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Corn, Soybean, Wheat Ending Stocks Increase in USDA’s April Supply and Demand Report

As was expected, USDA increased ending stocks for corn, soybeans and wheat in it’s monthly World Agricultural Supply and Demand Estimates (WASDE). Export forecasts for all three commodities are expected to slow.

Beef, pork and poultry export forecasts have been reduced from March, citing slowing global demand.

WHEAT: The outlook for 2019/20 U.S. wheat is for lower exports, reduced domestic use, and increased ending stocks. The NASS Grain Stocks report, issued March 31, implied less feed and residual disappearance for both the second and third quarters than previously estimated. Total 2019/20 feed and residual use is trimmed 15 million bushels to 135 million. Wheat exports are also cut 15 million bushels to 985 million on a slowing pace and prices that have become uncompetitive in many international import markets. By class, Hard Red Winter and Soft Red Winter are reduced 10 million and 5 million bushels, respectively. The changes result in a 30 million bushel increase in estimated all wheat ending stocks to 970 million. Despite the larger ending stocks, the projected season-average farm price is raised $0.05 per bushel to $4.60 on updated NASS data as well as surging nearby cash and futures prices, partially resulting from the global COVID19 pandemic.

The 2019/20 global outlook is for slightly higher supplies, but reduced trade and utilization. Global production is lowered fractionally with several small mostly offsetting changes. Global exports are lowered 0.9 million tons, led by a 1.5-million-ton reduction for Russia, which was directly offset by an equivalent increase for the EU. The Russia change is based primarily on newly imposed government export restrictions. The EU is raised on less competition from Russia as well as expectations of a continued strong pace of exports. Several smaller export reductions are made; notably a 0.4-million-ton reduction for the United States and a 0.3-million-ton reduction for Pakistan. Global imports are reduced 0.3 million tons each for Brazil, Japan, and Uzbekistan; a 0.3-millionton increase for Morocco is partially offsetting. Aggregate world consumption is lowered 5.1 million tons following updates to several countries. The largest reductions are 2.0 million tons for China, 1.9 million for India, and 1.0 million for the EU. With supplies higher and use down, projected 2019/20 global ending stocks are raised 5.6 million tons to a record high 292.8 million.

COARSE GRAINS: This month’s 2019/20 U.S. corn outlook is for reduced imports, greater feed and residual use, lower food, seed, and industrial use, and larger stocks. Feed and residual use is raised 150 million bushels to 5.675 billion. This is based on corn stocks reported as of March 1 which indicated disappearance during the DecemberFebruary quarter rose about 4 percent relative to a year ago. Lower forecast corn used for ethanol also supports larger feed and residual use. Corn used to produce ethanol is lowered 375 million bushels to 5.050 billion based on the latest indications from Energy Information Administration data indicating an unprecedented decline in ethanol production and motor gasoline consumption as a result of COVID-19. Partly offsetting is a forecast increase in the amount of corn used for alcohol for beverages and WASDE-599-2 manufacturing use. With supply down fractionally and use declining, ending stocks are raised 200 million bushels to 2.092 billion. The season-average marketing weighted corn price received by producers is lowered 20 cents to $3.60 per bushel.

The global coarse grain production forecast for 2019/20 is up 1.0 million tons to 1,403.8 million. This month’s foreign coarse grain outlook is for larger production, lower trade, fractionally higher use, and larger stocks relative to last month. Corn production is raised for the EU and Belarus, with partly offsetting reductions for Indonesia and Laos.

Major global trade changes for 2019/20 include higher projected corn exports for the EU, with a partially offsetting reduction for Russia. Corn imports are raised for South Korea, Turkey, Algeria, and Indonesia, with lower projections for Vietnam, Taiwan, Cuba, and Mexico. Foreign corn ending stocks are raised, mostly reflecting increases for Thailand, Taiwan, India, and Turkey that more than offset declines for Argentina and Mexico. Global corn ending stocks, at 303.2 million tons, are up 5.8 million from last month.

