The U.S. Department of Agriculture released its monthly World Agricultural Supply and Demand Estimates report Oct. 10 as several major crops are now projected to see a decline in harvested bushels.
“Corn production is forecast at 13.779 billion bushels, down 20 million as a decline in harvested area more than offsets an increased yield forecast,” the report stated. This supply forecast is down sharply from September, based on a reduced crop and lower beginning stocks from the Sept. 30 “Grain Stocks” report.
The United States corn outlook for 2019-20 is for slightly lower production.
Exports are predicted to be down 150 million bushels, based on smaller supplies and U.S. price competitiveness. Corn used for ethanol is down 50 million bushels. But, feed and residual use is up 125 million bushels, and so ultimately corn ending stocks for 2019-20 are lowered 261 million bushels.
“The season-average corn price received by producers is raised 20 cents to $3.80 per bushel,” the report stated.
On the grain sorghum side, production is expected to see a 0.4-bushel-per-acre decline in yield, to 73.9 bushels per acre, along with a reduced harvest area.
Corn exports are rising from Russia and Brazil. From July to September Brazil has exported nearly 20 million tons of corn, almost 50% above the previous high for the same time period. Those tons are headed to Japan, South Korea, Mexico and Colombia, all important U.S. markets, the report stated.
U.S. soybean production dropped 83 million bushels to 3.6 billion bushels, mainly on lower yields, the report stated. Projected soybean yields are now 46.9 bushels per acre, down a bushel from September.
“Harvested area is reduced slightly to 75.6 million acres,” the report stated.
Lower production and lower beginning stocks mean soybean supplies for 2019-20 are forecast at 4.5 billion bushels, down 175 million bushels from last report. A small projected increase in soybean crush means projected ending stocks are 460 million bushels, down 180 million from last report.
Smaller supplies mean the U.S. season-average soybean price for 2019-20 is forecasted at $9 per bushel, up 50 cents.
The report predicts 2019-20 U.S. wheat supplies to be smaller, with reduced total use, resulting in rising ending stocks.
“Wheat production is cut 18.5 million bushels, down to 1.962 billion bushels based on the National Agricultural Statistics Service Small Grains Summary, Sept. 30,” the report stated. Projected imports are lowered to 120 million on a slow pace.
Ending stocks for 2018-19 were raised 8 million bushels, and the first quarter stocks for 2019-20 are 2.385 billion bushels. Even with 2019-20 feed and residual use at 140 million bushels, that’s above last year’s 89.8 million bushels use.
Exports were lowered in this report to 950 million bushels, a decline of 25 million bushels, based on reduced competitiveness in international markets, according to the report.
“Ending stocks are projected at 1,043 million bushels, up 29 million from the previous month, and the season-average farm price is lowered 10 cents per bushel to $4.70,” the report stated.
On the global side, higher beginning stocks offset decreases in production, particularly a 1-million-ton cut to Australia’s crop because of drought.
The European Union and Turkmenistan both saw production increases.
“World wheat consumption is reduced 1.1 million tons primarily on a 0.8-million-ton reduction in U.S. feed and residual use,” the report stated. “With supplies rising and use declining, global ending stocks are raised 1.3 million tons to a record 287.8 million.”
U.S. 2019-20 cotton production was lowered less than 1%, to 21.7 million bales, mostly based on a reduction in Texas cotton production. Ending stocks were reduced by 200,000 bales to 7 million bales. That would be a projected 36% of use, compared to 27% in 2018-19. The season-average price for upland cotton in 2019-20 is forecast at 58 cents per pound, unchanged from September, and 12.5 cents lower than 2018-19.
World production showed little change from September. Brazil, Pakistan, Australia and the U.S. all showed declines that more than offset India’s 1-million-bale increase.
Global consumption, according to the report, is down 130,000 bales from September’s forecast, and the projection for world trade in the coming year is down by 300,000 bales.
“Lower expected imports for China and Vietnam more than offset increases for Pakistan and Turkey,” the report stated. “Exports for Australia and Brazil are also lower. World ending stocks in 2019-20 are now forecast at 83.7 million bales, virtually unchanged from the September forecast but 3 million bales higher than in 2018-19.”