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World Agricultural Supply and Demand Estimates – September 2011

by 5m Editor
12 September 2011, at 12:00am

While coarse grain stocks are expected to be lower this month, wheat stocks are projected to be up, according to the latest USDA <em>World Agricultural Supply and Demand Estimates</em>.

Livestock, Poultry and Dairy

The 2011 forecast of total red meat and poultry production is raised reflecting higher beef production but lower pork production. Continued large cow slaughter is expected to boost beef production. A slower pace of slaughter in the third quarter and slightly lower weights due to heat stress are expected to result in lower pork production compared to last month. USDA will release its Quarterly Hogs and Pigs report on 28 September, providing an estimate of sow farrowings in June-August and an indication of producer intentions for farrowings into early 2012. Broiler production is about unchanged as an increased forecast of third-quarter production is offset by lower expected production in the fourth quarter. No change is made to turkey production and only a slight revision is made to egg production.

For 2012, the beef production forecast is raised but pork and poultry production forecasts are reduced from last month. Larger forecast early year beef production reflects marketing of the large number of calves which are being placed as a result of drought in the Southern Plains. However, production in subsequent quarters will reflect tighter supplies of cattle and lighter expected carcass weights due to the placement of lighter cattle and relatively high feed prices. Pork forecasts are reduced as tight feed supplies dampen hog weights. Poultry production forecasts are reduced as relatively high feed costs limit the sector’s expansion. The egg production forecast is lowered due to lower hatching egg production.

Beef import forecasts are lowered in 2011 and 2012 as US cow slaughter remains relatively high. The beef export forecast for 2011 is little changed from last month as lower-than-expected second-quarter exports are largely offset by higher forecast exports in the second half of the year. The pork export forecast for 2011 is lowered as second-quarter exports were smaller than expected. The broiler export forecast is also reduced on lower-than-expected shipments in the second quarter. No change is made to red meat or poultry exports for 2012.

The cattle price for 2011 is about unchanged as a higher third-quarter price is offset by a lower fourth-quarter price. Cattle prices for 2012 are forecast slightly lower as larger marketings pressure cattle prices early in the year. Hog prices are raised slightly from last month for 2011 but are unchanged for 2012. Broiler prices are lowered for 2011 as supplies remain relatively large and demand relatively weak. Prices for 2012 are raised from last month on lower production.

The milk production forecast for 2011 is raised as the dairy herd has been expanding at a more rapid rate than expected. However, the forecast for 2012 is reduced as higher forecast feed prices reduce the rate of growth in milk per cow. Commercial exports for 2011 are raised on the strength of current product exports. For 2012, fat-basis exports are lowered, largely on slightly weaker butter exports. Skim solids imports are raised for both 2011 and 2012.

Cheese prices for 2011 are forecast lower but non-fat dry milk (NDM) and whey prices are forecast higher on the strength of relatively strong exports. Butter prices remain unchanged. The Class III price is lowered, based on the lower forecast cheese price, but the Class IV price forecast is unchanged from last month. For 2012, butter and cheese prices are unchanged but NDM and whey prices are forecast higher. The Class III price is unchanged, but the Class IV price forecast is raised. The all milk price forecast is lowered to $20.15 to $20.35 per cwt for 2011, but is unchanged at $17.80 to $18.80 per cwt for 2012.

Wheat

Projected US wheat ending stocks for 2011/12 are raised 990 million bushels this month with higher expected imports and lower expected food use and exports. Imports are raised 1 0 million bushels with larger supplies in Canada. Food use is projected five million bushels lower in line with revisions to 2010/11 based on the latest and final US Bureau of Census mill grind estimates and reflecting reduced prospects for per-capita flour consumption during calendar year 2011. Exports for 22011/12 are projected 775 million bushels lower with larger supplies and exports expected for Canada and the EU-27. The season-average farm price for all wheat is projected at $7.355 to $8.35 per bushel, up from last month’s range of $7.00 to $$8.20 per bushel, supported by higher corn prices.

Global wheat supplies for 2011/12 are projected 7.6 million tons higher mostly on larger beginning stocks in Canada and increased production for Canada, EU-27 and Ukraine. Beginning stocks for Canada are raised 1.3 million tons and production is raised 2.5 million tons, both reflecting the latest estimates from Statistics Canada. EU-27 production is raised 2.3 million tons with increases for Germany, Romania, France, Spain and Bulgaria as harvest reports and revisions to official estimates continue to indicate higher yields. Production for Ukraine is raised 1.0 million tons based on the latest harvest reports. Other smaller production changes include 0.2-million-ton increases for both Brazil and Morocco, and a 0.2-million-ton reduction for Uzbekistan.

