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World Agricultural Supply and Demand Estimates - April 2010

by 5m Editor
13 April 2010, at 12:00am

The forecast for 2010 total US meat production is raised as higher beef and poultry production more than offset lower pork output, according to the USDA World Agricultural Supply and Demand Estimates for April 2010.

LIVESTOCK, POULTRY, AND DAIRY: Higher fed cattle marketings in the first quarter support a higher forecast of beef production despite lower carcass weights in the first part of the year.

Cow slaughter is increased for the first half of the year. Broiler meat production forecasts are raised as year-over-year hatchery data increases have grown and broiler slaughter data point to increasing bird weights.

The Quarterly Hogs and Pigs report, released on March 26, indicated a smaller-than-expected March 1 inventory, reduced sows farrowing through much of the year, and slower growth in the number of pigs per litter. Thus, pork production is reduced to reflect the expected smaller pig crops.

Meat export forecasts are reduced from last month, largely reflecting lower pork exports to Asian markets.

Cattle, hog, and poultry price forecasts are raised for 2010. Cattle and hog prices were strong in the first quarter and forecasts are raised sharply into the summer quarter as cattle and hog supplies are expected to be tight. Broiler prices are forecast higher as red meat supplies remain relatively tight and demand improves.

The milk production forecast is raised for 2010 as the pace of herd reduction is reduced from last month. Dairy exports on a skim-solids basis are lowered due to weaker-than-expected sales early in the year. Both fat and skim-solids basis imports are reduced from last month due to weaker-than-expected imports of cheese.

Fat and skim stocks are forecast higher for 2010 as cheese stocks have not declined as expected. Product price forecasts are generally lowered from last month as milk production is forecast higher and demand is weaker than expected. The cheese price is reduced as stocks remain high. The butter price forecast is about unchanged from last month as stronger prices in the first half of the year may largely be offset by lower second-half prices as butter production increases. The nonfat dry milk (NDM) price is forecast lower as export demand lags. The whey price is lowered slightly. The Class III price is reduced due to lower cheese and whey prices while the lower price forecast for NDM results in a reduced Class IV price. The all milk price for 2010 is forecast at $15.45 to $15.95 per cwt.

WHEAT: Projected feed and residual use is raised 10 million bushels as the March 1 stocks indicated higher-than-expected disappearance during the December-February quarter. Seed use is projected 1 million bushels higher based on state level seedings as indicated by the March 31 Prospective Plantings report. Exports are projected up 40 million bushels based on the strong pace of grain, flour, and product shipments in recent weeks, current outstanding sales, and reduced export prospects for some key competitors. By-class export projections are raised for hard red winter, hard red spring, and durum wheat. The projected marketing-year average farm price range is narrowed 5 cents on both ends to $4.85 to $4.95 per bushel.

Global wheat supplies for 2009/10 are nearly unchanged with a small production increase mostly offset by a decline in beginning stocks. Production is raised 0.2 million tons each for Afghanistan and Turkey. Argentina production and consumption are revised as recently available government mill grind data combined with exports indicate higher wheat usage in prior years than supportable by government production estimates.

Global wheat imports and exports for 2009/10 are both raised slightly as individual countries are adjusted based on the pace of sales and shipments. Imports are raised 0.5 million tons for Egypt, 0.3 million tons for Turkey, and 0.2 million tons each for Nigeria, the United Arab Emirates, and Vietnam. Imports are lowered 0.5 million tons for EU-27, 0.3 million tons for Algeria, and 0.2 million tons for Israel. Exports are raised 1.0 million tons for EU-27 and 0.6 million tons for Turkey. These increases, along with the 1.1-million-ton increase for the United States, are partly offset by 0.5-million-ton decreases each for Australia, Canada, and Russia. Exports are also lowered 0.2 million tons each for India and Pakistan. Global 2009/10 wheat consumption is raised 1.0 million tons with higher wheat feeding expected for Russia, Ukraine, and Egypt. Wheat feeding is lowered for EU-27. Wheat food use is also lowered for EU-27 and for Egypt. Global ending stocks are projected 1.0 million tons lower with the 1.4-million-ton reduction in U.S. stocks and 0.5-million-ton reductions for both Russia and Ukraine outweighing increases for Australia and Canada.

COARSE GRAINS: U.S. feed grain ending stocks for 2009/10 are raised 6 percent with lower domestic use projected for corn, barley, and oats. Corn feed and residual use is projected 100 million bushels lower as March 1 stocks and a record January ethanol production indicate lower-than-expected December-February feed and residual disappearance. Projected 2009/10 corn use for ethanol, however, is unchanged. Poor margins for ethanol producers and rising ethanol stocks limit near-term growth in production, despite strong price incentives for blending with a large discount for ethanol compared with gasoline. The lack of growth in gasoline consumption is likely constraining ethanol usage. Corn ending stocks are projected 100 million bushels higher. The 2009/10 marketing-year average corn farm price projection is narrowed 5 cents on both ends of the range to $3.50 to $3.70 per bushel.