RICE: The outlook for 2019/20 U.S. rice this month is for lower supplies, unchanged domestic use and exports, and reduced ending stocks. Supplies are lowered by 0.5 million cwt to 261.5 million on decreased imports. Long-grain imports are lowered on an expected reduced volume in the near-term due to sharply curtailed restaurant usage caused by the COVID-19 pandemic. Projected 2019/20 all rice ending stocks are subsequently reduced by 0.5 million cwt to 29.5 million, which is down 34 percent from last year. The projected all rice stocks-to-use ratio of 12.7 percent would be the lowest since 2007/08. Reflecting the tighter supplies, the projected 2019/20 all rice seasonaverage farm price is raised $0.20 per cwt to $13.20 with increases in both the long-grain and California medium- and short-grain price projections.

The 2019/20 international outlook is revised lower this month for supplies, consumption, trade, and ending stocks. Global 2019/20 rice supplies are lowered by 2.8 million tons to 671.8 million, mainly on production reductions for several Southeast Asian countries, led by Vietnam, Burma, and the Philippines. World 2019/20 consumption is lowered by 2.1 million tons to 490.2 million on decreases for several Asian and African countries with constrained supplies. Global 2019/20 trade is reduced 2.2 million tons to 42.2 million, primarily on export restrictions recently imposed by several Southeast Asian rice exporters in the form of bans, licenses, and quotas due to domestic supply concerns. Collectively, projected exports for Burma, Cambodia, and Vietnam are reduced 1.7 million tons or 15 percent this month. Additionally, India’s exports are lowered 0.3 million tons to 10.2 million as the current country-wide quarantine is expected to affect export activity. These factors have contributed to raising international rice prices to their highest levels in more than seven years. Projected world ending stocks are down 0.7 million tons this month but are still at a record high of 181.6 million with China accounting for 65 percent of the total.

OILSEEDS: U.S. soybean supply and use changes for 2019/20 include lower exports, seed use, and residual use, higher crush, and higher ending stocks. Soybean exports are reduced mainly on strong competition from Brazil. Lower seed use reflects plantings for the 2020/21 crop indicated in the March 31 Prospective Plantings report. Residual WASDE-599-3 use is reduced based on indications in the March 31 Grain Stocks report. Soybean crush is raised on higher soybean meal exports and increased domestic disappearance. Domestic soybean meal use is forecast higher with an expected reduction in available supplies of DDGs resulting from lower ethanol production. With higher crush only partly offsetting lower exports, seed, and residual use, ending stocks are projected at 480 million bushels, up 55 million.

The season-average soybean price is forecast at $8.65 per bushel, down 5 cents. The soybean oil price is projected at 30.0 cents per pound, down 1.5 cents reflecting increased production and ending stocks. Soybean meal prices are unchanged at $305 per short ton.

The 2019/20 global oilseed outlook includes lower production, exports, and stocks compared to last month. Global soybean production is reduced 3.7 million tons to 338.1 million on lower production for Argentina and Brazil. Argentina’s production is lowered 2 million tons to 52 million, reflecting dry conditions in the main growing regions during the latter part of February into early March. Soybean production for Brazil is lowered 1.5 million tons to 124.5 million due to dry conditions in Rio Grande do Sul while the crop was in pod-filling and maturation stages.

Global soybean exports are lowered 0.4 million tons to 151.5 million. U.S. and Canadian exports are lowered while Brazil’s shipments are revised up due to a competitive exchange rate and ample exportable supplies. China’s imports are raised 1 million tons to 89 million, reflecting higher Brazilian shipments. Global soybean ending stocks are 2.0 million tons lower than last month as lower stocks in Brazil are partly offset with higher U.S. and Chinese stocks.

SUGAR: Mexico sugar production for 2019/20 is projected at 5.235 million metric tons (MT), an increase of 35,000 over last month. Analysis based on production through the first week of April supports increases in area over last month but lower sugarcane yield and about the same sucrose recovery as last month. Domestic deliveries and ending stocks, equal to 2.5 months of forecast domestic sugar use before the start of the 2020/21 sugarcane harvest, are unchanged. Exports outside of those shipments under license to the United States are increased to 39,187 MT on the pace to date. Exports to the United States are increased by 29,365 MT to 1.026 million.

