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12 June 2013

USDA WASDE - June 2013USDA WASDE - June 2013

USDA World Agricultural Supply & Demand Estimates

WHEAT: Projected U.S. wheat supplies for 2013/14 are raised this month with an increase in beginning stocks and higher forecast winter wheat production. Beginning stocks are higher with a 15-million-bushel reduction in 2012/13 exports as May shipments fell below expectations. Projected production for 2013/14 is up 23 million bushels as higher yields boost forecast production of Hard Red Winter wheat in the Southern and Central Plains and Soft Red Winter wheat across the South and Midwest. Exports are projected 50 million bushels higher for 2013/14 with strong early season sales and a reduced outlook for foreign production this month. Ending stocks for 2013/14 are projected down 11 million bushels. Projected stocks of 659 million bushels remain at a 5-year low. The projected range for the 2013/14 seasonaverage farm price is raised 10 cents on both ends to $6.25 to $7.55 per bushel. This is down from the record $7.80 per bushel expected for 2012/13. Global wheat supplies for 2013/14 are lowered 5.6 million tons reflecting lower foreign production. World production is projected at 695.9 million tons, down 5.2 million from last month with reductions for Ukraine, Russia, and EU-27. Persistent dry weather in key growing areas of southeastern Ukraine and adjoining areas of southern Russia reduces production prospects 2.5 million tons and 2.0 million tons, respectively. EU-27 production is lowered 1.3 million tons with small reductions in a number of member countries. Global wheat consumption for 2013/14 is reduced slightly with reductions in feed and residual use for EU-27, Russia, and Ukraine more than offsetting higher expected food use for India, Iran, and Egypt. Global wheat trade is raised with imports increased 1.0 million tons for Iran. Partly offsetting is a 0.5-million-ton reduction in imports for EU-27 with lower exportable supplies in Ukraine. Ukraine and Russia exports are lowered 1.5 million tons and 1.0 million tons, respectively. Export increases of 1.5 million tons for EU-27 and 0.5 million tons for Canada, combine with the U.S. increase this month to raise global exports 0.8 million tons. World ending stocks for 2013/14 are projected at 181.3 million tons, down 5.1 million from last month, and just above the level projected for 2012/13.

COARSE GRAINS: The outlook for 2013/14 U.S. feed grain supplies is lowered this month as delayed plantings reduce yield prospects for corn. Projected corn production is lowered 135 million bushels to 14.0 billion with the average yield projected at 156.5 bushels per acre, down 1.5 bushels from last month. Despite rapid planting progress during mid-May across the Corn Belt, rains and cool temperatures since have delayed the completion of planting in parts of the western Corn Belt and raised the likelihood that seasonally warmer temperatures and drier conditions in late July will adversely affect pollination and kernel set in a larger share of this year’s crop. With reduced production prospects, domestic corn usage is projected 70 million bushels lower for 2013/14. Projected feed and residual disappearance is lowered 125 million bushels with the smaller crop, higher expected prices, and increased availability of distillers’ grains. Corn used in ethanol production is raised 50 million bushels in line with an increase this month for the 2012/13 marketing year. Other food and industrial uses are also projected higher, up 5 million bushels from last month. Corn ending stocks for 2013/14 are projected 55 million bushels lower. At the projected 1.9 billion bushels, ending stocks are expected to be 2.5 times their 2012/13 level. The season-average farm price range for corn is raised 10 cents per bushel on each end to $4.40 to $5.20 per bushel. Increases are also projected for the sorghum, barley, and oats farm price ranges this month. Changes for 2012/13 include higher corn and oats imports, higher corn food, seed, and industrial use, and reduced corn exports. Corn imports are raised 25 million bushels based on the strong pace of imports to date and expectations that feeders in some locations will continue to supplement domestic supplies as old-crop corn becomes tighter during the summer months. Oats imports are raised 3 million bushels reflecting shipments to date. Corn used in ethanol production is raised 50 million bushels for 2012/13 based, in part, on higherthan- expected May ethanol production as indicated by weekly data reported by the Energy Information Administration. Favorable margins for ethanol producers and high prices for Renewable Identification Numbers (RINS) are also expected to moderate any slowdown in production through the end of the marketing year. Other food and industrial use is projected up 15 million bushels with increases projected for corn use in cereals and beverage and industrial alcohol. Corn exports are projected 50 million bushels lower based on the continued lackluster pace of shipments and sales. Projected corn ending stocks for 2012/13 are raised 10 million bushels. Global coarse grain supplies for 2013/14 are projected 4.3 million tons lower mostly on the reduction expected in U.S. corn output. Global coarse grain beginning stocks are also lowered as a reduction in 2012/13 China corn production is only partly offset by an increase in 2012/13 Brazil corn production this month. China corn production is lowered 2.4 million tons based on the latest government revisions for the 2012/13 crop. Brazil corn production is raised 1.0 million tons for 2012/13 based on higher reported area for the safrina crop which will be harvested in the coming weeks. Global 2013/14 coarse grain trade is raised slightly this month. Corn imports are raise for Indonesia and corn exports are raised for India. Global corn consumption is down 1.7 million tons mostly based on changes to domestic use in the United States. Global corn ending stocks for 2013/14 are projected 2.8 million tons lower with reductions for China and the United States partly offset by an increase for Brazil carried through from the larger 2012/13 crop. At the projected 151.8 million tons, 2013/14 world corn stocks would be up 27.5 million tons from 2012/13 and the largest in 12 years.

