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World Agricultural Supply and Demand Estimates - June 2010

by 5m Editor
11 June 2010, at 12:00am

While the US broiler production forecast for 2011 remains unchanged, the turkey production estimate has been raised slightly, according to the USDA <em>World Agricultural Supply and Demand Estimates</em> for June 2010.

Livestock, Poultry and Dairy

Forecast total US meat production for 2010 is reduced slightly. The production forecasts for 2010 largely reflect lower cattle slaughter and lighter cattle carcass weights in the second quarter and lower expected slaughter in the fourth quarter. Hog slaughter is also reduced for the second and third quarters, but slightly heavier carcass weights partially offset the decline in second-quarter slaughter. Changes in the broiler and turkey production forecasts for 2010 reflect slight revisions to the first quarter. Total meat production for 2011 is raised fractionally. There are no changes to the beef and pork forecasts for 2011. The turkey production forecast for 2011 is raised slightly but broiler production is unchanged.

Changes in red meat and turkey imports and exports for 2010 reflect first-quarter trade data. Broiler exports for 2010 are raised as sales to a number of markets have been stronger than expected. Trade forecasts for 2011 are unchanged.

Cattle and hog price forecasts for 2010 are reduced from last month as demand has slackened. Broiler and turkey price forecasts are raised from last month. The egg price forecast is lowered. Price forecasts for 2011 are unchanged from last month.

Forecast milk production for 2010 is raised slightly from last month reflecting a slower decline in cow numbers and stronger expected growth in milk per cow. Milk production for 2011 is unchanged. Exports for 2010 and 2011 are raised on both a fat and skim solids basis. Product exports were higher than expected in the first quarter of 2010, and with generally tight world supplies, US exports are expected to remain strong into 2011. Import forecasts are lowered for 2010 and 2011. Imports are reduced largely because of smaller-than-expected cheese imports in the first-quarter 2010 and expectations that imports will remain weak into 2011 due to relatively low US prices and tight world supplies.

The Class III price forecast for 2010 is reduced slightly on lower cheese and whey price forecasts. Cheese stocks remain high and international whey prices are weaker. The Class IV price forecast for 2010 is raised on higher butter and nonfat dry milk (NDM) price forecasts. The all milk price for 2010 is forecast to average $15.75 to $16.15 per cwt. The 2011 forecasts for Class III and IV prices and the all milk price are raised. Improving domestic and export demand is expected to support NDM prices. The cheese price forecast is raised as higher butter/powder values are expected to divert milk from cheese production. Coupled with higher forecast exports and lower imports, tighter supplies are expected to support prices. The all milk price forecast for 2011 is raised to $15.80 to $16.80 per cwt.

Wheat

US wheat supplies for 2010/11 are increased slightly this month as higher production is mostly offset by lower carry-in. Winter wheat production is forecast 24 million bushels higher mostly on higher hard red winter wheat. Winter wheat yields were raised in the central and northern Plains and in the Pacific Northwest. Beginning stocks are projected 20 million bushels lower as strong exports of wheat, flour and products during the final weeks of the old-crop marketing year boost 2009/10 exports 20 million bushels. Domestic use for 2010/11 is projected 10 million bushels higher as lower prices encourage more wheat feeding. Ending stocks for 2010/11 are projected six million bushels lower but remain up year-to-year and the highest since 1987/88. The season-average farm price for all wheat is projected at $4.00 to $4.80 per bushel, down from $4.10 to $5.10 per bushel last month. Recent declines in futures prices and lower-than-expected protein levels in hard red winter wheat have sharply reduced price prospects for many producers.

Global wheat supplies for 2010/11 are projected 4.1 million tons lower this month with reduced carry-in and production. Lower beginning stocks mostly reflect reductions for EU-27, the United States and Brazil as 2009/10 exports are raised for all three. Global production for 2010/11 is lowered 3.7 million tons with reductions for EU-27, Syria, Turkey and Russia. EU-27 production is lowered 2.1 million tons reflecting crop damage from recent flooding and heavy rains in eastern Europe and April and May dryness in north-west France and the United Kingdom. Production for Syria and Turkey are lowered 1.3 and 1.0 million tons, respectively, as widespread outbreaks of yellow rust have sharply reduced yield prospects in key growing areas of both countries. Russia production is lowered 0.5 million tons as reports of higher-than-expected winter kill, particularly in the Volga Valley, reduce potential harvested area. Production is raised 0.5 million tons for Ukraine as recent rains have improved yield prospects.

Global wheat trade for 2010/11 is raised with world imports up 2.0 million tons. Import increases include Syria, Turkey, Afghanistan and Bangladesh. Exports are raised for Kazakhstan, Australia, Ukraine and India. World wheat consumption is nearly unchanged as a 1.0-million-ton increase in China wheat feeding is offset by the same size reduction for EU-27. Wheat consumption is also lowered for Iraq and Brazil but raised for Afghanistan. Global ending stocks are projected 4.2 million tons lower at 193.9 million tons. Global ending stocks for 2010/11 are expected to be up 1.0 million tons from beginning stocks.

