USDA Release Latest Supply and Demand Estimates

(WASHINGTON, DC) USDA’s Foreign Agricultural Service released their December World Agricultural Supply and Demand Estimates (WASDE) on Tuesday. Highlights include an outlook for 2018/19 U.S. wheat to remain unchanged on the supply side, lower exports, and higher ending stocks. Wheat exports are lowered 25 million bushels to 1.0 billion with all of the reduction in Hard Red Winter (HRW) on historically low exports for this class in the first half of the 2018/19 marketing year (MY). The reduction in HRW is partially offset by higher exports of Hard Red Spring and Soft Red Winter. Projected 2018/19 ending stocks are raised 25 million bushels to 974 million, which are still down 11 percent from last year. Based on NASS monthly prices reported to date and price expectations for the remainder of the MY, the projected season-average farm price is up $0.05 per bushel at the midpoint with the range narrowed to $5.05 to $5.25.

This month’s 2018/19 U.S. corn outlook is for lower corn used for ethanol, reduced imports, and larger ending stocks. Imports are lowered based on trade to date. Corn used to produce ethanol is reduced 50 million bushels to 5.6 billion, based on the most recent 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 November. These data imply corn used for ethanol during the September to November quarter declined relative to the prior year for the first time since 2012. With no other use changes, ending stocks are up 45 million bushels from last month. The season-average corn price received by producers is unchanged at a midpoint of $3.60 per bushel but the range is narrowed 5 cents on each end to $3.25 to $3.95 per bushel.

Total U.S. oilseed production for 2018/19 is forecast at 135.5 million tons, up slightly due to an increase for cottonseed. Soybean supply and use projections for 2018/19 are unchanged from last month. With soybean exports and crush unchanged, soybean ending stocks are projected at a record 955 million bushels. The U.S. season-average soybean price for 2018/19 is forecast at $7.85 to $9.35 per bushel, unchanged at the midpoint. Soybean meal and oil price forecasts are also unchanged at $290 to $330 per short ton and 28.0 to 32.0 cents per pound, respectively.

This month’s 2018/19 U.S. cotton forecasts include slightly higher production and ending stocks. Production is raised 180,000 bales due mainly to a 300,000-bale increase in Texas. Domestic mill use and exports are unchanged. Ending stocks, forecast at 4.4 million bales in 2018/19, are 100,000 bales above both last month and the 2017/18 estimate. The forecast range for the marketing year average price received by producers is unchanged from November, 71 to 77 cents per pound, with a midpoint of 74 cents.