The U.S. Department of Agriculture released its hotly anticipated monthly World Agricultural Supply and Demand Estimates on Aug. 12. This report was expected to show the updated July USDA National Agricultural Statistics Service acreage numbers for corn and soybeans.
According to the report, the U.S. corn outlook is for larger supplies, reduced exports and corn used for ethanol, and overall larger ending stocks.
“Corn production is forecast at 13.9 billion bushels, up 26 million from the July projection as a decline in harvested acres is virtually offset by an increase in yield,” the report stated. “The season’s first survey-based corn yield forecast, at 169.5 bushels per acre is 3.5 bushels higher than last month’s projection.” Of the major producing states, only Missouri is forecast to have yields higher than last year, while Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota are predicted to have lower yields than last year.
Meanwhile, corn used for ethanol will be reduced by 25 million bushels to 5.5 billion bushels, the report stated. And, with increasing competition from Argentina, Brazil and the Ukraine, U.S. export numbers were lowered.
“With supply rising and use falling, ending stocks are up 171 million bushels to 2.2 billion,” the report stated. “The season-average corn price received by producers is lowered 10 cents to $3.60 per bushel.”
The report projects U.S. oilseed production down 4.5 million tons from July’s predictions, mainly due to a lower soybean production forecast.
“Soybean production is forecast at 3.68 billion bushels, down 165 million on lower harvested area,” the report stated. “Harvested area is forecast at 75.9 million acres, down 3.4 million from the NASS June Acreage Report, led by reduction for Ohio and South Dakota.” Both states account for almost half of the national reduction in soybean acres.
While the soybean yield forecast of 48.5 bushels per acre is unchanged from July, it is 3.1 bushels below 2018. Lower production, partly offset by higher beginning stocks, means soybean supplies for 2019-2020, are expected at 4.77 billion bushels, or down 3% from July.
Don’t expect those soybeans to be moved through the export channels, as the WASDE report predicts U.S. soybean exports to be reduced by 100 million bushels, to 1.78 billion bushels. This reflects reduced global import demand, mainly by China, according to the report.
“Soybean ending stocks are projected at 755 million bushels, down 40 million,” the report stated. “The U.S. season-average soybean price for 2019-20 is forecast at $8.40 per bushel, unchanged from last month.”
The WASDE report predicted greater U.S. wheat supplies, with increased use and higher ending stocks.
“U.S. wheat production is raised 50 million bushels, to 1.98 billion on increased winter wheat and other spring wheat production as indicated by the NASS August Crop Production report,” according to the WASDE report.
Food use for wheat in 2019 is lowered by 5 million bushels to 955 million bushels, based on the NASS Flour Milling Products report, and that usage is expected to decline in 2020 as well.
Meanwhile, feed and residual use is the bright spot for wheat farmers. The report predicts an extra 20 million bushels will go into the feed stream based on higher wheat supplies and more competitive prices.
On the export side, projected 2019-2020 U.S. wheat exports should rise 25 million bushels to 975 million bushels based on lower exportable supplies from key competitors in the EU, Kazakhstan and Russia, the report stated.
“Ending stocks for 2019-20 are raised 14 million bushels, to 1.014 billion, down 5% from the previous year,” The report stated. That means the season-average price is lowered 20 cents per bushel, to $5 on updated NASS prices, lower U.S. corn prices and reduced wheat price expectations for the rest of the marketing year.
Total meat production in 2019 will be led by increases in broiler and turkey production, according to the report. The decline in beef production is mostly due to a slower pace of cattle slaughter in the third quarter combined with lighter carcass weights through the rest of the year.
The WASDE report predicts higher paced first-half marketings for beef in 2020. This despite lower than expect marketings at the end of 2019 because of lower calf-crop estimates.
Beef export forecasts for 2019 and 2020 are unchanged in this report. Fed cattle prices are raised for 2019 based on current price strength and the 2020 price forecast was also raised in the report.
To see the full report, visit www.usda.gov/oce/commodity/wasde/.
Jennifer M. Latzke can be reached at 620-227-1807 or email@example.com.