Coarse Grains

Projected US feed grain production for 2010/11 is unchanged, but smaller carry-in for corn, sorghum and barley is expected to reduce domestic feed grain supplies. Corn food, seed and industrial (FSI) use is projected 110 million bushels higher for 2010/11, mostly in line with higher projected corn use for ethanol, sweeteners and starch for 2009/10. Higher use, combined with lower beginning stocks, drops projected 2010/11 corn ending stocks 245 million bushels to 1,573 million. The season-average farm price for corn is projected 10 cents higher on both ends of the range to $3.30 to $3.90 per bushel. Projected 2010/11 farm prices for the other feed grains are also raised.

US corn use for 2009/10 is projected 135 million bushels higher as increased FSI use more than offsets a reduction in expected feed and residual use. Corn use for ethanol is raised 150 million bushels reflecting the continued record pace of ethanol production and usage through March based on the latest data from the Energy Information Administration (EIA). Higher ethanol production is also supported by record production of gasoline blends with ethanol as indicated by weekly data from EIA through May and forecasts for rising gasoline demand during the summer driving season. Corn use is raised five million bushels each for starch and glucose/dextrose as the gradual economic recovery spurs production of these products. Feed and residual use is lowered 25 million bushels with increased availability of distillers’ grains.

US corn ending stocks for 2009/10 are projected 135 million bushels lower. At 1,603 million bushels, this year’s ending stocks would be down 70 million from 2008/09. The projected 2009/10 farm price for corn is lowered five cents on both ends of the range to $3.45 to $3.65 per bushel based on prices reported to date. Other 2009/10 feed grain changes include a 10-million-bushel increase in projected sorghum exports, a three-million-bushel reduction in barley imports, and a three-million-bushel increase in oats imports. The 2009/10 sorghum farm price is lowered in line with that for corn.

Global coarse grain supplies for 2010/11 are projected 5.3 million tons lower with the largest share of the decline resulting from lower expected corn carry-in in the United States. Global coarse grain production for 2010/11 is lowered 1.4 million tons as higher corn production is more than offset by reductions in barley, oats, rye and mixed grains mostly reflecting reduced crop prospects in EU-27. Flooding in eastern Europe and dryness during April and May in France have reduced expected coarse grains yields in these regions. Global corn production is raised 0.7 million tons as a 1.5-million-ton increase for Ukraine, based on higher reported area, is only partly offset by reductions for Mexico and EU-27. Production is lowered 0.5 million tons for Mexico as dryness has persisted in eastern and central growing areas during May. EU-27 corn production is lowered 0.3 million tons as heavy May rains have delayed field work, reducing expected area and yields in eastern Europe.

Global corn trade is raised for both 2009/10 and 2010/11. Higher corn trade for 2009/10 reflects increased imports by China and Viet Nam and higher exports by Argentina. Higher corn trade for 2010/11 is based on higher expected imports by Mexico, Viet Nam and the Philippines. Exports for 2010/11 are raised for Argentina and Ukraine. Global corn consumption is raised four million tons for 2010/11 mostly reflecting higher use in the United States. Corn feeding is also raised for Ukraine and Viet Nam. With reduced carry-in and increased consumption, global corn ending stocks are projected down 6.9 million tons. At 147.3 million tons, stocks are up 3.9 million tons from 2009/10, but just below those for 2008/09.

Oilseeds

This month's US oilseed supply and use projections for 2010/11 include a small reduction in beginning and ending stocks. Lower beginning stocks reflect higher crush projections for 2009/10. Soybean crush for 2009/10 is raised five million bushels to 1.74 billion reflecting an increase in projected soybean meal exports. Soybean meal exports are projected at record 11.5 million short tons, almost two million above the previous record set in 1997/98.

Lower domestic soybean meal consumption partly offsets the increase in exports. Soybean ending stocks for 2009/10 are projected at 185 million bushels, down five million from last month. Ending stocks for 2010/11 are also reduced five million bushels to 360 million.

Soybean, meal and oil price projections are unchanged this month. The US season-average soybean price for 2010/11 is projected at $8.00 to $9.50 per bushel. Soybean meal and oil prices for 2010/11 are projected at $230 to $270 per short ton and 34 to 38 cents per pound, respectively.

Global oilseed production for 2010/11 is projected at 440.2 million tons, up 0.3 million from last month, mainly due to higher peanut production. China’s peanut production is raised 0.9 million tons to 14.8 million tons based on higher area and yield. EU-27 rapeseed production is reduced 0.5 million tons to 21 million mainly due to lower area resulting from flooding, especially in Poland, in May. Other changes include increased soybean production for Ukraine, and reduced soybean production for China based on lower area. Brazil's 2009/10 soybean production is increased one million tons to a record 69 million reflecting increased harvested area and record yields.

Further Reading

- You can view the full report by clicking here.

June 2010