News

Highlights from USDA’s November supply and demand report

The USDA raised its domestic ending stocks guess for corn and reduced the number for soybeans, largely because of production expectations, while U.S. wheat ending stocks were down slightly from October on better export demand.

2017/18 U.S. wheat ending stocks are now seen at 935 million bushels, compared to 960 million in October and 1.181 billion for 2016/17. The USDA raised the export outlook 25 million bushels, the sole adjustment to the balance sheet. The average 2017/18 farm price is estimated at $4.40 to $4.80 per bushel, unchanged from a month ago and above the previous marketing year’s average of $3.89.

2017/18 U.S. corn ending stocks are projected at 2.487 billion bushels, compared to 2.340 billion last month and 2.295 billion last marketing year. The USDA raised the production outlook to 14.578 billion bushels, putting total supply at 16.922 billion. The feed and residual use estimate was increased 25 million bushels to 5.575 billion and exports were hiked 75 million bushels to 1.925 billion, for total use of 14.435 billion bushels. The average 2017/18 farm price is estimated at $2.80 to $3.60 per bushel, the same as October. The 2016/17 average was $3.36.

2017/18 U.S. soybean ending stock are pegged at 425 million bushels, compared to 430 million a month ago and 301 million a yaer ago. The USDA lowered production 6 million bushels to 4.425 billion, for a total supply of 4.752 billion bushels. There were no other changes to the balance sheet. The average 2017/18 farm price is estimated at $8.45 to $10.15 per bushel, compared to $8.35 to $10.05 last month and $9.47 last marketing year.

2017/18 world wheat ending stocks are seen at 267.53 million tons, compared to 268.13 million in October. The production estimate was raised slightly to 751.98 million tons, with higher expectations for the European Union, Russia, and the dozen smaller former Soviet states cancelling out lowered outlooks for Brazil and Pakistan. The domestic feed use guess is 140.77 million tons, compared to 141.49 million a month ago, with exports at 180.68 million tons, compared to 180.04 million last month.

2017/18 world corn ending stocks are projected at 203.86 million tons, compared to 200.96 million a month ago. Production was raised more than 5 million tons to 1.044 billion, on bigger projections for the U.S. and the European Union, which offset lower outlooks for Southeast Asia, Ukraine, and the dozen smaller former Soviet states. Domestic feed use is pegged at $652.23 million tons, compared to 650.48 million last month, and exports are expected to be 151.61 million tons, compared to 150.71 million in October. The USDA raised the export guess for the U.S., while lowering their guesses for Ukraine and those other dozen smaller former Soviet states.

2017/18 world soybean ending stocks are currently pegged at 97.90 million tons, compared to 96.05 million last month. The guess on global production was raised a little more than a million tons to 348.89 million, with an increased expectation for Brazil cancelling out a slight reduction for the U.S. Domestic crush demand is seen at 301.98 million tons, compared to 301.25 million in October, with exports at 152.43 million tons, compared to 150.97 million a month ago. The USDA upped export projections for Brazil and Paraguay and the import guess for China was raised 2 million tons to 97 million.

The USDA lowered its 2017 production projections for beef, pork, eggs, and turkey, but raised the estimate for chicken.

The beef outlook is down from October at 26.4 billion pounds because of expected slower fed cattle marketings during the fourth quarter, along with lighter carcass weights. The 2017 steer price estimate is now $121.80 per hundredweight, up more than $2 from a month ago. Imports and exports were both up on the month.

Pork production is reduced to 25.740 billion pounds with a fourth quarter slow down in commercial slaughter cancelling out heavier average weights. The annual barrow and gilt price outlook is $49.01 per hundredweight, unchanged on the month. The USDA lowered import and export guesses for pork.

The broiler chicken production outlook is up to 41.540 billion pounds because of a higher third quarter slaughter number, with a price projection of $.938 per pound, steady with last month. Broiler import and export estimates were both down from November. The turkey production outlook is lower at 5.997 billion pounds because of a slower third quarter kill, with the price guess of $.966 per pound, down more than $.02 from October.

Egg production is seen at 8.771 billion dozen, a little lower than a month ago, with an average price of $.947 per dozen, up $.02. Imports were down on the month, while exports were higher.

The USDA has lowered its 2017 U.S. milk production estimate, from 216.2 billion pounds in October to 215.8 billion in November. The department expects a slower growth in average per cow production, along with a smaller herd, during the late stages of the year. Import and export projections for both the fat basis and the skim basis were also reduced from October’s expectations.

Price outlooks  for dairyare mixed, with Class III unchanged at $16.15 to $16.25 per hundredweight with a higher cheese price canceled out by a lower price for whey, Class IV down to $15.10 to $15.30 on lower butter and nonfat dry milk prices, and a lower all milk price at $17.65 to $17.75. The USDA now has a 2017 cheese price range of $1.630 to $1.640 per pound and sees butter at $2.325 to $2.355, with nonfat dry milk at $.86 to $88 and dry whey at $.44 to $.45.