WHEAT: U.S. wheat ending stocks for 2010/11 are projected 40 million bushels lower this month as a reduction in expected feed and residual use is more than offset by higher projected exports. Feed and residual use is projected 10 million bushels lower as December 1 stocks, reported in the January Grain Stocks, indicate lower-than-expected disappearance during September-November. Exports are projected 50 million bushels higher reflecting the pace of sales and shipments to date and reduced competition with lower foreign supplies of milling quality wheat. At the projected 1.3 billion bushels, exports would be the highest since 1992/93. Most of the increase is expected in Hard Red Winter and Soft Red Winter wheats, but exports are also raised slightly for Hard Red Spring and white wheats. The marketing-year average price received by producers is projected at $5.50 to $5.80 per bushel, up from $5.30 to $5.70 per bushel last month.
Global 2010/11 wheat supplies are raised slightly this month as increased beginning stocks are mostly offset by lower foreign production. Beginning stocks for Argentina are up 0.9 million tons with upward revisions to 2008/09 and 2009/10 production estimates. Argentina production is also raised 0.5 million tons for 2010/11 as harvest results indicate higher-than-expected yields. Production in Brazil is raised 0.4 million tons as favorably dry harvest weather boosted yields for the 2010/11 crop. EU-27 production is raised 0.3 million tons based on the latest official estimates for Poland. More than offsetting these increases are reductions for Kazakhstan and Australia. Kazakhstan production is lowered 1.3 million tons based on the latest government reports. Australia production is lowered 0.5 million tons as heavy late-December rains and flooding further increased crop losses in Queensland.
World wheat imports and exports for 2010/11 are both raised slightly. South Korea imports are raised 0.4 million tons, mostly offsetting an expected reduction in corn imports. Imports are also raised 0.2 million tons each for Thailand and Vietnam based on the pace of shipments to date and the increased availability of feed quality wheat in Australia. Imports are lowered 0.5 million tons for EU-27 based on the slow pace of import licenses to date. Major shifts among exporters are projected as importers focus on U.S. supplies to meet their milling needs. Australia exports are reduced 1.5 million tons as quality problems limit export opportunities. Kazakhstan exports are reduced 1.0 million tons with lower supplies. While Argentina marketing-year (December-November) exports are raised 0.5 million tons, exports during the remainder of the July-June world trade year are expected to be lower based on the slow pace of government export licensing.
Global 2010/11 wheat consumption is projected 1.2 million tons lower, mostly reflecting reduced wheat feeding in EU-27, the United States, and Kazakhstan. Food use is also lowered for EU-27 and Pakistan. Partly offsetting are increases in feed use in South Korea, Thailand, and Vietnam, and higher expected residual loss in Australia with the rain-damaged crop. Global ending stocks are raised 1.3 million tons with increases for EU-27, Argentina, and Australia, more than offsetting the U.S. reduction.
COARSE GRAINS: U.S. feed grain supplies for 2010/11 are projected down reflecting lower corn production. U.S. corn production is estimated 93 million bushels lower as a 1.5-bushel-per-acre reduction in the national average yield outweighs a 183,000-acre increase in harvested area. A 5-million-bushel increase in projected U.S. corn imports slightly offsets the reduction in output. Corn feed and residual use is projected 100 million bushels lower based on September-November disappearance as indicated by the December 1 stocks. Corn used for ethanol is raised 100 million bushels offsetting the reduction in expected feed and residual use. Record December ethanol production, as indicated by weekly Energy Information Administration data, boosts corn use to date.
Ending corn stocks for 2010/11 are projected 87 million bushels lower at 745 million. This is down 963 million bushels from last year. The stocks-to-use ratio is projected at 5.5 percent, the lowest since 1995/96 when it dropped to 5.0 percent. The 2010/11 marketing-year average farm price projection is raised 10 cents on both ends of the range to $4.90 to $5.70 per bushel as cash and futures prices are expected to strengthen. Heavy early season marketings of corn priced well below current cash price levels are expected to limit the upside potential for the weighted average price received by producers.
Global 2010/11 coarse grain supplies are projected lower this month with reduced corn, sorghum, oats, and rye production only partly offset by higher projected barley production in Argentina and EU-27. Global corn production is lowered 4.7 million tons with the U.S. reduction and a 1.5-million-ton decrease for Argentina as untimely, persistent dryness during late December and early January reduces yield prospects in key central growing areas. Smaller reductions in corn output are also projected for Indonesia and Turkey, each down 0.4 million tons. Global sorghum production is lowered with a 0.3-million-ton reduction for Brazil based on the latest government estimates. Brazil oats production is lowered slightly in line with government estimates. Russia oats and rye production are lowered 0.3 million tons and 0.4 million tons, respectively, based on the latest government indications.
