WASDE projects lowest soy ending stocks since 2014

WHEAT:  The outlook for 2020/21 U.S. wheat this month is for slightly smaller supplies, unchanged domestic use, higher exports, and lower ending stocks.  Supplies are reduced on lower imports, which are decreased 5 million bushels to 120 million on a slower-than-expected pace.  Exports are raised 10 million bushels to 985 million as higher white wheat exports are partially offset by lower Hard Red Winter (HRW) exports.  Sales and shipments of white wheat have been robust this marketing year to several East Asian countries.  Conversely, HRW exports have slowed for the past several weeks.  Projected 2020/21 ending stocks are reduced 15 million bushels to 862 million, down 16 percent from last year.  The season-average farm price is unchanged at $4.70 per bushel.

The 2020/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks.  Supplies are raised 1.2 million tons to 1,074.3 million on higher global production, which is now a new record at 773.7 million.  Most of this month’s production increase is for Australia, which is raised 1.5 million tons to 30.0 million.  This increase is partially based on the latest ABARES production forecast.  Russia’s production is raised 500,000 tons to 84.0 million with the harvest results now complete.  Canada’s wheat production is raised 0.2 million tons to 35.2 million on the final Statistics Canada estimate for the 2020/21 crop year.  With this month’s production changes, Australia, Canada, and Russia all have their second largest wheat production on record.

World 2020/21 consumption is increased 5.1 million tons to 757.8 million, mostly on higher feed and residual use for China, Australia, and the EU.  China is raised 3.0 million tons to 24.0 million, which would be its highest wheat feed and residual use since 2012/13.  Increased wheat feed usage is expected as China’s domestic price premium of wheat over corn has narrowed significantly this year with greater supplies of old-crop wheat available through government auctions of grain stocks.  Projected 2020/21 global trade is raised 2.9 million tons to 193.7 million on higher exports for Australia, Canada, Russia and the United States.  The largest import increases this month are for China and Pakistan, each raised 500,000 tons.  China’s import pace continues to be significantly higher than last year and at 8.5 million tons, imports would be the largest since 1995/96.  Pakistan continues to actively import wheat to raise stocks in order to alleviate food price inflation concerns.  Pakistan’s imports of 2.5 million tons would be its largest since 2008/09.  Projected 2020/21 world ending stocks are lowered 3.9 million tons to 316.5 million but remain record high with China and India holding 51 and 10 percent of the total, respectively.

COARSE GRAINS:  This month’s 2020/21 U.S. corn supply and use outlook is unchanged from last month.  The projected season-average farm price is unchanged at $4.00 per bushel.

Global coarse grain production for 2020/21 is forecast virtually unchanged at 1,447.8 million tons.  The 2020/21 foreign coarse grain outlook is for essentially unchanged production, greater trade, and smaller ending stocks relative to last month.  Foreign corn production is forecast lower as an increase for Ukraine is more than offset by reductions for Argentina, the EU, and Canada.  Argentina corn production is reduced based on lower expected area.  Canada corn output is lowered as marginally higher area is more than offset by a reduction in yield.  EU corn production is down mostly reflecting a smaller forecast for Bulgaria.  Ukraine corn production is raised based on harvest results to date.  Barley production is raised for Australia and Canada.  Sorghum production is increased for Argentina.

Corn exports are raised for Ukraine but lowered for the EU.  Imports are raised for China and Bangladesh, with partially offsetting reductions for the EU, Egypt, Iran, Morocco, and Tunisia.  China’s sorghum and barley imports are projected higher, raising the country’s total coarse grain imports 4.8 million tons to 30.9 million.  If realized, this would be record high and account for 14 percent of global coarse grain trade, slightly below the high seen during 2014/15.  Foreign corn ending stocks for 2020/21 are reduced, mostly reflecting reductions for India, Brazil, Canada, Ukraine, and Egypt.

