to 14.333 million on projected increases in production and imports.  Beet sugar production is increased 53,778 STRV to 5.046 million on a projected increase in national sucrose recovery to 15.126 percent.  Recoveries in all regions except the Upper Midwest are projected to be at historically high levels, pushing the national recovery projection 1.19 standard deviations above its 8-year average since 2012/13.  Although beet pile shrink has been a concern in most regions, processors’ data collected through January has yet to suggest an adjustment at this time.  Industry data indicate that crop year 2020/21 cane sugar production in Louisiana has set a record of 1.957 million STRV.  With adjustments made for production occurring in September, the fiscal year estimate is 1.931 million STRV.  The campaign was extended into January, resulting in record production for the month estimated at 197,000 STRV.  This amount is 44,850 STRV above the level projected in the WASDE last month.  Cane sugar production in Florida is increased by 65,000 STRV to 2.200 million on processors’ reporting of increased area harvested along with a smaller increase in cane yield.  Cane sugar production in Texas is reduced 7,984 STRV to 134,000 on a processor-reported drop off in late-season yields.  High-tier tariff imports are increased 60,000 STRV to 170,000.  The increase reflects the strong pace set in the first quarter of the fiscal year and oversubscribed imports of organic sugar beyond remaining tranche levels that are being stored in bonded warehouses.  There are no changes to use.  Ending stocks are projected residually at 1.993 million STRV, implying an ending stocks-to-use ratio of 16.15 percent.  After the publication of the sugar WASDE next month, the Commerce Department will determine a new export limit for sugar from Mexico.  That calculation will be set at the larger of (a) U.S. Needs as set out in the AD/CVD Suspension Agreement or (b) the export limit set by Commerce in December 2020 of 927,920 STRV.

LIVESTOCK, POULTRY, AND DAIRY:  Estimates of 2020 red meat, poultry, and egg production are adjusted to reflect December production data.  The 2021 forecast for total red meat and poultry production is raised from last month on higher forecast beef, pork, and broiler production.  The beef production forecast is raised from the previous month primarily on higher cattle slaughter and heavier-than-expected early-year cattle weights.  Pork production is raised on higher expected hog slaughter as well as heavier carcass weights in the first half of the year.  Broiler production is raised slightly from the previous month.  Production in the first quarter of the year is forecast higher on hatchery and preliminary slaughter data, but growth in second half production is slowed due to higher expected feed costs.  The turkey production forecast is unchanged.  Forecast egg production is reduced from last month as higher feed costs are expected to temper production growth.

Livestock, poultry, and egg trade estimates for 2020 are adjusted to reflect December trade data.  For 2021, the beef export forecast is raised on strong demand for U.S. beef in several markets.  The turkey export forecast is reduced from last month on slower international demand.  Pork, broiler, and egg export forecasts remain unchanged from last month.

Fed-cattle prices are lowered for the second half of the year on increased production, while the annual hog price forecast is raised from last month on expectations of firm demand.  Broiler and egg price forecasts are raised on current prices and expected slower growth of production later in the year.  Turkey prices are raised on stronger expected demand.

The 2020 milk production, trade, and stock estimates are adjusted to reflect December data.  For 2021, the milk production forecast is raised from last month, primarily on higher dairy cow numbers.  The 2021 fat basis import forecast is raised on higher expected imports of cheese and butterfat products, while exports are raised on higher shipments of butterfat.  On a skim-solids basis, the import forecast is unchanged while the export forecast is raised, reflecting expectations of strong international demand.

Annual product price forecasts for cheese and butter are lowered from the previous month on current prices, increased production, and larger stocks.  Nonfat dry milk (NDM) and whey price forecasts are raised from last month on firm demand.  The Class III price is reduced on the lower cheese price forecast and the Class IV price is also reduced, reflecting a lower butter price forecast.  The 2021 all milk price forecast is reduced to $17.15 per cwt.

COTTON:  The 2020/21 U.S. cotton supply and demand forecasts show slightly higher exports and lower ending stocks relative to last month.  Production and domestic mill use are unchanged.  The export forecast is raised 250,000 bales to 15.5 million based on a strong pace of shipments to date.  Ending stocks are now estimated at 4.3 million bales, equivalent to 24 percent of total disappearance.  The upland cotton marketing year average price received by producers is projected at 68 cents per pound, unchanged from January.

The 2020/21 world cotton forecasts include higher production, consumption, and imports, led by changes in China.  World production is projected 1.3 million bales higher this month, with China’s forecast raised by 1.5 million bales as the daily rates of both ginnings and inspections in Xinjiang continue to show unusual late-season strength.  Reports from China continue to suggest 2020/21 cotton area in Xinjiang was little changed from last year, but government classing data now indicates yields could be about 10 percent higher, while lower in Eastern China.  India’s production estimate is reduced 500,000 bales on increasing evidence of pest infestation, while Pakistan is 200,000 bales higher and Australia 100,000 bales higher.  World consumption is projected 1.5 million bales higher this month, with China’s forecast 1.0 million bales higher reflecting growing domestic textile demand and exports.  Much smaller increases are also included for India, Pakistan, Bangladesh, and Turkey, while the outlook this month is for lower consumption in Indonesia and Thailand.  World trade is projected 350,000 bales higher than last month, with imports 500,000 bales higher for China, and smaller, partially offsetting changes elsewhere.  World ending stocks are almost 600,000 bales lower this month, at 95.7 million bales, 3.2 million bales lower than in 2019/20.

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Tags: corn, USDA, WASDE, wheat, estimates