Global 2010/11 coarse grain trade is lowered as higher expected prices and tighter supplies reduce corn imports and exports. Corn imports are lowered for South Korea, Turkey, and the Philippines, but raised for Indonesia. Corn exports are reduced for Argentina and Turkey, with a partly offsetting increase for Canada. Global corn consumption is lowered mostly reflecting reduced feeding in South Korea and Turkey. Global corn ending stocks are projected 3.0 million tons lower with more than two-thirds of the reduction in the United States.
RICE: The U.S. 2010/11 rice crop is estimated at 243.1 million cwt, up 1.5 million or 0.6 percent from the previous estimate due to increased yields. Average yield is estimated at 6,725 pounds per acre, up 56 pounds per acre from last month, but a decline of 360 pounds per acre from the previous year. Harvested area is estimated at 3.615 million acres, down 8,000 acres from the previous estimate. Long-grain rice production is estimated at a record 183.3 million cwt, up 1.8 million from last month, and combined medium- and short-grain production is fractionally lowered to 59.8 million. All rice imports for 2010/11 are lowered 1.5 million cwt to 18 million with the decline all in long grain. The pace of imports based on U.S. Census Bureau data through October is lagging, principally due to reductions from Thailand and India.
The National Agricultural Statistics Service’s (NASS) Rice Stocks reported total rough rice stocks at 172.9 million cwt as of December 1 and total milled stocks at 6.3 million (9.3 million cwt on a rough-equivalent basis). Total rice stocks on a rough-equivalent basis are 182.2 million, up 11 percent from a year earlier. Long-grain stocks as of December 1 are estimated at 126.9 million (rough-equivalent basis) and combined medium- and short-grain stocks at 52.7 million.
Domestic and residual use for 2010/11 is unchanged at a record 129.0 million cwt. However, long-grain domestic and residual use is raised 2.0 million cwt to a record 101.0 million, while domestic and residual use of combined medium- and short-grain is lowered the same amount to 28.0 million. Some substitution of lower priced long-grain rice for higher priced medium-grain rice in domestic use is projected to continue. All rice exports are lowered 2.0 million cwt to 117.0 million, with long-grain lowered 4.0 million to 79.0 million, and combined medium- and short-grain raised 2.0 million to a record 38.0 million. The pace of exports and sales of long-grain rice is lagging based on Census data through October and U.S. Export Sales data through December. Conversely, the pace of sales of combined medium- and short-grain rice is stronger than expected. The 2010/11 rough rice export projection is lowered 1.5 million cwt to 43.5 million, while exports of combined milled and brown rice are lowered 0.5 million to 73.5 million (rough-equivalent basis). All rice ending stocks for 2010/11 are projected at 51.8 million cwt, up nearly 2.0 million from last month, up 15.1 million from 2009/10, and the largest stocks since 1986/87. Long-grain rice ending stocks are forecast at a record 41.9 million cwt, up 2.3 million from last month, and an increase of 18.8 million from the previous year. Combined medium- and short-grain rice ending stocks are projected at 8.4 million cwt, fractionally lower than last month, and a decrease of 3.7 million from 2009/10.
The 2010/11 long-grain season-average farm price range is projected at $10.50 to $11.50 per cwt, unchanged from last month, while the combined medium- and short-grain farm price range is projected at $17.00 to $18.00 per cwt, up 20 cents per cwt on each end of the range. The all rice season-average farm price is forecast at $12.00 to $13.00 per cwt, unchanged from last month. The price projections are based on NASS reported prices through mid-December and expected prices for the remainder of the marketing year.
Global 2010/11 rice production, consumption, trade and ending stocks are lowered slightly from a month ago. The decrease in global rice production is due primarily to a smaller crop in Egypt, which is down 0.5 million tons (-14%) to 3.1 million. Egypt’s area harvested in 2010/11 is reduced 19 percent from a month ago and is down 30 percent from the previous year. A reduction in the Egyptian government’s support of producer prices has discouraged farmers from planting rice. Additionally, the Egyptian government has imposed water restrictions thus reducing irrigation water availability. Furthermore, government restrictions have reduced exports. Global imports are increased slightly due primarily to increases for Indonesia and Turkey, but partially offset by a reduction for Egypt. Global exports are increased slightly due mostly to an increase for Thailand, partially offset by a decrease for Egypt. World ending stocks are projected at 94.4 million tons, down 0.4 million from last month and last year.
OILSEEDS: U.S. oilseed production for 2010/11 is estimated at 100.5 million tons, down 1.2 million from last month. Lower crops for soybeans, sunflowerseed, and canola are only partly offset by increases for peanuts and cottonseed. Soybean production is estimated at 3.329 billion bushels, down 46 million bushels based on reduced harvested area and lower yields. The soybean yield is estimated at 43.5 bushels per acre, down from last year’s record of 44 bushels per acre. Soybean crush is lowered 10 million bushels to 1.655 billion bushels. However, higher projected extraction rates for soybean meal and oil leaves production of both products nearly unchanged. Soybean exports are projected at a record 1.590 billion bushels, unchanged from last month. Soybean ending stocks are projected at 140 million bushels, down 25 million from last month.