RICE:  The outlook for 2020/21 U.S. rice this month is for slightly lower supplies, unchanged domestic use, decreased exports, and higher ending stocks.  Supplies are lowered, all on reduced medium- and short-grain imports.  Imports are lowered by 0.8 million cwt to 36.5 million as reduced shipments from China to Puerto Rico are expected.  Exports are lowered by 2.0 million cwt to 95.0 million on the continued weak pace of sales and shipments in the first half of the marketing year (MY) with all the reduction for long-grain.  Projected 2020/21 all rice ending stocks are raised 1.3 million cwt to 50.8 million, up 77 percent from last year.  These would be the largest ending stocks since the 1986/87 MY.  The projected 2020/21 all rice season-average farm price is raised $0.20 per cwt to $13.10 with increases in both the long-grain and medium- and short-grain prices.  These increases are based on NASS prices reported through October and price expectations for the remainder of the MY.

OILSEEDS:  Total U.S. oilseed production for 2020/21 is projected at 123.7 million tons, down from last month on lower cottonseed production.  Soybean crush for 2020/21 is increased 15 million bushels to 2.195 billion on strong crush margins and record early-season crush.  With exports unchanged, soybean ending stocks for 2020/21 are projected at 175 million bushels.  If realized, ending stocks would be the lowest since 2013/14.

Soybean and soybean product prices are forecast higher this month.  The U.S. season-average soybean price for 2020/21 is projected at $10.55 per bushel, up 15 cents.  The soybean meal price is projected at $370 per short ton, up 15 dollars.  The soybean oil price is forecast at 36 cents per pound, up 1.5 cents with cash prices reaching the highest level in the past six years.

Global oilseed trade for 2020/21 is projected at 191.8 million tons, up 1.0 million from last month.  Increased soybean exports for Canada and Uruguay and increased rapeseed exports for Canada and Australia account for most of the gains.  Global oilseed ending stocks are projected at 97.8 million tons, down 0.8 million from last month.

SUGAR:  U.S. sugar supply for 2020/21 is increased 357,525 short tons, raw value (STRV) to 14.006 million on projected increases in imports more than compensating for production decreases and a slight reduction in beginning stocks.  Imports are projected to increase 403,706 STRV to 3.428 million.  The largest increase is for imports from Mexico.  These are increased by 271,750 STRV to 1.160 million.  Raw sugar 2019/20 TRQ entering in October 2020 has been revised upward by 96,956 STRV for a total of 248,854 STRV.  After the publication of USDA’s Sweetener Market Data this month, FAS resolved certain anomalies in Customs reporting for TRQ entries.  Additional sugar not recorded for October sourced from Australia, Brazil, and several other countries was determined to have entered.  As a consequence of this adjustment, raw sugar TRQ imports for 2020/21 are projected at 1.381 million STRV, and the 2019/20 raw sugar TRQ shortfall is estimated at 84,180 STRV.  High-tier tariff imports for 2020/21 are increased by 35,000 STRV to 110,000 on the pace to date.

Beet sugar production is reduced by 40,396 STRV to 4.859 million on processors’ forecasts of national sugarbeet production lower than that forecast last month by NASS.  Although NASS increased Louisiana sugarcane yield 7.4 percent to 32.0 tons/acre, cane sugar production is unchanged due to the slower-than-expected pace during the hurricane-affected early weeks of the campaign and the planned extension of harvest end dates to accommodate the large crop.  There are no changes to 2020/21 use.  Ending stocks for 2020/21 are projected residually at 1.666 million STRV implying an ending stocks-to-use ratio of 13.50 percent.

Sugar supply in Mexico for 2020/21 is up on increased imports of sugar for consumption in the amount of 19,000 metric tons (MT).  This increase is based on FAS Post analysis.  Total imports are projected at 105,000 MT, of which 40,000 are for consumption and 65,000 for IMMEX.  There are no other supply changes.  Exports are residually increased by the same 19,000 MT.  Exports to the United States are increased to 992,683 MT on calculated U.S. Needs as set out in the AD/CVD Suspension Agreements.  Exports to third-country destinations are residually decreased to 496,824 MT.