World wheat trade is raised slightly for 2011/12 with increased imports projected for the United States and Uzbekistan. Global exports are also raised as higher expected shipments from Canada and EU–27 more than offset reductions for the United States and Turkey. Global wheat consumption is increased 1.9 million tons with higher expected wheat feeding in Canada, China, Morocco and Turkey more than offsetting a reduction for Russia. World wheat ending stocks for 2011/12 are projected 5.77 million tons higher at 194.6 million. At this level, global stocks would be up from 2010/11 and the second largest in the past decade.

Coarse Grains

US feed grain supplies for 2011/12 are projected lower this month with reduced corn production as summer heat and dryness continue to be reflected in survey-based yield forecasts. Corn production for 20111/12 is forecast 417 million bushels lower with expected yields down from last month across most of the Corn Belt. The national average corn yield is forecast at 148.1 bushels per acre, down 4.9 bushels from August and 16.6 bushels below the 2009/10 record. As forecast, this year’s yield would be the lowest since 20005/06. Despite the lower yield, production is forecast to be the third highest ever with the second highest planted area since 1944.

Total corn supplies for 2011/12 are lowered 4422 million bushels with a 20-million-bushel reduction in carrying and a five-million-bushel reduction in expected imports. Beginning stocks for 2011/12 drop with small increases in 2010/11 exports and use for sweeteners reflecting the latest available data. Imports for 22011/12 are reduced with the smaller forecast corn crop in Canada. Supplies for 2011/12 are projected to be the lowest since 2006/07.

Total corn use for 2011/12 is projected 400 million bushels lower with tighter supplies. Projected feed and residual use is reduced 20 million bushels, mostly reflecting lower expected residual disappearance with the smaller forecast crop. Corn use for ethanol is projected 100 million bushels lower with higher expected corn prices and continued weakening in the outlook for US gasoline consumption as forecast by the Energy Information Administration. Corn exports for 2011/12 are projected 100 million bushels lower with increased supplies and exports expected from Ukraine, Argentina and Brazil. US ending stocks are projected 42 million bushels lower at 672 million. The stocks-to-use ratio is projected at 5.3 per cent, compared with last month’s projection of 5.4 per cent. The season-average farm price is projected 30 cents per bushel higher on both ends of the range to a record $6.50 to $7.50 per bushel.

Global coarse grain supplies for 2011/12 are projected 3.1 million tons lower with larger barley, sorghum, millet and oats supplies only partly offsetting the reduction for corn driven by the US changes. Global corn supplies are reduced 4.5 million tons as increases in foreign beginning stocks and production partly offset the reduction in US supplies. Projected global corn production for 2011/12 is lowered 5.9 million tons as a 4.8-million-ton increase in expected foreign output is outweighed by the 10.6-million-ton US reduction. Brazil and Argentina production for 2011/12 are raised 4.0 million tons and 1.5 million tons, respectively, on higher expected area with rising returns for corn in both countries. Ukraine corn production is raised 1.5 million tons based on indications for higher yields. Production is raised 1.0 million tons for EU-27 with higher expected yields in France and several countries in Eastern Europe. Production is lowered 1.0 million tons for Canada based on the latest Statistics Canada estimates. Production is also lowered 2.1 million tons for Egypt as lack of government restrictions on planting resulted in a sharp shift in acreage away from corn and into rice.

Global coarse grain trade for 2011/12 is raised slightly with increased foreign trade in barley and corn more than offsetting the reduction in US corn shipments. Barley imports are raised for Saudi Arabia and Syria with larger shipments expected from Ukraine and Russia. Corn exports are raised for Ukraine, Argentina, Brazil and EU-27. Corn exports are lowered for Canada and Paraguay. Global corn consumption for 2011/12 is lowered 7.3 million tons, mostly reflecting lower expected use in the United States. Foreign corn feeding and consumption are nearly unchanged. World corn ending stocks are projected up 2.9 million tons with increases in South America, Ukraine and EU-27 more than offsetting the reduction projected for the United States.

Oilseeds

US oilseed production for 2011/12 is projected at 92.4 million tons, up 0.7 million from last month. Soybean production is projected higher, partly offset by declines for peanuts and cottonseed. Soybean production for 2011/12 is projected at 3.085 billion bushels, up 29 million due to higher yields. Soybean ending stocks are projected at 165 million bushels, up 10 million as higher supplies are only partly offset by increased exports. Other changes for 2011/12 include reduced food use of soybean oil reflecting increased use of canola and palm oil, increased use of soybean oil for biodiesel and reduced food use for 2010/11.

Soybean crush for 2010/11 is increased five million bushels to 1.65 billion reflecting higher-than-expected crush reported for July. With soybean exports unchanged, ending stocks are projected at 225 million bushels, down five million from last month. Other changes for 2010/11 include increased use of soybean oil for biodiesel and reduced food use. Soybean oil used for production of methyl ester was reported record high for July by the US Census Bureau. Soybean oil stocks are projected at 2.84 billion pounds, up slightly from last month.