Projected total U.S. supply for 2019/20 is increased by 546,884 short tons, raw value (STRV) on increased production and imports. All production changes are made on the basis of forecasts and/or data supplied by processors. Cane sugar production is increased by 26,460 STRV on more production expected in Florida partially offset by a reduction in Texas. Beet sugar production is reduced by 19,797 STRV on lower expected sugar from slicing and from the de-sugaring of molasses. TRQ imports are increased to reflect the USDA action announced on April 1 of increases to both the raw sugar and refined sugar TRQs. The raw sugar shortfall is increased to 84,092 STRV to reflect sugar not expected to enter the United States although allocated. Imports from Mexico are increased by 34,312 STRV. High-tier tariff imports are unchanged. There are no WASDE-599-4 changes to use. Ending stocks are projected at 1.434 million STRV, implying an ending stocks-to-use ratio of 11.70 percent.

LIVESTOCK, POULTRY, AND DAIRY: Total red meat and poultry production for 2020 is reduced from last month as sectors at all levels adjust to COVID-19 and economic uncertainty. The beef production forecast is reduced as lower expected steer and heifer slaughter more than offsets higher cow slaughter. However, beef production declines are partially offset by heavier carcass weights. The pork production forecast is reduced from the previous month; however, the recent Quarterly Hogs and Pigs report points to relatively large supplies of hogs available for slaughter during most of the year and heavier hog carcass weights will also support increased production. The broiler production forecast is lowered as producers respond to weaker demand and lower broiler prices. The turkey production forecast is reduced slightly on recent production data. Egg production for 2020 is reduced from the previous month on slower expected growth in the laying flock.

Beef, pork, and poultry export forecasts are reduced from last month on slowing global demand.

Price forecasts for 2020 are lowered for cattle, hogs, and broilers on generally weak demand and large supplies. The turkey price forecast is raised from last month on current prices. Egg prices are raised on strong demand.

The milk production forecast is reduced from last month on slower growth in milk per cow. The average dairy cow inventory is little changed as a higher-than-expected early year inventory is expected to decline later in the year. The 2020 fat basis export forecast is reduced primarily on lower expected exports of butterfat products and cheese due to weaker global demand. The fat basis import forecast is also reduced on lower imports of butter. On a skim-solids basis, the export forecast is reduced, reflecting slowing international demand for nonfat dry milk (NDM) and lactose. The skim-solids basis import forecast is unchanged from last month. Product prices are forecast lower on weak demand, large supplies, and larger stocks. Thus, both the Class III and Class IV prices are forecast lower. The all milk price is forecast lower than the previous month at $14.35 per cwt.

COTTON: The 2019/20 U.S. cotton supply and demand forecasts show sharply lower exports, lower consumption, and higher ending stocks compared with last month. A developing global economic slowdown with little precedent is expected to significantly reduce global cotton demand and trade, resulting in one of the largest one-month reductions in projected U.S. cotton exports ever: down 1.5 million bales to 15.0 million. Consumption is 100,000 bales lower, and ending stocks are 1.6 million bales higher. Ending stocks are now expected to reach 6.7 million bales, equivalent to 37 percent of total disappearance, compared with March’s expected 26 percent. The projected marketing year average price received by upland producers of 59.0 cents per pound is down 1 cent from last month. WASDE-599-5 Lower world consumption this month results in lower projected trade and higher projected 2019/20 ending stocks. Consumption is lower for every major country, with total world consumption down 7.6 million bales or 6.4 percent from March. At 110.6 million bales, world consumption in 2019/20 is now projected to be 8.1 percent lower than in 2018/19. This would be one of the largest annual declines on record. World trade in 2019/20 is down 3.0 million bales from the March estimate. With relatively small increases in beginning stocks and production this month, 2019/20 expected ending stocks are 7.9 million bales higher than estimated in March, and 11.0 million bales higher than the year before