Tuesday, May 12, 2020

USDA: "World Agricultural Supply and Demand Estimates" May 12, 2020 (WASDE)

From AgWeb, May 12: 

WASDE Projects Record Corn Crop, Lower Soybean Ending Stocks
WHEAT:  The initial outlook for 2020/21 U.S. wheat is for smaller supplies, decreased domestic use, lower exports, and reduced stocks.  Supplies are decreased by 121 million bushels from 2019/20 on lower carry-in stocks and smaller production.  The 2020/21 U.S. wheat crop is projected at 1,866 million bushels, down 3 percent from last year on lower yields offsetting higher harvested acreage.  The all-wheat yield is projected at 49.5 bushels per acre, down 2.2 bushels from last year.  The first 2020 NASS survey-based winter wheat production forecast of 1,255 million bushels is down 4 percent from 2019, on lower Hard Red Winter and White Winter production.  Total 2020/21 domestic use is projected down nearly 3 percent on reduced feed and residual use as record-large 2020/21 corn supplies are expected to displace wheat for feeding.  Higher food use is partially offsetting as 2020/21 is projected up 2 million bushels to 964 million, up from a revised 2019/20 estimate of 962 million, which was raised 7 million this month.  The NASS Flour Milling Products report, issued on May 1, indicated an unusually large volume of wheat was ground for flour in the first quarter of 2020.  Exports for 2020/21 are projected at 950 million bushels, down 20 million from the revised 2019/20 exports.  Greater global 2020/21 export competition is expected for the United States with several major exporters projected having larger supplies.  Projected 2020/21 ending stocks are 69 million bushels lower than last year at 909 million.  The projected season-average farm price is $4.60 per bushel, unchanged from last year as the outlook for low U.S. corn prices is expected to restrain 2020/21 U.S. wheat prices.

The initial outlook for 2020/21 international wheat is for larger supplies, increased trade, greater consumption, and higher ending stocks.  Foreign supplies are projected to increase 23.2 million tons to 982.4 million as several major exporters (Argentina, Australia, Canada, and Russia) are projected to have higher production for 2020/21.  Australia is projected with the largest increase from last year to 24.0 million tons, up 8.8 million as it recovers from a multi-year drought.  Conversely, the EU is projected to decline nearly 12 million tons to 143 0 million on lower harvested area and yields.  Ukraine production is also projected lower at 28.0 million tons, but this would still be the second-largest production on record.

Projected 2020/21 global trade is 4.6 million tons, or more than 2 percent higher, at a record-high 188.0 million on greater exportable supplies.  Imports are projected to rise, primarily on increased demand by China, Algeria, Morocco, the EU, Iraq, and Uzbekistan.  Russia is projected as the 2020/21 leading world wheat exporter at 35.0 million tons with Argentina, Australia, and Canada also projected higher while the EU, Ukraine, and United States are lower.  Projected 2020/21 world consumption is increased 4.9 million tons to a record-large 753.5 million as higher food, seed, and industrial use more than offsets reduced feed use on greater global corn supplies.  Projected 2020/21 world ending stocks increased 5 percent to a record-large 310.1 million tons with China accounting for 52 percent of the total.

COARSE GRAINS:  The U.S. feed-grain outlook for 2020/21 is for record high production and domestic use, greater exports, and larger ending stocks.  The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and a return to trend yield.  The yield projection of 178.5 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period.  Despite beginning stocks that are down slightly from a year ago, total corn supplies are forecast record high at 18.1 billion bushels. ....MUCH MORE
Not as bad as feared. Here's the complete report (40 page PDF)
And here is the reaction in the corn market:


322.25 up 3.75.
 
A couple weeks ago, with the price bouncing around 3.12 -3.13 (and dipping to 3.10!) I'd have sworn we'd see sub-3.00 as a dandy entry point now we pray for good weather and knee high by the fourth of June.
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