RICE: The 2013/14 all rice supply and use balance sheet is unchanged from last month. Small revisions are made to the 2013/14 rice by-class supply and use balance sheets. Rice by-class 2013/14 beginning stocks forecasts are changed based on small adjustments to 2012/13 rice by-class balance sheets. Long-grain rice 2013/14 beginning stocks are raised 1.0 million cwt to 21.4 million resulting from a reduction in the 2012/13 export forecast now projected at 76.0 million. Combined medium- and short-grain 2013/14 beginning stocks are lowered 1.0 million cwt to 10.5 million resulting from an increase in the 2012/13 export forecast now projected at 32.0 million. Rough rice exports for 2012/13 are lowered 1.0 million cwt to 35.0 million and combined milled and brown rice exports are raised 1.0 million to 73.0 million. No other changes are made to 2012/13 and 2013/14 U.S. rice supply and use balance sheets except for season-average farm price forecasts. The 2013/14 U.S. long-grain rice season-average farm price is projected at $13.90 to $14.90 per cwt, up 10 cents per cwt on each end from a month ago and compares to a revised $14.30 to $14.50 per cwt for 2012/13. The 2013/14 combined medium- and short-grain rice seasonaverage farm price is $15.80 to $16.80 per cwt, an increase of 30 cents per cwt on each end from last month and compares to a revised $16.00 to $16.20 per cwt for 2012/13. The 2013/14 U.S. all rice season-average farm price is projected at $14.50 to $15.50 per cwt, up 20 cents per cwt on each end from a month ago and compares to a revised $14.80 to $15.00 per cwt for 2012/13. Global 2013/14 rice supply and use is little changed from a month ago. Global rice production is projected at a record 479.2 million tons, down less than 100,000 tons from last month. Global 2013/14 exports are lowered 0.5 million tons to 38.4 million due to a decrease for Thailand. Thailand’s export forecasts for 2012/13 and 2013/14 are each lowered 0.5 million to 7.5 and 8.0 million, respectively. Thailand’s 2012/13 export pace has been slow due to uncompetitive prices and expectations that the current situation will continue into the new marketing year which begins in January 2014. Import forecasts for Nigeria are lowered both for 2012/13 and 2013/14. The imposition of high import tariffs by Nigeria and an expected larger 2013/14 rice crop will likely slow the pace of rice imports. Global 2013/14 consumption is lowered 0.3 million tons, primarily due to smaller consumption forecast for Nigeria. Global ending stocks for 2013/14 are projected at 108.6 million tons, up 0.8 million from last month, due primarily to an increase for Thailand.

OILSEEDS: U.S. soybean supply and use projections for 2013/14 are unchanged from last month. Changes for 2012/13 include increased soybean imports and crush, and reduced exports. Soybean imports are raised 5 million bushels to 25 million based on relatively strong imports through April and expected additional gains through the end of the marketing year. Soybean exports for 2012/13 are reduced 20 million bushels to 1.33 billion bushels reflecting exceptionally low shipments and sales in May and competition from Brazil. Although soybean exports are reduced, U.S. soybean meal exports are increased this month reflecting strongerthan- expected shipments this spring as importers have been slow to shift to South American supplies. As a result of increased soybean meal exports, the U.S. soybean crush is projected at 1.66 billion bushels, up 25 million. Soybean ending stocks for 2012/13 are projected at 125 million bushels, unchanged from last month. The 2013/14 season-average price for soybeans is forecast at $9.75 to $11.75 per bushel, up 25 cents on both ends of the range. The higher forecast reflects improved forward pricing opportunities and higher corn prices. Soybean meal prices for 2013/14 are forecast at $290 to $330 per short ton, up 10 dollars on both ends. The soybean oil price forecast is unchanged at 47 to 51 cents per pound.Global oilseed production for 2013/14 is projected at 490.8 million tons, down 0.5 million from last month. EU-27 rapeseed production is reduced 0.3 million tons to 19.7 million on lower area and yield, mainly for France. Other changes include reduced soybean production for Ukraine, reduced sunflowerseed production for the EU-27, and increased sunflowerseed production for Russia. Brazil’s 2012/13 soybean production is reduced 1.5 million tons to 82 million reflecting the impact of dry conditions in the northeast.

