WASDE Leaves Corn, Soybeans Unchanged
From USDA:
WHEAT: The supply and demand outlook for 2020/21 U.S. wheat is mostly unchanged this month but there are offsetting by-class changes to exports and imports. White wheat exports are raised on continued strong sales and shipments to China and South Korea. Conversely, Hard Red Winter exports are lowered as commitments to several Western Hemisphere markets are below a year ago. The season-average farm price is unchanged at $5.00 per bushel.
The 2020/21 global wheat outlook is for larger supplies, increased consumption, higher exports, and reduced stocks this month. Supplies are raised 3.5 million tons to 1,077.1 million. Global production is increased to a record 776.8 million tons, mainly on higher Australia production on the latest ABARES estimate. Australia’s production is raised to a record 33.0 million tons, surpassing the previous 2016/17 record of 31.8 million. World 2020/21 consumption is increased 6.6 million tons to 775.9 million, mostly on higher feed and residual use for China. Auction sales of China’s old-crop wheat stocks were large in January and February as its domestic corn prices remain at a premium to wheat. This is expected to further heighten China’s 2020/21 wheat feed and residual use, raised 5.0 million tons to a record 35.0 million.
Projected 2020/21 global trade is raised 2.9 million tons to a record 197.7 million, mostly on higher exports by Australia and Canada. Australia’s exports are raised on greater exportable supplies while Canada’s exports are increased on a continued strong pace. The largest import changes this month are for China and Pakistan, where imports are raised to 10.5 million and 3.4 million tons, respectively, on a continued robust pace. Projected 2020/21 imports for both countries are well above their 2019/20 imports. Projected 2020/21 world ending stocks are lowered 3.0 million tons to 301.2 million with most of the reduction due to increased consumption for China. However, global stocks are still slightly higher than 2019/20 with China and India holding 50 and 9 percent of the total, respectively.
COARSE GRAINS: This month’s 2020/21 U.S. corn supply and use outlook is unchanged from last month. The projected season-average farm price is unchanged at $4.30 per bushel.
Global coarse grain production for 2020/21 is forecast 5.9 million tons higher to 1,444.8 million. The 2020/21 foreign coarse grain outlook is for larger production, increased trade, and greater ending stocks relative to last month. Foreign corn production is forecast higher with increases for India, South Africa, and Bangladesh that are partly offset by a decline for Mexico. India corn production is higher with increases to both area and yield. South Africa corn production is raised reflecting more favorable yield prospects. World barley production is higher with an increase for Australia.
Corn exports are raised for India, Vietnam, and South Africa. Imports are increased for Vietnam, Bangladesh, and the Philippines. Barley exports are raised for Australia, with higher imports for Saudi Arabia and Algeria. Foreign corn ending stocks for 2020/21 are higher, mostly reflecting increases for India, Vietnam, and Paraguay that are partly offset by reductions for Argentina and Mexico. Global corn ending stocks, at 287.7 million tons, are up 1.1 million from last month.
RICE: The supply and demand outlook is unchanged for 2020/21 U.S. rice this month. The projected 2020/21 all rice season-average farm price is raised $0.20 per cwt to $13.60 with increases in the NASS prices reported to date and price expectations for the remainder of the marketing year. Projected prices for both long-grain and Other States medium- and short-grain are both raised this month to $12.40 and $12.80 per cwt, respectively.
The 2020/21 global outlook is for slightly larger supplies, higher consumption, nearly unchanged trade, and reduced stocks. Rice supplies are raised 0.2 million tons to 682.5 million, primarily on higher rice production for India more than offsetting reductions for Bangladesh and Australia. India’s production is raised to a record 121.0 million tons on a record yield. This would be India’s fifth successively larger crop since 2016/17. World 2020/21 consumption is increased 0.5 million tons to a record 504.7 million, primarily on more domestic use by India. World trade is virtually unchanged at 46.3 million tons as higher exports by India at a record 15.5 million are offset on reduced exports by Thailand and Brazil. Projected 2020/21 world ending stocks are lowered 0.3 million tons to 177.8 million, primarily on Bangladesh and Australia.
OILSEEDS: U.S. soybean supply and use projections for 2020/21 are mostly unchanged this month. With soybean crush and exports projected at 2.20 billion bushels and 2.25 billion bushels, respectively, ending stocks remain at 120 million bushels, down 405 million from last year’s record. The U.S. season-average soybean price is projected at $11.15 per bushel, unchanged from last month. Although current cash prices are significantly higher, prices received through January have averaged just over $10.00 per bushel, reflecting forward pricing at lower prices. Soybean meal prices are also unchanged at $400.00 per ton. The soybean oil price is forecast at 41.0 cents per pound, up 1 cent from last month.
