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WASDE: November 2019

WHEAT: The outlook for 2019/20 U.S. wheat this month is for smaller supplies, reduced domestic use, and lower stocks. Wheat supplies are decreased 42 million bushels, based on updated production estimates for the States resurveyed following the NASS Small Grains Summary, issued September 30. Adjustments to production in these States, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring wheat, White wheat, and Durum with most reductions occurring in North Dakota and Montana. Estimated seed use is reduced 7 million bushels to 61 million, reflecting a projected 2020/21 all wheat planted acreage of 45.0 million. Food use is lowered 5 million bushels to 955 million, primarily based on the NASS Flour Milling Products report, issued November 1. Projected 2019/20 wheat stocks are reduced 30 million bushels to 1,014 million. The season-average farm price is reduced $0.10 per bushel to $4.60, based on NASS prices reported to date and expectations for cash and futures prices the remainder of the 2019/20 marketing year.

The global outlook for wheat this month is for higher supplies, increased exports, fractionally greater consumption, and higher ending stocks. Supplies are raised with increased production forecasts for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia. EU and Russia production forecasts are raised to 153.0 and 74.0 million tons, respectively, on updated harvest results. Australia’s production is lowered to 17.2 million tons on further damage from the continent’s severe drought and is now forecast lower than last year’s drought-affected crop. Argentina’s production is reduced to 20.0 million tons on dry conditions but remains record large. World exports are raised by 1.0 million tons to 180.7 million on increases for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia. Global consumption is nearly unchanged at 755.2 million tons, which is 3 percent greater than last year. With global supplies rising more than consumption, 2019/20 ending stocks are raised to a record 288.3 million tons with China comprising 51 percent of the total.

COARSE GRAINS: This month’s 2019/20 U.S. corn outlook is for lower production, reduced use, and smaller ending stocks. Corn production is forecast at 13.661 billion bushels, down 118 million from last month on a 1.4-bushel reduction in yield to 167.0 bushels per acre. Feed and residual use is down 25 million bushels based on a smaller crop and higher expected prices. Exports are reduced reflecting the slow pace of early-season sales and shipments. Corn used for ethanol is down 25 million bushels based on September data from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of October. With supply falling more than use, corn ending stocks are lowered 18 million bushels from last month. The season-average corn price received by producers is raised 5 cents to $3.85 per bushel based on observed prices to date.

Global coarse grain production for 2019/20 is forecast 1.8 million tons lower to 1,394.9 million. This month’s 2019/20 foreign coarse grain outlook is for larger production, increased trade, and lower stocks relative to last month. Foreign corn production is forecast higher as increases for several African countries, as well as Russia and Turkey, more than offset declines for Mexico, Ukraine, and the EU. For Mexico, production is lowered as area for summer season corn is expected to be the lowest on record. Yield forecasts for Russia and Ukraine are raised and lowered, respectively, based on observed harvest results to date. Corn exports are raised for Brazil and Russia, with reductions for the United States and Mexico. For 2018/19, corn exports for Brazil are raised for the local marketing year beginning March 2019, based on shipments observed through October. For 2019/20, corn imports are raised for Vietnam, Colombia, Japan, and South Korea. Partly offsetting, are reductions for Iran, Egypt, Malaysia, and Turkey. Foreign corn ending stocks are lower relative to last month, with declines for Brazil, Iran, Mexico, China, and Argentina that are partly offset by small increases for several African countries. Global corn ending stocks, at 296.0 million tons, are down 6.6 million.

OILSEEDS: The U.S. soybean outlook is for slightly lower production, reduced crush, and higher ending stocks. Soybean production is forecast at 3.55 billion bushels, down less than 1 million on fractionally lower yields and unchanged harvested area. Soybean crush is reduced 15 million bushels to 2.11 billion on lower-than expected early-season crush and reduced soybean meal export prospects. With reduced crush, soybean ending stocks are projected at 475 million bushels, up 15 million. The U.S. season-average soybean price for 2019/20 is forecast at $9.00 per bushel, unchanged from last month. The soybean meal price forecast is also unchanged at $325.00 per short ton. The soybean oil price is forecast at $0.31 per pound, up $0.01 from last month on sharply higher reported prices through October.

The foreign oilseed supply and demand forecasts for 2019/20 include lower production, crush, and stocks, compared with last month. Foreign production is forecast at 463.6 million tons, down 3.4 million on lower soybean, cottonseed, sunflowerseed, and rapeseed production. Soybean production for India is reduced 2.0 million tons to 9.0 million on lower yields resulting from excessive late-season rainfall. Soybean production is also reduced for Canada on lower yields. Other production changes include lower sunflowerseed production for Argentina and lower rapeseed production for Australia and the European Union. Foreign soybean crush changes for 2019/20 include reductions for India, China, and Canada. Foreign soybean ending stocks for 2019/20 are reduced with lower projections for Argentina, Canada, and India only partly offset with higher forecasts for Brazil and Egypt.

