The Weekend Fix
Some things to think about.
U.S. Corn Highlights - 2.273 billion bushel carryout
This month’s 2017/18 U.S. corn outlook is for lower supplies, reduced feed and residual use and exports, and a decline in ending stocks. Corn production is forecast at 14.2 billion bushels, down 102 million from the July projection. The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 1.2 bushels lower than last month’s trend-based projection. This month’s Crop Production report indicates that South Dakota, Iowa, Minnesota, and Illinois are forecast to have yields below a year ago. The projected yield for Indiana is unchanged relative to last year, while Nebraska and Ohio are forecast higher. Sorghum production is forecast 13 million bushels higher with the forecast yield 2.6 bushels per acre above last month’s projection.
Projected feed and residual use for 2017/18 is lowered 25 million bushels on a smaller crop. Exports are forecast down 25 million bushels, reflecting the increased competitiveness of supplies in Argentina and Brazil and the low level of new-crop outstanding sales. With supplies falling faster than use, ending stocks are reduced 52 million bushels. The projected range for the season-average corn price received by producers is unchanged at $2.90 to $3.70 per bushel.
2017/18 Corn Stocks to Use at 15.90%
World Corn ending stocks up slightly at 200.87 MMT
This month’s 2017/18 foreign coarse grain outlook is for virtually unchanged production, lower trade, and greater stocks relative to last month. EU corn and barley production are reduced. Canada corn production is down on lower projected harvested area. Corn and barley production forecasts are raised for Russia based on higher corn area and favorable growing conditions for barley. Ukraine corn production is unchanged as a reduction in projected yield is offset by increased area.
For 2016/17, corn production is increased for Brazil based on second crop corn harvest results to date. Major global corn grain trade changes for 2017/18 include corn export reductions for the EU, Serbia, and Canada. More than offsetting are increases for Ukraine and Russia. Brazil’s corn exports are raised for 2016/17 based on record-high shipments observed for the local marketing year beginning in March 2017. Corn imports for 2017/18 are raised, mostly reflecting increases for the EU and Iran. Foreign corn ending stocks are raised from last month. Historical revisions are made to corn stock estimates for Ukraine to better reflect statistics published by the government.
U.S. Soybean Highlights - production up 121 m bushel
U.S. oilseed production for 2017/18 is projected at 130.9 million tons, up 3.9 million from last month mainly due to higher soybean production. Soybean production is forecast at 4,381 million bushels, up 121 million on higher yields. Harvested area is forecast at 88.7 million acres, unchanged from July. The first survey-based soybean yield forecast of 49.4 bushels per acre is 1.4 bushels above last month but 2.7 below last year’s record. With higher production and lower beginning stocks, soybean supplies for 2017/18 are projected at 4,777 million bushels, up 2 percent from last month. U.S. soybean exports are raised 75 million bushels to 2,225 million on increased supplies and lower prices. Crush is reduced on lower global soybean meal import demand. Soybean ending stocks are projected at 475 million bushels, up 15 million from last month.
The U.S. season-average soybean price for 2017/18 is forecast at $8.45 to $10.15 per bushel, down 10 cents at the midpoint. The soybean meal price forecast of $295 to $335 per short ton is down $5.00 at the midpoint. The soybean oil price is forecast at 31 to 35 cents per pound, up 1 cent on both ends of the range. U.S. changes for 2016/17 include higher exports, lower crush, and lower ending stocks. Soybean exports are raised 50 million bushels to 2,150 million on outstanding export sales and shipments through July. With lower crush only partly offsetting higher exports, ending stocks are projected at 370 million bushels, down 40 million from last month.
World Soybean Highlights - World Stocks Climb
Global oilseed production for 2017/18 is projected at 576.7 million tons, up 2.8 million, mainly on a 2.3-million-ton increase for soybean production. The higher U.S. forecast was partly offset with a 1.5-million-ton reduction for India based on the latest government planting data indicating lower harvested area. Soybean and canola production is projected down for Canada, where hot and dry weather conditions in the Canadian Prairies lowered yield prospects for both crops, and excessive rainfall in eastern Canada led to a lower soybean harvested area estimate. Other changes include increased sunflowerseed production for Russia, increased rapeseed production for the EU, and lower peanut production for India. Global soybean exports for 2017/18 are up 1.5 million tons as higher U.S. exports are partly offset by lower Argentina shipments. Beginning stocks for 2017/18 are raised based on lower crush and exports for Argentina for 2016/17. Coupled with higher production, 2017/18 soybean ending stocks are increased 4.3 million tons to 97.8 million.
Summary by Chris Benson
source: USDA WADSE
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