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12

October USDA Supply & Demand

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Here's what the USDA had to say:

COARSE GRAINS: This month’s 2017/18 U.S. corn outlook is for larger production, increased feed and residual use, and nearly unchanged ending stocks. Corn production is forecast at 14.280 billion bushels, up 96 million from last month. Corn supplies are higher, as a larger crop more than offsets a reduction in beginning stocks based on the Grain Stocks report. Projected feed and residual use is increased 25 million bushels. With supply and use changes essentially offsetting, corn ending stocks are up 5 million bushels from last month. The projected range for the season-average corn price received by producers is unchanged at $2.80 to $3.60 per bushel.

Global coarse grain production for 2017/18 is forecast up 2.8 million tons to 1,319.4 million. The 2017/18 foreign coarse grain outlook is for greater production, consumption, and reduced stocks relative to last month. Foreign corn production is forecast higher, with the largest reductions for Russia, Ukraine, Ethiopia, and Tanzania more than offset by increases for a number of countries including Nigeria, Turkey, and Mozambique. The projected corn yields for Russia and Ukraine are reduced based on reported harvest results to date. Historical revisions are made to Nigeria’s corn, sorghum, and millet production estimates to better reflect statistics published by the government.

Corn exports are raised for Mexico and Argentina, with largely offsetting reductions for Russia and Ukraine. Argentina’s 2016/17 exports are lowered for the local marketing year beginning March 2017 reflecting a slower-than-expected pace of exports to date. Projected 2017/18 food, seed and industrial use for corn in China is raised based on recent trade data indicating a higher-than-expected level of corn product exports. Foreign corn ending stocks for 2017/18 are down from last month, mostly reflecting declines for China and Mexico that are only partially offset by increases for Argentina and Turkey. Global corn stocks, at 201.0 million, are down 1.5 million from last month.

 

OILSEEDS: U.S. oilseed production for 2017/18 is projected at 132.3 million tons, down 0.5 million from last month mainly on lower sunflowerseed, canola, and cottonseed production. Soybean production is forecast at 4,431 million bushels, nearly unchanged from last month with higher harvested area offsetting lower yields. Harvested area is projected at a record 89.5 million acres, up 0.8 million. The soybean yield is forecast at 49.5 bushels per acre, down 0.4 bushels. With lower beginning stocks, soybean supplies for 2017/18 are projected down 44 million bushels. With use projections unchanged, ending stocks are projected at 430 million bushels. If realized, ending stocks relative to use would be the highest since 2006/07.

The 2017/18 U.S. season-average soybean price is forecast at $8.35 to $10.05 per bushel, unchanged from last month. Soybean meal and soybean oil price projections are also unchanged at $290 to $330 per short ton and 32.5 to 36.5 cents per pound, respectively.

Global soybean production is projected down 0.6 million tons to 347.9 million on lower forecasts for Russia and Ukraine. Higher production for China and Mexico is partly offsetting.

Global soybean exports are lowered for Ukraine while sunflowerseed exports are lowered for Ukraine and Russia. Lower rapeseed exports for Australia are offset by higher exports for Ukraine. Global oilseed ending stocks for 2017/18 are projected down 1.6 million tons from last month to 107.9 million mainly reflecting back-year adjustments that reduced soybean carryin for Brazil and the United States.

 

WHEAT: Projected 2017/18 U.S. wheat supplies are decreased modestly this month as reduced beginning stocks are partially offset by slightly higher wheat production. Beginning stocks were revised downward in the latest NASS Grain Stocks report while wheat production increased in the NASS Small Grains Annual Summary to 1,741 million bushels. Although all wheat production increased minimally from last month, the by-class changes are relatively more significant as larger Durum and Hard Red Spring production more than offset declines in Hard Red Winter and Soft Red Winter. Projected 2017/18 feed and residual is reduced 30 million bushels this month to 120 million as the NASS Grain Stocks report indicated lower-than-expected June-August disappearance. Additionally, projected 2017/18 U.S. corn supplies are the second highest on record, which is expected to dampen wheat feed and residual use for the rest of 2017/18. The other wheat use categories are unchanged this month and projected 2017/18 ending stocks are higher at 960 million bushels but still well below last year’s 1,181 million. The projected 2017/18 season-average farm price is unchanged this month at the midpoint of $4.60 per bushel but the range is narrowed 10 cents on each end to $4.40 to $4.80.

Global 2017/18 wheat supplies are increased, primarily on higher production forecasts for Russia, EU, and India more than offsetting a decline in Australia. Based mainly on harvest results to date, Russia’s 2017/18 wheat production is increased 1.0 million tons to a new record of 82.0 million tons. This is well above last year’s previous record of 72.5 million tons. EU wheat production is raised 2.2 million tons to 151.0 million, largely on higher production in France. Australia’s wheat production is reduced 1.0 million tons to 21.5 million on persistent dry conditions in most of eastern Australia. This would be Australia’s lowest wheat output since the 2008/09 crop year.

Foreign 2017/18 trade is fractionally higher this month as reduced exports by Australia are offset by increased exports from Canada. Projected imports are lowered for India and Turkey as increased 2017/18 production for both countries is expected to reduce import needs. Total world consumption is projected higher, primarily on greater usage by India, EU, and Russia on their increased supplies. Projected global ending stocks are nearly 5.0 million tons higher this month at 268.1 million, which is a new record.

 

 

2017-18 USDA U.S. Yield (bu/acre)
 
USDA
Oct
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Oct
2017-18
Corn
171.8
169.8
167.0-172.0
169.9
Soybeans
49.5
49.9
48.5-52.5
49.9

 

2017-18 USDA U.S. Harvest Acres (million acres)
 
USDA
Oct
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Sep
2016-17
Corn
83.1
83.5
82.9-84.0
83.5
Soybeans
89.5
89.0
88.5-89.8
88.7

 

2017-18 USDA U.S. Production (bln bu)
 
USDA
Oct
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Sep
2017-18
Corn
14.280
14.171
13.836-14.450
14.184
Soybeans
 4.431
4.437
4.321-4.500
4.431
Wheat
 1.741
 
 
1.739

 

2017-18 USDA U.S. Grain Carryout (bln bu)
 
USDA
Oct
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Sep
2017-18
Corn
2.340
2.251
1.985-2.425
2.335
Soybeans
0.430
0.452
0.301-0.572
0.475
Wheat
0.960
0.944
0.910-0.980
0.933

 

2016-17 USDA World Grain Carryout (million tons)
 
USDA
Oct
2016-17
Average Trade Est.
Range of
Trade Est.
USDA
Sep
2016-17
Corn
226.99
226.0
224.5-227.0
227.0
Soybeans
94.86
95.1
91.7-96.4
96.0

 

2017-18 USDA World Grain Carryout (million tons)
 
USDA
Oct
2017-18
Average Trade Est.
Range of
Trade Est.
USDA
Sep
2017-18
Corn
200.96
201.2
196.70-204.0
202.5
Soybeans
96.05
96.7
93.9-98.0
97.5
Wheat
 268.13
263.4
258.0-267.0
263.1
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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.