Soybean and product prices are all projected higher for 2011/12. The US season-average soybean price is projected at $12.65 to $14.65 per bushel, up 15 cents on both ends of the range as higher corn prices provide support. Soybean meal prices are projected at $360 to $390 per short ton, up $5.00 on both ends of the range. Soybean oil prices are projected at 55.5 to 59.0 cents per pound, up 0.5 cents on both ends of the range.

Global oilseed production for 2011/12 is projected at 453.0 million tons, up 1.5 million tons from last month. Production increases for soybeans, rapeseed, sunflower seed and cottonseed are only partly offset by lower peanut production. Soybean production is projected higher for the United States and India. India’s soybean production is raised 0.7 million tons to a record 10.5 million due to higher planted area. Canola production for Canada is increased 0.6 million tons to a record 13.2 million based on higher area and yield reported in the most recent report from Statistics Canada. Harvested area is projected record high despite excessive rainfall and flooding in parts of Saskatchewan and Manitoba that prevented some area from being planted. Canada’s canola production is also raised for both the 2009 and 2010 crops based on the same report. Other changes include higher sunflower seed production for EU-27, higher cottonseed production for China, lower cottonseed production for Pakistan and lower peanut production for India.

Rice

US rice production in 2011/12 is forecast at 190.9 million cwt, up 2.8 million from last month due entirely to an increase in yield. Harvested area is estimated at 2.62 million acres, down 20,000 acres. The average yield is estimated at a record 7,273 pounds per acre, up 159 pounds per acre from last month. Long-grain production is estimated at 119.2 million cwt, down 4.9 million from last month, and the smallest crop since 1996/97. Combined medium- and short-grain production is estimated at a record 71.6 million, an increase of 7.7 million from last month.

All rice beginning stocks for 2011/12 are lowered 2.7 million cwt from last month to 48.4 million (rough-equivalent basis) based on USDA’s Rice Stocks report released on 26 August. The import projection is raised 1.0 million cwt to 19.0 million as it is expected that more long-grain rice will be imported due to tighter domestic supplies.

Exports for 2011/12 are projected at 93.0 million cwt, down 4.0 million cwt from last month, and down 18.6 million from the revised 2010/11 estimate. Long-grain exports are lowered 5.0 million cwt from last month to 61.0 million, and combined medium- and short-grain exports are raised 1.0 million to 32.0 million. The decrease in the export projection is due mostly to a much tighter supply situation but additionally to an expected increase in competition from South American exporters in Western Hemisphere long-grain markets. Long-grain exports to Iraq are also expected to be lower. Increased competition principally from Egypt is expected to reduce medium-grain exports to Libya. All rice ending stocks for 2011/12 are projected at 38.3 million cwt, up 5.1 million from last month but down 10.1 million from the revised 2010/11 stocks.

The long-grain season-average farm price range is projected at $13.50 to $14.50 per cwt, up 80 cents per cwt on both ends of the range from last month compared to $11.10 per cwt for 2010/11. The combined medium- and short-grain farm price range is projected at $15.00 to $16.00 per cwt, up 50 cents per cwt on each end of the range from last month compared to a revised $18.40 per cwt for 2010/11. The 2010/11 all rice season-average farm price is forecast at $14.00 to $15.00 per cwt, up 80 cents per cwt on each end of the range from last month compared to a revised $12.70 per cwt for 2010/11. The increase in prices is due to both expected tighter domestic supplies, for long-grain, and higher global prices as a result of government policies in Thailand aimed at supporting domestic rice prices. Additionally, higher commodity prices in general will help to support rice prices.

Projected global 2011/12 rice supply and use are increased from last month. Global rice production is projected at a record 458.4 million tons, up 2.1 million tons from last month, primarily due to larger expected crops in Brazil, China, the Philippines and the United States. China’s 2011/12 rice crop is increased 1.0 million tons to 139.0 million, due mainly to an increase in the early rice crop. Brazil’s rice crop is raised nearly one million tons due to both an increase in area and expected yield. The recent surge in global prices accounts for the increase in planted area in Brazil from last month’s forecast. Global 2011/12 trade is nearly unchanged from last month. Global consumption is raised 0.7 million tons from a month ago due mostly to China. Global ending stocks for 2011/12 are projected at 98.7 million tons, up 0.7 million from last month, and the largest stocks since 2002/03. Stocks are raised for Brazil, China, the Philippines and the United States.

Sugar

Projected US sugar supply for fiscal year 2011/12 is decreased 215,000 short tons, raw value, from last month, due to lower beginning stocks and production. Beet sugar production is lowered 175,000 tons based on lower forecast sugar beet production. Sugar use is unchanged.

Further Reading

- You can view the full report by clicking here.


September 2011