The June 11 World Agricultural Supply and Demand Estimates report from the U.S. Department of Agriculture showed the effects of trade and weather on crops and livestock in the United States.
The USDA has caught up with the weatherman, with this month’s 2019-20 U.S. corn outlook calling for sharply lower production, reduced feed and residual use and exports, and smaller ending stocks.
“Beginning stocks are up, reflecting a 100-million-bushel decline in projected exports from 2018-19 to 2.2 billion bushels, based on current outstanding sales and reduced U.S. price competitiveness,” the report stated.
With unprecedented weather difficulties delaying spring planting, corn production for this year is now forecasted to decline by 1.4 billion bushels. At 13.7 billion bushels, the forecasted production is on course to be the lowest since 2015-16. The June 28 USDA Acreage report will show a more complete picture of planted acres.
With these sharply lower supplies, the season-average farm price is expected to raise 50 cents to $3.80 per bushel.
Shorter supplies and rising prices means USDA predicts use will decline by about a half a million bushels to 14.3 billion in the feed, residual use and export sectors.
On the global market, the June forecast is for lower production, increased trade and lower stocks relative to May, according to the report. Argentina production is expected to be higher with more acres planted and higher prices. Canadian production is expected to be lower with planting delays taking away acres and yield. Russian production is expected to be higher, with the government indicating a larger planting area than previously expected.
Increased 2018-19 wheat exports dropped beginning stocks down by 25 million bushels, according to the report. U.S. winter wheat farmers are expected to produce 6 million more bushels, to 1.27 billion bushels, with Hard Red Winter leading the way over decreased production of Soft Red Winter and White Winter wheats.
“Total wheat production is now forecast at 1.903 billion bushels, up 5.8 million bushels from the May forecast,” the report stated.
Exports for 2019-20 are unchanged at 900 million bushels, but with the struggles of corn farmers to get a crop into the field, feed and residual use of wheat is expected to rise to 140 million bushels. That will translated to a 40-cent increase in season-average farm price, to $5.10 per bushel.
Globally, Russia and Ukraine have won the weather lottery, with favorable weather raising their production numbers by 1 million tons each. These larger crops will mean Russia is projected to export 37 million tons and Ukraine export a record 19.5 million tons. That’s meeting a world consumption figure that’s expected to rise by 3.6 million tons with higher food and feed and residual use. Therefore, USDA predicts ending stocks will reflect higher supplies than use and reach a record 294.3 million tons.
Despite the same adverse weather keeping corn farmers out of their fields, USDA kept soybean planted area and production forecasts unchanged.
“Although adverse weather has significantly slowed soybean planting progress this year, area and production forecasts are unchanged with several weeks remaining in the planting season,” according to the report.
The ending 2019-20 stocks are projected at 1.045 billion bushels, down 25 million from the revised 2018-19 estimate. This reflects lower-than-expected shipments in May and a lower import forecast for China, the report stated. Farmers should expect increased soybean meal imports and exports, reduced soybean oil used for biodiesel, and higher soybean oil ending stocks, the report predicted.
Higher corn prices are reflected in the 2019-20 season-average price for soybeans that the report forecasted at $8.25 per bushel. That’s up 15 cents. Meanwhile, soybean meal prices are forecast at $295 per short ton, up $5, and soybean oil price remains the same at 29.5 cents per pound, according to the report.
Globally, lower production and stocks are expected due to lower crops for Ukraine and Zambia.
The report left U.S. cotton supply and demand projections unchanged from the May report. There was a 1-cent decline in the season-average upland farm price, dropping it to 64 cents per pound.
Globally, ending stocks for 2019-20 are projected to be 1.6 million bales, up from May because of an increase of 1.1 million bales in beginning stocks and a 660,000-bale decline in consumption.
India had a larger 2018-19 production and China consumed less cotton than expected. China’s reduction of consumption by half a million bales is expected to lower world consumption and imports in 2019-20.
To read the full report, visit: www.usda.gov/oce/commodity/wasde/wasde0619.pdf.
Jennifer M. Latzke can be reached at 620-227-1807 or firstname.lastname@example.org.