The 2010/11 U.S. season-average soybean price range is projected at $11.20 to $12.20, up 50 cents on the lower end of the range. However, early season marketings priced below current cash price levels are expected to limit the upside potential for the weighted average price received by producers. The soybean oil price is forecast at 48 to 52 cents per pound, up 3 cents on both ends of the range. The soybean meal price is projected at $320 to $360 per short ton, up 10 dollars on both ends of the range.
Global oilseed production for 2010/11 is projected at 440.4 million tons, down 2.3 million from last month. Global soybean production is projected at 255.5 million tons, down 2.3 million. The Argentina soybean crop is projected at 50.5 million tons, down 1.5 million from last month due to lower projected yields. Although recent rains will help producers complete planting, earlier periods of unfavorable dryness have compromised yield potential, especially in some of the major producing areas. Paraguay soybean production is raised 0.5 million tons to 7 million due to increased area and favorable yield prospects. Global oilseed ending stocks for 2010/11 are reduced 2 million tons to 68.3 million with Argentina and U.S. soybean stocks accounting for most of the change.
SUGAR: Projected U.S. sugar supply for fiscal year 2010/11 is decreased 88,000 short tons, raw value, from last month. Cane sugar production in Florida is reduced 100,000 tons, based on processor forecasts. Imports are increased 12,000 tons, as the Dominican Republic is eligible in 2011 to use its quota under the CAFTA-DR trade agreement. Use is unchanged.
LIVESTOCK, POULTRY, AND DAIRY: The estimate of 2010 red meat and poultry production is raised from last month, reflecting higher production of beef, pork, broilers, and turkey. The forecast of production for 2011 is also raised for beef and broilers, but lowered for pork. The turkey production forecast is unchanged from last month. The increase in beef production reflects large placements of cattle during the fourth quarter of 2010 which will be ready for slaughter during mid-2011. USDA will release its Cattle report on January 28 providing an indication of producer intentions for heifer retention in 2011 and feeder cattle availability. Broiler production forecasts are adjusted to reflect relatively heavy bird weights. Pork production is reduced slightly for 2011. USDA’s Quarterly Hogs and Pigs report indicated that producers intend to farrow fewer sows in the first half of 2011 but continued strong growth in the number of pigs per litter implies relatively abundant supplies of hogs for slaughter will be available during 2011. Higher forecast hog weights will also partly offset the effects of lower farrowings on pork production, but recent increases in weights are not expected to be sustained during the year. The forecast of egg production is unchanged from last month.
The forecast for beef exports for both 2010 and 2011 is unchanged from last month but the forecast of beef imports is lowered as a weak U.S. dollar and tight supplies in several exporting countries limit shipments. The pork export forecasts for 2010 and 2011 are reduced slightly from last month as higher pork prices are expected to more than offset weakness in the U.S. dollar. The broiler export forecast is raised for 2010 but the 2011 forecast is unchanged from last month.
The cattle price forecast for 2011 is raised to reflect continued strong demand for cattle and tightening supplies of fed cattle. Hog prices for 2011 are forecast higher as demand for hogs remains strong. The broiler price forecast is lowered on larger supplies of broilers and competing meats. Egg prices are forecast higher.
The milk production estimate for 2010 and forecast for 2011 are unchanged from last month. Ending stocks for 2010 are reduced due to expected low stocks of butter and nonfat dry milk (NDM) at the end of the year. Imports for 2010 and 2011 are reduced due to low U.S. prices relative to those internationally coupled with a weak U.S. dollar. Skim-solids basis exports are raised as NDM exports are expected to be supported by tight world supplies into mid-2011. Fat basis exports for 2010 are lowered from last month on weaker-than-expected exports of butterfat.
Butter, NDM, and whey prices are forecast higher, but the cheese price forecast is lowered. Tighter beginning stocks support a higher butter price forecast while generally strong exports of NDM and whey will support higher prices. The cheese price forecast is reduced from last month on moderate demand. The Class III price forecast range is reduced as the lower forecast cheese price more than offsets the higher whey price forecast. The Class IV price forecast is raised as both the butter and NDM price forecasts are raised. The all milk price is forecast to average $16.10 to $16.90 per cwt for 2011.
COTTON: The U.S. cotton 2010/11 supply and demand estimates show minor revisions from last month. Production is raised 47,000 bales, due mainly to increases for California and Georgia. Domestic mill use is raised 50,000 bales to 3.6 million, reflecting stronger-than-expected activity in recent months. Exports and ending stocks are unchanged. The forecast range of 78 to 86 cents per pound for the average price received by producers is raised 2 cents on the lower end, as monthly prices reported by NASS continue to rise.
This month’s world cotton 2010/11 estimates include lower beginning stocks and production and higher consumption, resulting in a 560,000-bale reduction in ending stocks. Global production is reduced marginally as increases for Brazil and Turkmenistan are more than offset by reductions for Syria and others. World consumption is raised slightly, reflecting an increase for India and reductions for Pakistan and Syria. World trade is reduced marginally.
Source: WASDE/USDA