Global 2020/21 oilseed supply and demand forecasts include higher production, exports, and ending stocks. Global production is raised 0.7 million tons to 595.8 million, with higher soybean and rapeseed partly offset by lower palm kernel, cottonseed, and sunflowerseed. Soybean production for Brazil is raised 1 million tons to 134 million, reflecting a revision to the 2019/20 crop and this season’s expected yield trend. India’s soybean production is raised 0.2 million tons to 10.7 million based on updated government area data. Conversely, Argentina’s soybean production is reduced 0.5 million tons to 47.5 million due to dry weather conditions over the past month.
Global oilseed exports are raised 0.8 million tons to 194.7 million, mainly on higher rapeseed exports for Ukraine and Australia. Rapeseed imports are increased for the EU-27+UK where the crop is also raised to 17.1 million tons based on updated government data. Global soybean crush is forecast up 1.6 million tons to 323.6 million as higher crush for Argentina and Brazil is partly offset by lower crush for China. Higher crush in Argentina results in higher meal and oil exports. Soybean crush for China is lowered 1 million tons to 98 million based on data to date. Global soybean stocks are slightly higher, with increased stocks for China and Brazil that are mostly offset by lower stocks for Argentina.
SUGAR: Mexico sugar production is reduced by 50,000 metric tons (MT) to 5.900 million on lower projections of sugarcane and sugar yields based on analysis of yields reported through the end of February. Deliveries for human consumption are reduced on the pace to date but the reduction is limited by an increase made by CONADESUCA to its own projection. The new projection is 4.030 million MT. That projection plus expected deliveries to IMMEX put total deliveries at 4.445 million MT. There is a minor adjustment to expected ending stocks based on reduced deliveries, and total exports are residually increased to 1.492 million MT. Exports to the United States this month are adjusted in Mexico by the new export limit to be established by the U.S. Department of Commerce after the publication of this March 2021 WASDE as set out in the AD/CVD Suspension Agreement. Because the export limit set by Commerce in December 2020 is larger than U.S. Needs based on this WASDE, the export limit is projected to be set at 794,146 MT, the same as set by Commerce in December. Added to this is a small amount exported to the United States in October 2020 from last year’s allocation to bring the total to 796,528 MT or 903,703 STRV. Exports to third countries that can include exports to the U.S. re-export import program are residually projected at 695,475 MT.
SUGAR: Mexico sugar production is reduced by 50,000 metric tons (MT) to 5.900 million on lower projections of sugarcane and sugar yields based on analysis of yields reported through the end of February. Deliveries for human consumption are reduced on the pace to date but the reduction is limited by an increase made by CONADESUCA to its own projection. The new projection is 4.030 million MT. That projection plus expected deliveries to IMMEX put total deliveries at 4.445 million MT. There is a minor adjustment to expected ending stocks based on reduced deliveries, and total exports are residually increased to 1.492 million MT. Exports to the United States this month are adjusted in Mexico by the new export limit to be established by the U.S. Department of Commerce after the publication of this March 2021 WASDE as set out in the AD/CVD Suspension Agreement. Because the export limit set by Commerce in December 2020 is larger than U.S. Needs based on this WASDE, the export limit is projected to be set at 794,146 MT, the same as set by Commerce in December. Added to this is a small amount exported to the United States in October 2020 from last year’s allocation to bring the total to 796,528 MT or 903,703 STRV. Exports to third countries that can include exports to the U.S. re-export import program are residually projected at 695,475 MT.
U.S. sugar supply for 2020/21 is decreased 219,671 short tons, raw value (STRV) to 14.113 million on projected increases in production being more than offset by decreases in expected imports. Beet sugar production is increased 46,895 STRV to 5.093 million on a projected increase in national sucrose recovery to 15.275 percent. Recoveries in all regions including the Upper Midwest are projected to be at above-average high levels, pushing the national recovery projection 1.50 standard deviations above its 8-year average since 2012/13. Processor forecasts of beet pile shrink have not varied much during the campaign. Estimates of an above-average proportion of sugarbeets sliced relative to beets harvested through the end of January is a sign of reduced probability of shrink for the remainder of the campaign. Processors indicate that recent above-average temperatures are not a major concern for shrink. Cane sugar production in Louisiana is increased by 17,666 STRV to 1.949 million on crop year estimates published in the Sweetener Market Data. Cane sugar production in Texas is reduced 2,252 STRV to 131,748 on a processor report at the end of the campaign. Re-export imports are decreased by 50,000 STRV on the slow pace to date and the likelihood of a continuation of lower margins between U.S. and world raw sugar prices. Imports from Mexico are reduced by 231,980 STRV to 903,703 as detailed in the preceding paragraph.