LIVESTOCK, POULTRY, AND DAIRY:  Total red meat and poultry production for 2020 is little changed from last month as higher beef and pork production nearly offsets lower poultry production.  The beef production forecast is raised as higher non-fed cattle slaughter more than offsets lighter expected cattle carcass weights.  Pork production is increased on the current pace of slaughter and heavier carcass weights.  Broiler production is reduced on recent hatchery and slaughter data while the turkey production forecast is lowered on recent slaughter data.  The egg production forecast is raised.

For 2021, total red meat and poultry production is reduced from last month as lower forecast beef and poultry production more that offsets slightly higher pork production.  Beef production is reduced on lower expected fed and non-fed cattle slaughter in the first half of 2021.  Pork production is raised on heavier carcass weights.  Broiler and turkey production forecasts are reduced on recent hatchery data.

Based on recent trade data, the beef import forecast for 2020 is reduced from last month, but the pork import forecast is raised.  Beef and pork export forecasts are unchanged for 2020 and 2021.  Broiler and turkey exports for 2020 and 2021 are raised on recent trade data and anticipated strong global import demand from key trading partners.

The cattle price forecast for 2020 is reduced on current price weakness but is raised for 2021.  The fourth-quarter hog price is raised on recent prices; no change is made to 2021 hog prices.  The 2020 and 2021 broiler price forecasts are raised from last month on current prices and lower supply expectations.  The 2020 turkey price is reduced, but no change is made to the 2021 forecast.  The egg price forecasts for 2020 and 2021 are lowered on recent prices and expectations of weaker demand.

Milk production is projected higher for 2020, on higher cow numbers.  The 2020 fat basis import forecast is reduced on lower imports of butterfat products while the fat basis export forecast is lowered on weaker foreign demand for cheese.  The 2020 skim-solids basis import forecast is unchanged, but the export forecast is raised on strong global demand for whey and whey products.  For 2021, milk production is raised on higher cow numbers.  The fat basis import forecast is reduced on lower expected imports of a number of dairy products, but the export forecast is raised.  The skim-solids basis import forecast is unchanged, but the export forecast is raised on larger shipments of nonfat dry milk powder and dry whey products.

Based on recent price movements, cheese and butter price forecasts for 2020 are lowered, but the whey price is raised.  The nonfat dry milk (NDM) price is unchanged.  For 2021, cheese and butter price forecasts are reduced on weaker expected demand and larger supplies, but NDM and whey prices are raised.  The 2020 Class III price forecast is lowered as the weaker cheese price more than offsets higher whey price projections; the Class IV price is also lowered from last month on the lower butter price.  For 2021, forecasts of both Class III and Class IV are reduced from last month on weaker prices for cheese and butter respectively.  The 2020 all milk price is unchanged at $18.25 per cwt; the 2021 all milk price is lowered to $16.60 per cwt.

COTTON:  This month’s outlook for U.S. cotton includes lower production, higher exports, and lower ending stocks.  Production is lowered 1.1 million bales, mainly due to a 900,000-bale reduction in Texas.  Domestic mill use is unchanged, but exports are raised 400,000 bales to 15.0 million as world consumption and U.S. export sales rise.  Ending stocks are 1.5 million bales lower, at 5.7 million or 33 percent of use.  This stocks-to-use ratio would be 8 percentage points lower than in 2019/20, and the second highest since 2007/08.  Upland cotton’s projected 2020/21 season-average price is 65.0 cents per pound, 1 cent higher than last month and 5.4 cents above 2019/20.

Projected world 2020/21 ending stocks are 3.9 million bales lower this month, reflecting lower production and higher consumption.  A 2.2-million-bale decline in global production is led by lower U.S. output and includes 500,000-bale reductions in both India and Pakistan, in addition to other smaller adjustments.  Consumption is projected 1.6 million bales higher, and at 115.6 million bales, is expected 13 percent above 2019/20’s depressed level.  Compared to last month, 2020/21 consumption forecasts are 1.0 million bales higher for India and 500,000 bales higher for China, with smaller changes for Pakistan and Thailand.  World trade in 2020/21 is projected more than 300,000 bales higher this month, with increased imports for China and Pakistan more than offsetting lower forecasts for Bangladesh, Thailand, and Indonesia.  World ending stocks are now forecast at 97.5 million bales, 1.9 million lower than in 2019/20.

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