Barley and oats ending stocks are both projected higher for 2009/10. Barley food, seed, and industrial use is lowered 5 million bushels reflecting lower year-to-year malt exports and beer consumption. Oats feed and residual use is lowered 15 million bushels based on the March 1 stocks which indicated lower-than-expected December-February disappearance. Sorghum feed and residual use is also lowered based on the March 1 stocks. A 10-million-bushel increase in sorghum food, seed, and industrial use is offsetting. Strong demand for sorghum by ethanol producers in the Southern and Central Plains is supporting prices and limiting opportunities for sorghum feeding. The projected sorghum farm price is also narrowed 5 cents on both ends of the range to $3.10 to $3.30 per bushel. The barley farm price is projected 10 cents higher on the bottom end of the range to $4.50 to $4.60 per bushel. The oats farm price projection is unchanged.

Global coarse grain supplies for 2009/10 are projected 5.1 million tons higher this month mostly reflecting larger beginning stocks and production for corn, sorghum and barley. The biggest increases in beginning stocks are for Thailand corn, Mexico sorghum, and Argentina barley. Argentina beginning stocks are raised for barley, corn, sorghum, and oats as a number of revisions to estimated production are made to better reflect government yield estimates prior to 2009/10. The largest increase in Argentina coarse grain beginning stocks is for barley as area is raised above government estimates for 2006/07 through 2008/09. Barley exports and consumption during this period exceed available supplies as indicated by the government of Argentina’s production series. Argentina barley consumption is revised to reflect rising barley malt exports and domestic beer consumption in recent years.

World corn production for 2009/10 is raised 2.0 million tons with higher expected production in Brazil and South Africa where growing season conditions have continued to be especially favorable. Corn production is raised 2.5 million tons for Brazil as higher reported summer crop yields and higher winter crop area boost production prospects. Rains have continued to support yield prospects in the central west region, but additional rains through April will be critical to winter crop yields. South Africa corn production is raised 0.5 million tons as another month of rains in the western growing areas is expected to further boost yields in this traditionally more arid region. Other corn production increases this month include a 0.4-million-ton increase for Ecuador and a 0.2-million-ton increase for Turkey. Sorghum production is raised 0.4 million tons for Argentina with higher expected yields. Syria barley production is increased 0.4 million tons on higher reported area. Offsetting these increases are a 0.7-million-ton reduction for Mexico corn, a 0.5-million-ton reduction for Venezuela corn, and smaller reductions in corn output for a number of other countries.

Global coarse grain imports and exports for 2009/10 are largely unchanged on balance, but a number of adjustments are made among key importing and exporting countries mostly reflecting the pace of shipments to date. Corn imports are lowered 1.5 million tons for Mexico, but a 0.8-million-ton increase for Egypt and smaller increases for several Middle Eastern countries are mostly offsetting. Sorghum imports are lowered 0.2 million tons for Mexico but raised 0.1 million tons for Chile. Sorghum exports are raised 0.2 million tons for Argentina with the large crop, but lowered an equal amount for Australia. Global coarse grain ending stocks for 2009/10 are projected higher mostly on a 4.1-million-ton increase in corn stocks with most of the increase in the United States and Brazil.

RICE: No changes are made on the supply side of the U.S. 2009/10 rice supply and use balance sheets. On the use side, domestic and residual use is estimated at a record 136.0 million cwt, 4 percent above last month, and 6 percent above 2008/09. Long-grain domestic and residual use is estimated at a record 104.0 million cwt, 5 percent above the March estimate, while combined medium- and short-grain domestic and residual use is estimated at 32.0 million cwt, up 3 percent from last month. The changes in the 2009/10 domestic and residual use estimates are based largely on the March 1 Rice Stocks report released by the National Agricultural Statistics Service (NASS) on March 31. NASS reported all rice stocks on a rough-equivalent basis at 108.5 million cwt, up 11 percent from a year earlier, but below trade expectations. The March 1 stocks imply greater domestic and residual use for both long-grain and combined medium- and short-grain rice.

The all rice export projection is raised 3.0 million cwt to 103.0 million with long-grain exports increased 2.0 million to 71.0 million and combined medium- and short-grain exports up 1.0 million to 32.0 million. Net sales and shipments have been strong in recent weeks for both long- and medium-grain rice. According to the U.S. Export Sales report, all rice export commitments for 2009/10 are 8 percent ahead of last year’s pace as of April 1 and on par with the pace of the preceding 5-year average. Export commitments have been particularly strong to Mexico, Central America, Turkey, Japan, and Taiwan. All rice ending stocks are projected at 32.3 million cwt, 21 percent below last month, but up 6 percent from 2008/09. Long-grain stocks are estimated at 15.8 million cwt, down 29 percent from last month and the lowest stocks since 2003/04. Combined medium- and short-grain stocks are estimated at 14.1 million cwt, down 12 percent from the March projection.

