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World Agricultural Supply and Demand Estimates - July 2010

by 5m Editor
9 July 2010, at 12:00am

Broiler production is forecast higher for 2010 and 2011, while turkey and egg production forecasts are unchanged from last month, according to the USDA <em>World Agricultural Supply and Demand Estimates</em> for July 2010.

Livestock, Poultry and Dairy

Total US meat production forecasts for 2010 and 2011 are adjusted slightly. Cow slaughter remains relatively high boosting beef production in 2010. Higher forecast mid-year cattle placements are also expected to boost steer and heifer slaughter later in the year and into early 2011. Pork production is forecast higher for 2010 based on increased slaughter and heavier dressed weights, mainly during the second quarter. The June 1 Quarterly Hogs and Pigs report indicated that producers intend to have fewer sows farrow in the second half of 2010. Although largely offset by gains in pigs per litter, year-over growth in sows farrowing in 2011 is slower than previously forecast, and the 2011 pork production forecast is reduced slightly. Broiler production is forecast higher for 2010 and 2011. Hatchery data point toward continued growth in bird numbers and weights have been moving up. Turkey and egg production forecasts are unchanged from last month.

A slight increase is made to beef exports for 2010. Broiler exports for 2010 and 2011 are raised due to stronger shipments to a number of small markets and a resumption in exports to Russia.

Cattle and hog price forecasts for 2010 are reduced from last month as demand remains relatively weak in the face of higher production. The 2010 broiler price is adjusted to reflect second quarter prices. Prices for 2011 are unchanged. The turkey price forecasts for 2010 and 2011 are raised from last month in the face of continued tight supplies. The egg price forecasts are lowered for 2010 and 2011.

Forecast milk production for 2010 and 2011 is raised slightly from last month. Milk cow numbers have remained higher than expected and milk per cow is expected to increase more rapidly than previously forecast. Exports for 2010 are raised reflecting strong sales of dairy products but fat-basis exports for 2011 are unchanged from last month as production of fat-based products by competing exporters is expected to increase in 2011. However, the forecast of skim basis exports is raised for 2011 as nonfat dry milk (NDM) exports will likely reflect improving economic conditions. Fat-basis imports for 2010 and 2011 are forecast lower reflecting tight world supplies and growing international demand.

The Class III price forecast for 2010 is reduced on a lower cheese price forecast, but the Class IV price forecast is raised as the price forecast for butter is raised, more than offsetting a reduction in the NDM price. The 2011 forecast for butter is raised slightly but forecasts for other products are unchanged. The Class III and Class IV price forecasts are raised. The all milk price is forecast to average $15.80 to $16.10 per cwt for 2010 and $15.90 to $16.90 per cwt for 2011.

Wheat

US wheat supplies for 2010/11 are raised this month on higher area, yields, and carry-in. Beginning stocks are raised 43 million bushels based on the June 1 stocks estimate. Total wheat production is forecast 149 million bushels higher with higher forecast area and a forecast record yield of 45.9 bushels per acre. Winter wheat production is up 23 million bushels as higher Hard Red Winter wheat yields more than offset lower yields for Soft Red Winter wheat. Durum and other spring wheat production are forecast higher as abundant moisture and lack of heat stress in the Northern Plains support above trend yields. Feed and residual use is projected 20 million bushels lower as higher prices limit the competitiveness of wheat in livestock and poultry rations. Exports are projected 100 million bushels higher with lower expected production in several major exporting countries and strong early season export sales. Despite increased foreign demand for US wheat, ending stocks for 2010/11 are projected 102 million bushels higher and remain at an expected 23-year high. The season-average farm price for all wheat is projected at $4.20 to $5.00 per bushel, up 20 cents on each end of the range as tighter world supplies and higher corn prices support wheat values.

This month's 2009/10 changes reflect the latest export and seed use data and reported June 1 stocks. Projected exports are lowered 20 million bushels and estimated seed use is lowered three million bushels. Based on these changes, June 1 stocks indicate feed and residual use 21 million bushels lower. The 2009/10 wheat farm price is estimated at $4.87 per bushel, up two cents from last month's projection.

Global wheat supplies for 2010/11 are reduced with world production projected 7.5 million tons lower as smaller crops in FSU-12, Canada, EU-27, India and Turkey more than offset higher production in the United States and China. Production for Canada is lowered four million tons as persistent June rains limited seeding in the Western Prairies. Production is lowered 4.5 million tons and 3.0 million tons, respectively, for Russia and Kazakhstan as continued drought and high temperatures reduce yield prospects for spring wheat. EU-27 production is lowered 1.1 million tons reflecting early indications of lower-than-expected yields in northern Europe. India production is lowered 1.0 million tons on indications that heat during late grain fill reduced yields. Production is lowered 0.5 million tons for Turkey as early harvest results indicate disease has reduced expected yields. Production is raised 2.5 million tons for China where favorable June weather boosted harvested area and yields.

World wheat imports and exports are nearly unchanged for 2010/11, but substantial shifts are projected among the major exporting countries. Exports are reduced for Canada, Russia, Kazakhstan, and Turkey with lower production. Exports are raised for the United States, Australia, EU-27 and Ukraine. Global wheat consumption declines slightly with lower expected feeding in Canada, EU-27, Ukraine, and the United States mostly offset by increases for Russia and China. Global ending stocks are projected 6.9 million tons lower.