U.S. deliveries for human consumption are reduced by 75,000 STRV to 12.125 million on the slow pace through one-third of the fiscal year. These deliveries have been difficult to project because of the unusually high Direct Consumption Imports of 204,670 STRV recorded as entering in September of 2019/20 but unlikely to have been delivered to actual end users until sometime in 2020/21. A precise allocation is difficult to establish but this season’s slow pace of recorded deliveries is indicative of the effect. Ending stocks are residually projected at 1.848 million STRV, implying an ending stocks-to-use ratio of 15.07 percent.
LIVESTOCK, POULTRY, AND DAIRY: The 2021 forecast for total red meat and poultry production is lowered from last month as lower expected pork, broiler, and turkey production more than offsets slightly higher beef production. Pork production is lowered on a slower pace of hog slaughter although higher expected carcass weights in the first half of the year temper the decline. Broiler production is lowered for the first quarter on to-date slaughter data; production in the outlying quarters is unchanged from last month. Turkey production is lowered on recent hatchery and slaughter data. First-half beef production is raised from last month as lower expected fed cattle slaughter in the first quarter is more than offset by higher first-half non-fed cattle slaughter. Second-half production is adjusted to reflect a more rapid pace of first-quarter feedlot placements. Forecast egg production is raised from last month, on both higher table and hatching egg production
The 2021 beef import forecast is reduced on increased competition for relatively tight supplies of beef from Oceania. The beef export forecast is unchanged from last month. The annual forecasts for pork imports and exports are unchanged from last month. The broiler export forecast is reduced from last month on expected weakness in demand, and the turkey forecast is lowered on the pace of exports in the first quarter.
Fed cattle prices are unchanged from last month. Hog price forecasts are raised from last month on current prices and expectations of firm demand. Broiler and turkey price forecasts are raised on current prices and tighter expected supplies. Egg prices are raised on current prices and stronger expected demand into the next quarter.
The 2020 milk production estimate is adjusted to reflect recent data revisions. For 2021, the milk production forecast is lowered slightly from last month as a higher expected cow inventory is more than offset by slower growth in milk per cow. The 2021 fat basis import forecast is reduced on lower expected imports of butterfat; fat basis exports are raised as higher shipments of butterfat more than offset lower forecast cheese exports. On a skim-solids basis, the import forecast is unchanged due to offsetting changes in imports of a number of dairy products while the export forecast is lowered, reflecting expectations of lower lactose shipments which are partly offset by higher exports of skim/nonfat milk powder.
The annual cheese price forecast is unchanged from last month as weaker prices in the first part of 2021 are offset by improved demand later in the year. Butter, nonfat dry milk, and whey price forecasts are raised from last month with expected improvements in both domestic and export demand. These higher product prices are reflected in higher Class III and Class IV prices. The 2021 all milk price forecast is raised to $17.75 per cwt.
COTTON: This month’s 2020/21 U.S. cotton forecasts show lower production, consumption, and ending stocks relative to last month. Production is reduced 250,000 bales to 14.7 million, based on the March 9 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2021 Crop Production report. Consumption is reduced 100,000 bales due to the industry’s lagging recovery from the previous year’s sharp losses. Ending stocks are 100,000 bales lower this month at 4.2 million bales. The projected marketing year average price received by upland producers of 69.0 cents per pound is up 1 cent from last month.
The global 2020/21 cotton supply and demand estimates show lower production and ending stocks compared with last month, but higher mill use and trade. Estimated global production is reduced nearly 830,000 bales, largely due to lower Brazilian and U.S. production. Cotton import pace and indications of recovering global consumption helped boost consumption estimates for Turkey, Bangladesh, Pakistan, and Vietnam, more than offsetting lower projections for the United States and Taiwan. Imports are also projected higher in the countries with larger consumption, and the forecast for 2020/21 world trade is more than 600,000 bales higher this month. On the export side, higher Indian exports account for most of the increase as auctions by the Cotton Corporation of India have released much of the cotton purchased last year under the Minimum Support Price program. World ending stocks in 2020/21 are forecast 1.1 million bales lower than last month, at 94.6 million bales.
