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.
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.
Grain sorghum production is forecast down from last month, as a 2.4-bushel per acre increase in yield to 72.2 bushels per acre is more than offset by a reduction in harvested area. Barley and oat production estimates are updated based on the Small Grains report. 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.
The 2017/18 U.S. rice crop is reduced 1.1 million cwt to 178.6 million on lower yields and slightly lower harvested area. This is the smallest all rice crop since 1996/97. The average yield forecast is lowered 35 pounds per acre to 7,469. Decreases in California, Missouri, and Texas are partially offset by an increase in Arkansas. The long-grain crop is reduced 0.8 million cwt to 126.3 million. This is the smallest long grain crop since 2011/12.
Medium- and short-grain production is lowered 0.3 million cwt to 52.3 million. No other supply and demand changes are made this month. All rice ending stocks are lowered 1.1 million cwt to 27.8 million, which would be the lowest all rice ending stocks in fourteen years. The all rice season-average farm price is unchanged at a range of $12.70 to $13.70 per cwt. Global rice supplies for 2017/18 are raised 18.3 million tons mainly on a multi-year revision to China’s stocks estimates beginning in 2010/11. The large multi-year changes in China stocks reflect significant government procurement since 2013 as well as reductions in estimated per capita rice consumption. For more information see page 11 of the October Grain World Markets and Trade Report (https://www.fas.usda.gov/data/grain-world-markets-and-trade). Global rice production is increased 0.4 million tons to 483.8 million with increases for Nigeria and Egypt partially offset by a reduction for Bangladesh. For 2017/18, global trade and total consumption are changed fractionally as a 1.3-million-ton increase in Nigeria’s consumption is partially offset by a 0.7-million-ton reduction for China. Global 2017/18 ending stocks are raised 18.0 million tons to 141.5 million, the highest since 2000/01. China is estimated to hold 65 percent of global rice stocks.
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 oilseed production for 2017/18 is projected at 577.0 million tons, down 1.6 million as reductions for soybeans, rapeseed, and sunflowerseed are partly offset by increases for cottonseed and peanuts. 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. Sunflowerseed production is also lower for Russia and Ukraine on lower yields. Rapeseed production is lowered for Australia where yields are impacted by below-normal rainfall.
Global oilseed exports for 2017/18 are down 0.4 million tons to 173.9 million on lower soybean and sunflowerseed exports. 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.
Florida cane sugar production for 2017/18 is reduced by 90,038 short tons, raw value (STRV) to 2.036 million, consistent with lower sugarcane production and lower sucrose recovery projected by processors. Louisiana cane sugar production for 2017/18 is increased by 64,000 STRV to 1.690 million based on increased area harvested and yield forecast by NASS in the Crop Production report. U.S. beet sugar production for the 2017/18 August-July crop year is forecast at 5.110 million STRV, down 21,000 from last month based on NASS forecasts in the Crop Production report. Fiscal year 2017/18 beet sugar is decreased by 39,943 STRV to 4.977 million STRV based reductions in crop year production and an increase in early-season beet sugar production estimated for August and September 2017. Beet sugar production for 2016/17 is increased to 5.022 million STRV based on the higher early-season production.
Sugar imported under the raw sugar tariff-rate quota (TRQ) for 2016/17 is reduced by 99,166 STRV. Due to the USDA’s extension of entry of 2016/17 raw sugar TRQ imports to the end of October, 57,670 STRV of the 2016/17 TRQ imports are projected to enter in October 2017, increasing 2017/18 imports. Free Trade Agreement calendar year TRQ sugar of 16,342 STRV previously expected to enter before September 30 for 2016/17 is now expected to enter before December 31 for 2017/18, shifting projected 2016/17 imports into 2017/18. Re-export imports for 2016/17 reported by U.S. Customs and Border Protection are reported at 413,131 STRV, up 28,313 from last month. Total imports from Mexico for 2016/17 are estimated at 1.206 million STRV, down 10,000 from last month. Imports from Mexico for 2017/18 are projected at 1.789 million STRV, up 17,938 from last month but below the Target Quantity of U.S. Needs of 1.812 million calculated by the Commerce Department based on the September WASDE.
Mexico 2016/17 ending stocks are estimated up 15,352 metric tons (MT) as higher imports of 10,000 for consumption and 15,178 for IMMEX are partially offset by higher exports of 9,826.
Although 2016/17 sugar exports to the United States are down 8,578 MT from last month, exports to third countries and for the U.S. re-export import program are now estimated at 18,404 MT higher than last month. The resulting increase in 2017/18 sugar supply is available for export to the U.S. market, while allowing Mexico to maintain an ending stocks- to-consumption bound of 18.0 percent for anticipated use in 2018/19 before the start of the harvest.
The 2017/18 U.S. cotton supply and demand estimates show lower production, exports, and ending stocks relative to last month. Production is reduced 643,000 bales, largely in Texas and Georgia. Domestic mill use is unchanged from last month, but the export forecast is reduced 400,000 bales to 14.5 million, due to reduced U.S. production and strong competitor shipments. Ending stocks are forecast 200,000 bales below the previous month’s forecast. The resulting stocks-to-use ratio of 32.5 percent is virtually unchanged from the previous month’s forecast, and the highest since 2008/09. The forecast range for the marketing year average farm price is 55.0 to 65.0 cents per pound; the midpoint of 60.0 cents is unchanged from the previous month’s projection.
The global cotton supply and demand forecasts for 2017/18 include relatively small increases from the previous month for production, consumption, and trade. Production is raised about 100,000 bales as larger expected crops in Argentina, Brazil, and Greece more than offset the reduction in the forecast for the United States. Vietnam is the primary driver behind a 250,000-bale increase in projected world consumption, while a 440,000-bale increase in projected 2017/18 world cotton trade reflects increases in India, Australia, and Brazil that more than offset lower expected U.S. exports.