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09

June USDA Supply & Demand

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WHEAT:

Projected U.S. wheat supplies for 2017/18 are higher this month on increased beginning stocks, production, and imports. Projected 2017/18 U.S. wheat production is slightly increased by 3.8 million bushels to 1,824 million. The NASS June Crop Production report indicates higher Hard Red Winter and Soft Red Winter wheat production forecasts, which more than offset a reduced White Winter wheat crop. All of the wheat use categories are unchanged this month. The net supply increase raises projected 2017/18 ending stocks by 10.8 million bushels to 924.3 million. Carryout remains 20 percent below last year. The 2017/18 season-average farm price is projected at $3.90 to $4.70 per bushel, up 5 cents on both ends of the range. The mid-point of this range is up $0.40 from 2016/17. High-protein wheat supplies are expected to remain constrained in 2017/18, resulting in relatively higher prices for this wheat.

Global wheat supplies for 2017/18 are raised 2.8 million tons, primarily on higher forecast wheat production for Russia, which is up 2.0 million tons to 69.0 million. Conditions continue to be favorable for winter wheat in most areas since the crop emerged from dormancy.

Turkey’s wheat production is also forecast higher, up 0.5 million tons to 18.0 million on improved crop conditions this spring. India’s wheat production forecast is reduced 1.0 million tons to 96.0 million but is still record large and 9.0 million tons above 2016/17. European Union wheat production is forecast modestly lower at 150.8 million tons on a smaller expected crop in Germany but still 4 percent above last year.

Foreign exports for 2017/18 are fractionally higher this month with increases in Argentina and Iran more than offsetting a reduction for the EU. Imports are projected higher for Brazil, Chile, and South Africa but down for Iran. Total world consumption is marginally lower, as a 1.0-million-ton reduction in India is only partially offset by increases in Russia, Brazil, and Chile. Global ending stocks are projected at a record 261.2 million tons, up 2.9 million from last month.

China Wheat

 

COARSE GRAINS:

The 2017/18 outlook for U.S. feed grain supplies is virtually unchanged this month as an increase in sorghum beginning stocks is largely offset by reductions for barley and oats.

Projected corn production for 2017/18 is unchanged at 14,065 million bushels. USDA will release the Acreage report on June 30, providing a survey-based estimate of corn area planted and a forecast of area harvested for grain. The season-average corn price received by producers is unchanged from last month at $3.00 to $3.80 per bushel.

The increase for 2017/18 sorghum beginning stocks reflects a 5 million bushel reduction for 2016/17 food, seed, and industrial use based on reported sorghum used for ethanol production through April in the Grain Crushings and Co-Products Production report. With other use categories unchanged, sorghum ending stocks for 2016/17 are raised 5 million bushels.

This month’s 2017/18 foreign coarse grain outlook is for lower production, increased trade and reduced stocks relative to last month. EU corn production is down based on government data indicating lower-than-expected area in France and Germany. Canada corn production is lowered on reductions to both area and yield,as wetter-than-normal conditions in Ontario and Quebec during May delayed plantings and are expected to reduce yield prospects. Ukraine corn production is raised based on reported planting progress to date indicating a level of planted area above previous expectations. Turkey’s barley production is raised as the impact of April dryness was not as severe as previously anticipated. For 2016/17, Brazil corn production is raised as above-normal rainfall in the Center-West during May boosts yield prospects. South Africa corn production is higher reflecting the latest production estimate from the government.

Major global trade changes for 2017/18 include higher projected corn exports for Ukraine and Russia, with increased corn imports for the EU. Foreign corn ending stocks are lowered from last month, with reductions for Canada, the EU and Russia more than offsetting increases for South Africa and Ukraine.

China Corn

OILSEEDS:

This month’s U.S. soybean supply and use projections for 2017/18 are little changed from last month. Higher beginning stocks reflect a lower crush projection for 2016/17. Soybean crush for 2016/17 is reduced 15 million bushels to 1,910 million mainly reflecting reduced domestic soybean meal disappearance. Soybean ending stocks for 2016/17 are projected at 450 million bushels, up 15 million from last month. Ending stocks for 2017/18 are also raised 15 million bushels to 495 million.

Price forecasts for 2017/18 are unchanged this month. The 2017/18 season-average price for soybeans is forecast at $8.30 to $10.30 per bushel; soybean meal and oil prices are projected at $295 to $335 per short ton and 30 to 34 cents per pound, respectively.

The 2017/18 global oilseed supply and demand forecasts include higher production and stocks compared to last month. Higher cottonseed and sunflowerseed production is partly offset by lower rapeseed. Sunflowerseed production israised for Ukraine on higher planted area based on reported planting progress to date. EU rapeseed production is down mainly on lower projected yields in Germany where crops experienced dry and sub-freezing conditions through key flowering stages.

Global oilseed production changes for 2016/17 include higher soybean production in Brazil and Argentina and higher peanut production in India. Global soybean production is raised 3.3 million tons to 351.3 million. The Brazil soybean crop is projected up 2.4 million tons to 114.0 million reflecting increased yields in more recently harvested areas, particularly Rio Grande do Sul. With higher global production in 2016/17, the beginning stocks for 2017/18 are raised 3.1 million tons to 93.2 million. The larger beginning stocks combined with a 0.5-million-ton reduction to Argentina soybean exports in 2017/18 results in a 3.4-million-ton increase to 92.2 million to global soybean stocks at the end of the 2017/18 marketing year.

China Soybeans

2016-17 USDA U.S. Grain Carryout (bln bu)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA May
2017
Corn
2.295
2.287
2.215-2.360
2.295
Soybeans
0.450
0.433
0.400-0.458
0.435
Wheat
1.161
1.161
1.144-1.200
1.159

2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA May
2017
Corn
2.110
2.085
1.985-2.200
2.110
Soybeans
0.495
0.485
0.435-0.612
0.480
Wheat
0.924
0.911
0.860-0.995
0.914

2016-17 USDA World Grain Carryout (million tons)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA May
2017
Corn
224.59
224.00
221.5-226.8
223.9
Soybeans
93.21
90.79
90.14-92.35
90.14
Wheat
256.43
255.24
253.3-256.1
255.35

2017-18 USDA World Grain Carryout (million tons)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA May
2017
Corn
194.33
195.48
193.40-197.25
195.27
Soybeans
92.22
89.44
88.80-90.70
88.81
Wheat
261.19
257.77
254.80-260.00
258.29

2017-18 Wheat Production (bln bu)
 
USDA
June 2017
Average Trade Est.
Range of
Trade Est.
USDA
May 2017
All Winter
1.250
1.239
1.207-1.292
1.246
HRW
0.743
0.731
0.704-0.783
0.737
SRW
0.298
0.295
0.290-0.300
0.297
White
0.199
0.214
0.208-0.222
0.212
All Wheat
1.824
1.815
1.795-1.833
1.820

2016-17 USDA South American Production (million tons)
 
USDA June
2017
Average Trade Est.
Range of
Trade Est.
USDA May
2017
ARG Corn
40.0
40.3
40.0-42.0
40.0
ARG Soy
57.8
57.4
56.9-58.2
57.0
BRZ Corn
97.0
96.5
96.0-98.0
96.0
BRZ Soy
114.0
112.2
111.6-113.2
111.6
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These data and comments are provided for information purposes only and are not intended to be used for specific trading strategies. This commentary is written as a daily marketing tool to help farmers sell the grain they raise. Although all information is believed to be reliable, we cannot guarantee its accuracy or completeness. Past performance and testimonials are not necessarily indicative of future results. Commodity trading involves the risk of loss, and you should fully understand those risks before trading.