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USDA lowers soybean ending stocks, red meat production estimates

 

The USDA has tightened the 2017/18 U.S. ending stocks projection for soybeans, while raising outlooks for corn and wheat. The current domestic marketing year runs through May for wheat, August for corn and soybeans, and September for soybean products.

For soybeans, the domestic crush estimate was up 10 million bushels from March at a record 1.97 billion, with higher meal prices supporting margins, while seed and residual use expectations were a little bit lower, at 30 million bushels and 103 million, respectively. 2017/18 U.S. soybean ending stocks are now projected at 550 million bushels. The average 2017/18 farm price is estimated at $9.10 to $9.50 per bushel, compared to $9 to $9.60 in March and the average of $9.47 for 2016/17.

2017/18 soybean oil ending stocks are seen at 1.966 billion pounds, up 215 million on the month with higher production and exports cancelling out lower biodiesel use expectations. The estimated 2017/18 farm price is estimated at $.305 to $.325 per pound, compared to $.3 to $.33 a month ago and $.3248 for the previous marketing year.

2017/18 soybean meal ending stocks are pegged at 300,000 short tons. Higher projections for production and imports were canceled out by increased expectations for domestic and export demand. The average 2017/18 farm price is estimated at $340 to $360 per short ton, compared to $325 to $355 last month and $316.88 last year.

Corn ending stocks were up 55 million bushels at 2.182 billion following downward revisions for feed and residual and food, seed, and industrial use, now at 5.5 billion bushels and 7.040 billion, respectively. The USDA left the ethanol use projection unchanged at 5.575 billion bushels. The average 2017/18 farm price is estimated at $3.20 to $3.50 per bushel, compared to $3.15 to $3.55 a month ago and $3.36 a year ago.

Wheat ending stocks were 30 million bushels higher at 1.064 billion on a lower feed and residual use outlook, now at 70 million bushels. The average 2017/18 farm price is estimated at $4.60 to $4.70 per bushel, unchanged from last month and above the $3.89 average last year.

The USDA slashed its soybean production estimate for Argentina and increased the projection for Brazil. Argentina’s crop is now seen at 40 million tons, down 7 million from March, following drought or near drought conditions in many of their highest producing areas, and the number could fall further as harvest continues. The USDA also reduced Argentina’s export outlooks for soybeans and soybean products, while raising meal and oil export expectations for the U.S. Brazil’s bean crop is now pegged at a record 115 million tons, because of generally much better conditions during planting, development, and harvest. The USDA also increased its soybean export estimate for Brazil. Chinese soybean imports were unchanged at 97 million tons. World soybean ending stocks are currently projected at 90.8 million tons, compared to 94.4 million in March.

The USDA lowered its South American corn production estimates. Argentina was reduced 3 million tons to 36 million because of drought or near drought conditions, while Brazil’s estimate was down 2.5 million tons on the month at 92 million following second crop planting delays. The USDA also lowered South American corn export projections. Global corn stocks are seen at 197.78 million tons, compared to 199.17 million a month ago.

World wheat ending stocks are projected at 271.22 million tons, compared to 268.89 million last month. A higher world production estimate and bigger beginning stocks canceled out a slight increase in domestic feed use.

The USDA has lowered its 2018 domestic red meat production outlooks. The beef production estimate was down 50 million pounds from March at 27.635 billion on a slower slaughter pace for the first half of the year and lighter weights, and the pork projection was lowered 105 million pounds to 26.805 million, with the USDA expecting a reduced kill schedule and lighter carcass weights in the coming months. The USDA also reduced per capita consumption estimates for both beef and pork, along with pork exports, specifically citing a slowdown in sales to China. The price outlooks were lowered on those slower demand expectations, with beef now at $114 to $119 per hundredweight and pork at $45 to 47, respectively.

The USDA has reduced 2018 poultry production expectations because of recent slower hatchery numbers. Broiler chickens are now pegged at 42.35 billion pounds, down 250 million, with turkey at 5.975 billion pounds, 30 million lower. The department also lowered per capita consumption estimates for broilers and turkeys, while leaving exports unchanged. The broiler price projection was up from March as the USDA anticipates strong first quarter demand to carry over into subsequent quarters, while turkey prices were down on comparatively slower demand expectations. Broilers are now projected at $.93 to $.98 per pound, with turkeys at $.82 to $.86 per pound.

The USDA’s next set of supply and demand estimates is out May 10th.

USDA’s Office of the Chief Economist