SUGAR: Estimates of U.S. sugar supply and use for 2018/19 are revised on complete fiscal year Sweetener Market Data (SMD) and trade data through September from U.S. Census and FAS. Beet sugar production is increased 29,680 short tons, raw value (STRV) and Louisiana cane sugar production is increased 29,015 STRV, both on higher-than-expected production in September 2019. Deliveries for human consumption are estimated at 12.106 million STRV, a reduction of 19,347 from last month. Delivery growth of 0.5 percent over the previous year results from a relatively large increase in direct consumption imports. Combined domestic beet and cane sugar processors’ deliveries have remained flat since 2016/17. Ending stocks are estimated at 1.779 million STRV implying an ending stocks-touse ratio of 14.5 percent and adding 54,105 STRV to 2019/20 beginning stocks over last month. Beet sugar production for 2019/20 is projected at 4.588 million STRV, a reduction of 466,485 due to poor harvest conditions resulting in lower sugarbeet production. Beet processors reduced their sliced sugarbeets projection in SMD by 10.3 percent to 28.442 million tons. The largest reductions are centered in the Red River Valley. Louisiana cane sugar production is reduced by 105,803 STRV to 1.794 million based on a lower NASS sugarcane yield forecast and processors’ lower recovery rate. Deliveries for human consumption are reduced by 25,000 STRV to 12.125 million in line with the reduction for 2018/19. Ending stocks are residually projected at 1.285 million STRV for an ending stocks-to-use ratio of 10.5 percent. Estimates of Mexico sugar supply and use for 2018/19 are revised on complete fiscal year data published by CONADESUCA and U.S. Census. Sugar production for 2019/20 is projected at 5.772 million metric tons (MT), a reduction of 293,320 MT from last month. The projection matches the first published CONADESUCA survey of most, if not all, sugar mills in Mexico. Although area harvested is up 0.64 percent, sugarcane yield is down 10.95 percent from last year to 63.17 MT/hectare. Drought has severely reduced yields in the Northeast and Gulf of Mexico production regions. Deliveries for human consumption for 2019/20 are projected down 142,587 MT from last month to 4.057 million. This is 35,316 MT lower than the estimate for 2018/19 and reportedly attributable to a continuing trend of food manufacturers reformulating the sugar content in products. The FAS Mexico Post also notes the effects of negative health campaigns, increased use of high fructose corn syrup in food and beverage products, and government taxes on sugar-containing products. Ending stocks are forecast at 935,751 MT, a sufficient amount to cover delivery needs before the start of the 2020/21 campaign. Exports to non-U.S. destinations are residually forecast at 641,329 MT. Exports to the United States are unchanged from last month.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2019 total red meat and poultry production is raised from last month on higher beef, pork, broiler, and turkey production. Beef production is raised from the previous month on higher expected slaughter of both fed and non-fed cattle. The pork production forecast is raised on both higher hog slaughter and slightly higher carcass weights. The broiler production forecast is raised as hatchery data points to larger supplies of birds available for slaughter in the fourth quarter. Turkey production is raised on higher-than-expected third-quarter production and higher expected supplies of birds in the fourth quarter. Egg production is reduced on lower reported hatching egg production in the third quarter which more than offsets higher-than-expected table egg production. However, no change is made to the fourth-quarter production forecast.

For 2020, the total red meat and poultry forecast is increased from last month as higher broiler and turkey production more than offsets a lower beef production forecast. The pork production forecast is unchanged. Broiler and turkey production forecasts are raised as the increase in production late this year is forecast to carry into late 2020. The beef production forecast is reduced on a slower expected pace of gains in carcass weights. A slightly slower pace of feedlot marketings also contributes to the reduced production forecast. The 2020 egg production forecast is unchanged from the previous month.

Beef and pork trade for 2019 are adjusted to reflect third-quarter reported data; the forecasts for the fourth-quarter 2019 and for 2020 are unchanged from last month. The 2019 broiler export forecast is lowered as weaker-than-expected third quarter exports further dampen expectations for shipments in the fourth quarter; no change is made to the 2020 forecast. Turkey export forecasts for 2019 and 2020 are unchanged.

The cattle price forecast is raised for fourth-quarter 2019 based on recent data; no change is made to the 2020 forecast. The 2019 and 2020 hog price forecasts are reduced on current price weakness. The 2019 broiler price forecast is raised from the previous month on current prices. The price strength is carried into early 2020, but increased production in the later part of 2020 is expected to pressure prices; the 2020 annual price forecast is unchanged. The 2019 and 2020 turkey price forecasts are unchanged from the previous month. The egg price forecast for 2019 is increased on current price strength, but the 2020 forecast is unchanged.

The milk production forecasts for 2019 and 2020 are raised from the previous month as stronger growth in milk per cow more than offsets a slower expected recovery in the cow inventory. The 2019 fat basis import forecast is raised on recent trade data; the 2020 import forecast is unchanged. The fat basis export forecast for 2020 is lowered as higher domestic cheese prices are expected to affect the competitiveness of U.S. cheese in international markets. The skim-solids basis import forecast for 2019 is reduced on lower imports of milk protein products. The 2020 forecast is unchanged. The 2019 skim-solids basis export forecast is raised on stronger sales of nonfat/skim milk powder (NDM/SMP). The 2020 forecast is unchanged as weak exports of cheese and whey products offset higher expected NDM/SMP sales.

Cheese and nonfat dry milk (NDM) price forecasts for both 2019 and 2020 are raised from last month on strength in demand. For both 2019 and 2020, butter and whey prices are lowered on current price weakness which is expected to carry into 2020. The 2019 Class III and Class IV price forecasts are raised as the higher cheese price more than offsets the lower whey price. The 2019 Class IV price is raised as the higher NDM price more than offsets a weaker butter price, but for 2020, the lower butter price outweighs the higher NDM price and the Class IV price is reduced. The 2019 all milk price forecast is raised to $18.60 per cwt; the 2020 all milk price is forecast unchanged at $18.85 per cwt.