SUGAR: Projected U.S. sugar supply for fiscal year 2013/14 is increased 435,000 short tons, raw value, from last month due to higher beginning stocks and imports from Mexico. Imports from Mexico are increased based on Mexico’s higher carryover from the large 2012/13 crop. U.S. ending stocks for 2012/13 are up because higher imports from Mexico more than offset lower tariff rate quota imports. Mexico’s 2012/13 production is increased to reflect the strong pace of harvest to date. For both countries, 2013/14 use is unchanged from last month and ending stocks are increased.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2013 is raised from last month as higher beef and broiler production more than offsets lower pork production. Beef production is raised from last month as poor forage conditions have resulted in relatively large placements of cattle in feedlots in the first part of 2013 and cow slaughter remains high. Broiler slaughter is raised slightly for the third quarter, reflecting hatchery data. Pork production in second quarter is lowered based on the pace of hog slaughter and slightly lower expected carcass weights. USDA’s Quarterly Hogs and Pigs report will be released on June 28 and provide an indication of producer farrowing intentions for the remainder of the year. Turkey production is unchanged from last month. Egg production is raised, reflecting slightly higher table egg production in the third quarter. Red meat, poultry, and egg production forecasts for 2014 are unchanged from last month. Forecasts for 2013 beef exports are reduced from last month as trade to a number of markets has been relatively weak. Broiler exports are raised based on export strength to date. Pork exports are unchanged. Forecasts for 2014 are unchanged from last month. Cattle price forecasts for 2013 are lowered from last month, reflecting lower-than-expected prices to date. Broiler prices are raised, reflecting strong domestic and export demand. Hog prices are raised as tighter supplies have pushed prices higher. Price forecasts for 2014 are unchanged. The milk production forecast for 2013 is unchanged. For 2014, the production forecast is lowered as relatively weak milk-to-feed ratios in the third and fourth quarter of 2013 are expected to slow production growth in the first half of 2014. Fat basis exports for 2013 are lowered based on slow butter exports through April. Skim-solid exports are higher based on expectations of continued robust nonfat dry milk (NDM) exports. Fat and skim basis exports for 2014 are unchanged. Fat basis imports are raised for 2013 and 2014. Forecasts for 2013 cheese and butter prices are lowered from last month, reflecting greater stocks and weaker-than-expected prices to date. The NDM price is raised on tightening supplies and expectations of continued robust export demand. The price range for whey is narrowed. As a result of the lower cheese price forecast, the Class III price is reduced. The Class IV price is down as lower butter prices more than offset higher NDM. For 2014, the butter price forecast is lowered as stocks remain high, but other product prices are unchanged.The Class III price forecast is unchanged, but the Class IV price is lowered. The all milk price is forecast at $19.60 to $20.00 per cwt for 2013 and $18.95 to $19.95 for 2014.

COTTON: The 2013/14 U.S. cotton supply and demand balance sheet shows lower beginning and ending stocks, lower production, and higher prices relative to last month. The 2012/13 export estimate is raised 350,000 bales to 13.6 million, reducing the current season’s ending stocks forecast. This adjustment reflects continued strong sales and shipments and expected higher imports by China. At the same time, projected U.S. production for 2013/14 is reduced to 13.5 million bales for 2013/14, as abandonment is raised to reflect continued drought conditions in the Southwest. With the total 2013/14 supply 900,000 bales below last month, U.S. exports are reduced 500,000 bales to 11.0 million and ending stocks are reduced to 2.6 million, the equivalent of 18 percent of total use. The projected range for the marketing-year average price of 73 to 93 cents per pound is raised 5 cents on each end, with a midpoint of 83 cents per pound, 15 percent above the estimated average for 2012/13. This month’s changes to the world cotton estimates for both 2012/13 and 2013/14 result primarily from a sharp increase of 1.75 million bales in China’s 2012/13 imports to a level of 20.0 million. Higher imports by China in the current season are drawing stocks out of exporting countries and constraining the 2013/14 supply outside of China available for global consumption and trade. World production in 2013/14 is reduced slightly from last month, based on lower production for the United States, Turkmenistan, and others; world consumption also is reduced slightly. China’s imports are reduced 1.0 million bales from last month to 11.0 million, accounting for most of the change in the world trade, as higher China imports in 2012/13 raise beginning stocks and domestic supplies. Projected world 2013/14 ending stocks are reduced marginally, but China’s stocks are raised 750,000 bales, leaving projected stocks outside of China about 3 percent lower. These projections assume that China continues current policies regulating the national reserve acquisition and release prices.

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