The combined medium- and short-grain 2009/10 price range is projected at $17.50 to $18.00 per cwt, up 5 cents on each end of the range from a month ago. The long-grain price range is projected at $12.85 to $13.35 per cwt, an increase of 15 cents per cwt on each end of the range from last month. These upward revisions were based on monthly prices reported by NASS through mid-March, NASS marketings through February, and expected prices and marketings for the remainder of the marketing year. These by class revisions increased the all rice season-average price for 2009/10 to $14.05 to $14.55 per cwt, up 15 cents per cwt on both ends of the range from a month ago.

Global 2009/10 production and consumption projections are increased from last month, while trade and ending stocks are lowered. World rice production is raised 0.5 million tons to 440.8 million based mostly on increases for Pakistan, North Korea, Ecuador, and Peru, which are partially offset by reductions for Thailand and Burma. Global consumption is increased nearly a million tons based mostly on increases for the United States, Pakistan, Burma, North Korea, and Peru. Global exports are lowered 0.5 million tons as projections are reduced for Pakistan and Burma which are partially offset by an increase for the United States. Notable changes in global imports include reductions for Iran and the Philippines. Global ending stocks are projected at 90.2 million tons, down 0.7 million from last month and 2008/09. Stocks are lowered for the United States, Iran, the Philippines, Thailand, and Burma, but raised for Pakistan.

OILSEEDS: U.S. soybean exports for 2009/10 are increased 25 million bushels this month. The strong shipment pace through March is projected to carry U.S. soybean exports to a record 1.445 billion bushels, 13 percent above the previous record set in 2008/09 despite an expected decline in exports for the remainder of the marketing year due to strong competition from South America. Seed use is raised to reflect record plantings for 2010 reported in the March 31 Prospective Plantings report. Residual use is reduced based on indications from the March 31 Grain Stocks report. U.S. soybean ending stocks remain unchanged at 190 million bushels.

The projected U.S. season-average soybean price range is narrowed 25 cents on both ends of the range to $9.20 to $9.70 per bushel. The projected soybean meal price range is narrowed $5 on both ends to $285 to $305 per short ton. The soybean oil price is projected at 33.5 to 36.5 cents per pound, unchanged from last month.

Global oilseed production for 2009/10 is projected at 436.7 million tons, up 1.4 million tons from last month. Higher soybean, peanut, and cottonseed production more than offsets lower rapeseed and sunflowerseed production. Global soybean production is increased 1.6 million tons to 257.5 million. Soybean production for Argentina is projected at 54.0 million tons, up 1 million from last month as favorable late-season weather further improves yield prospects. Soybean production for Brazil is projected at 67.5 million tons, up 0.5 million, also based on higher yields. Global rapeseed production is reduced 0.2 million tons to 59.4 million due to lower output in India. Other changes include reduced sunflowerseed production for India and Turkey, increased sunflowerseed production for Bolivia, increased peanut production for Argentina, and reduced peanut production for India.

Global 2009/10 oilseed ending stocks are raised 2.3 million tons to 74.1 million due mostly to higher soybean stocks in Brazil and Argentina. Combined October 1 stocks in Brazil and Argentina are projected 15.9 million tons above a year earlier at 43.8 million tons.

SUGAR: Projected 2009/10 sugar supply is increased 143,000 short tons, raw value, from last month, with higher beginning stocks and imports more than offsetting lower production. Imports are increased 130,000 tons to account for the tariff rate quota re-allocation and additional market incentives for quota holders to export to the United States. Cane sugar production in Florida is lowered 35,000 tons based on processor reports.

COTTON: This month’s U.S. cotton forecasts for 2009/10 show lower production and ending stocks. The production estimate is reduced 251,000 bales from last month based on USDA’s final Cotton Ginnings report, released March 25, 2010. With domestic mill use and exports unchanged, the lower production is reflected in ending stocks of 3.0 million bales, 200,000 below last month. The stocks-to-use ratio of 19.4 percent would be the smallest since 2003/04. The forecast range for the marketing-year average price received by producers of 61.5 to 65.5 cents per pound is raised 1 cent on the lower end of the range.

The world cotton forecasts for 2009/10 include small revisions which result in slightly lower ending stocks compared with last month. Beginning stocks are raised marginally, due mainly to prior year adjustments for India and Pakistan. World production is reduced about 500,000 bales, based on reductions for the United States, Australia, and Burkina Faso. World consumption is raised, reflecting increases for Brazil, India, Turkey, and Uzbekistan, partially offset by a reduction for Pakistan. Forecast ending stocks of 50.9 million bales are 44 percent of world consumption, which is the smallest world stocks-to-use since 1994/95.

Further Reading

- You can view the full report by clicking here.

April 2010