Coarse Grains

Projected US feed grain supplies for 2010/11 are lowered with reduced carry-in and lower projected production. Beginning stocks for corn are projected 125 million bushels lower reflecting higher use in 2009/10. With forecast harvested area down, corn production is lowered 125 million bushels, leaving supplies down 250 million bushels and 60 million below the 2009/10 record. Exports for 2010/11 are projected 50 million bushels lower as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of US corn. Ending stocks for 2010/11 are projected down 200 million bushels at 1,373 million, 105 million below the 2009/10 projection. The season-average farm price for corn is projected 15 cents higher on both ends of the range to $3.45 to $4.05 per bushel.

Other 2010/11 feed grains changes mostly reflect lower forecast area, which is partly offset by higher expected yields. Barley and oats yields, as reported in the July 9 Crop Production, are forecast above trend. Sorghum yields are raised to reflect adequate to abundant soil moisture in the southern and central Plains. Production, however, declines slightly for all three crops. Barley and oats imports are lowered with reduced supplies expected in Canada. Projected ending stocks are lowered for all three crops and farm prices are projected higher.

US corn use for 2009/10 is projected 125 million bushels higher as increased feed and residual use more than offsets a reduction for ethanol. Feed and residual use is projected 175 million bushels higher as June 1 stocks indicated higher-than-expected disappearance during the March-May quarter. Corn use for ethanol is lowered 50 million bushels reflecting the latest ethanol production data from the Energy Information Administration (EIA). Although daily ethanol disappearance set another record in April, daily production slipped below March's record pace. EIA's new weekly ethanol production data series (first reported for the week ending June 4) suggests June production, while up from April, will not reach the March pace.

Global coarse grain supplies for 2010/11 are projected 14.9 million tons lower with nearly half of the decline driven by reductions in carry-in and production in the United States. Global coarse grain production is lowered 10.8 million tons with barley, corn and oats production lowered 6.9 million tons, 3.4 million tons, and 0.9 million tons, respectively. Partly offsetting, is a 0.6-million-ton increase in EU-27 mixed grain production. Outside the United States, the biggest reductions are for Russia, Canada, EU-27 and Kazakhstan. Russia barley production is lowered 2.5 million tons as continued drought and high temperatures reduce yield prospects. Russia corn and rye production are lowered 0.5 million tons and 0.3 million tons, respectively. Canada barley and oats production are lowered 1.1 million tons and 0.9 million tons, respectively, as persistent June rainfall limited plantings. Barley production is lowered 2.4 million tons for EU-27 mostly reflecting lower reported area. Kazakhstan barley production is lowered 0.8 million tons as extended drought and high temperatures sharply reduce expected yields.

Global coarse grain imports and exports are nearly unchanged for 2010/11. Corn imports are lowered for Mexico with exports increased for Ukraine, partly offsetting the US export reduction. World barley imports and exports are raised slightly with shifts expected among exporting countries. Barley exports are reduced for Russia, Canada, and Kazakhstan, but raised for EU-27 and Australia. Global coarse grain consumption is lowered for 2010/11 mostly reflecting reduced barley and corn use in Russia and EU-27. Global coarse grain ending stocks for 2010/11 are projected sharply lower with world corn ending stocks down 6.2 million tons and barley ending stocks down 5.7 million tons. At the projected 180.2 million tons, coarse grain stocks would be the lowest since 2007/08.

Oilseeds

US oilseed production for 2010/11 is projected at 100.8 million tons, up 1.7 million tons from last month, with increased soybean production accounting for most of the change. Soybean production is projected at 3.345 billion bushels, up 35 million due to increased harvested area. Harvested area is estimated at a record 78 million acres in the June 30 Acreage report, 0.9 million above the June projection. The soybean yield is projected at 42.9 bushels per acre, unchanged from last month. Increased exports and crush offset increased supplies, leaving projected 2010/11 ending stocks at 360 million bushels, unchanged from last month. Higher soybean exports reflect increased import projections for China for 2010/11.

The US season-average soybean price for 2010/11 is projected at $8.10 to $9.60 per bushel, up 10 cents on both ends of the range. Soybean meal prices are projected at $240 to $280 per short ton, up 10 dollars on both ends. Soybean oil prices are projected at 34 to 38 cents per pound, unchanged from last month.

Global oilseed production for 2010/11 is increased 0.5 million tons to a record 440.7 million tons. Foreign oilseed production is projected down 1.2 million tons to 340 million mostly due to lower rapeseed production. Global soybean production is projected at a record 251.3 million tons, up 1.4 million due mostly to higher production in the United States. Soybean production is also raised for Canada based on higher planted area reported by Statistics Canada. Rapeseed production is sharply reduced for Canada due to lower harvested area. Despite a record planted area estimate reported by Statistics Canada based on producer surveys conducted in late May and early June, significant crop area in the provinces of Saskatchewan and Manitoba did not get planted due to excessive rainfall through late June. As a result, the Canada rapeseed crop is projected at 10.2 million tons, down 1.8 million from last month. Other changes include reduced rapeseed production for China and EU-27 and increased cottonseed production for the United States, Brazil and Uzbekistan.

US soybean exports for 2009/10 are projected at a record 1.46 billion bushels, up five million from last month in part reflecting additional sales to China. Crush is increased five million bushels to 1.745 billion due to stronger-than-expected domestic disappearance for soybean meal. Soybean ending stocks for 2009/10 are projected at 175 million bushels, down 10 million.

Further Reading

- You can view the full report by clicking here.


July 2010