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WASDE at a Glance

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The latest World Agricultural Supply and Demand Estimates report was released Wednesday. Here are some of the highlights.

WHEAT: Projected U.S. wheat supplies for 2014/15 are lowered this month as an increase in beginning stocks is more than offset by a reduction in forecast winter wheat production. Beginning stocks are raised with a 10-million-bushel reduction in 2013/14 food use and offsetting 5-million-bushel reductions in 2013/14 imports and exports. Projected production for 2014/15 is down 21 million bushels as reduced prospects for Hard Red Winter (HRW) wheat in the Southern and Central Plains and White Winter wheat in the Pacific Northwest more than outweigh higher forecast Soft Red Winter wheat production across the South and Midwest.

Projected food use is lowered 10 million bushels for 2014/15 and for 2013/14. This month’s reduced outlook for food use assumes a higher flour extraction rate for both marketing years. Exports for 2014/15 are projected 25 million bushels lower with tighter supplies of HRW wheat and stronger competition from major exporters. Projected ending stocks are raised 34 million bushels. The projected range for the 2014/15 season-average farm price is lowered 30 cents on both ends to $6.35 to $7.65 per bushel based on the larger expected carryout, higher global production, and recent sharp declines in futures prices.

Global wheat supplies for 2014/15 are raised 4.1 million tons as a 5.2-million-ton increase in foreign production is only partly offset by a 0.8-million-ton reduction in foreign beginning stocks and this month’s lower U.S. production outlook. World production for 2014/15 is projected at 701.6 million tons, up 4.6 million from last month with increases for India, the European Union, China, and Russia more than offsetting the decline in U.S. output.

COARSE GRAINS: The outlook for 2014/15 U.S. feed grain supplies is virtually unchanged this month with only small changes made to barley and oats imports and exports for 2013/14. Other feed grain balance sheet items are unchanged for both marketing years. Projected corn production for 2014/15 is unchanged at a record 13,935 million bushels. The projected U.S. corn yield remains at 165.3 bushels per acre as a slightly slower-than-normal mid-May planting progress is expected to be offset by very favorable early season crop and weather conditions. U.S. crop conditions in the most recent Crop Progress report are the best in 4 years for the aggregated 18 reported states and better than any time since 2007 for the Corn Belt. The projected range for the 2014/15 season-average farm price is unchanged at $3.85 to $4.55 per bushel and below this month’s lower projected 2013/14 range of $4.45 to $4.65 per bushel. The 2013/14 price range is lowered 10 cents per bushel at the midpoint based on prices reported to date and the recent decline in nearby cash and futures prices.

Global coarse grain supplies for 2014/15 are projected 2.3 million tons higher mostly with larger corn beginning stocks and production. Higher 2013/14 corn production for Brazil and India raise 2014/15 beginning stocks for both countries. Lower 2013/14 corn exports for Argentina also add to 2014/15 beginning stocks. Higher 2013/14 corn imports boost 2014/15 beginning stocks for Colombia, Egypt, and Turkey. Ukraine and China 2014/15 corn beginning stocks are lowered with higher 2013/14 exports for Ukraine and lower 2013/14 imports for China. Despite an increase in 2013/14 South Africa corn production, 2014/15 beginning stocks decline with higher 2013/14 consumption and exports.

OILSEEDS: This month’s U.S. soybean supply and use projections for 2014/15 include a small reduction in beginning and ending stocks. Lower beginning stocks reflect a higher crush projection for 2013/14. Soybean crush for 2013/14 is raised 5 million bushels to 1,700 million reflecting an increase in projected soybean meal exports. Soybean meal exports are projected at 11.5 million short tons, up 0.4 million from last month reflecting stronger-than-expected shipments this spring. Soybean ending stocks for 2013/14 are projected at 125 million bushels, down 5 million from last month. Ending stocks for 2014/15 are also reduced 5 million bushels to 325 million.

Global oilseed production for 2014/15 is projected at 516.0 million tons, up 0.8 million from last month. Rapeseed production for the European Union is raised 0.5 million tons to 22.0 million on improved yield prospects, mainly for the United Kingdom, Germany, Poland, and Romania. Other changes include increased soybean production for the European Union and increased cottonseed production for the United States. Cottonseed production is also raised for India for 2013/14.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for total meat production in 2014 is lowered from last month as lower beef and broiler production more than offsets increased pork and turkey production. Beef production is lowered as the pace of steer and heifer slaughter in the second quarter is reduced. However, carcass weights are forecast slightly higher as feed prices have moderated. Pork production is forecast higher due to a combination of larger second-quarter slaughter and higher carcass weights for the year. USDA’s Quarterly Hogs and Pigs report will be released on June 27 and provide an indication of producer farrowing intentions for the remainder of the year. Broiler production is lowered from last month as the pace of expansion remains slow. Turkey production is raised on higher second-quarter production. Egg production is raised as strong table egg prices are expected to support increased production. For 2015, no change is made to red meat or turkey forecasts, but the forecast for broiler production is reduced for early 2015.

Forecasts for 2014 beef imports are raised as demand for processing grade beef remains strong; no change is made to the export forecast. Pork imports and exports are raised based on April trade data. Broiler exports are reduced as production forecasts are lowered from last month. The slower pace of exports is expected to carry into 2015. Turkey exports are unchanged from last month.

Cattle, hog, and turkey price forecasts for 2014 and 2015 are unchanged from last month. Broiler prices are raised for 2014 as supplies are forecast smaller, but 2015 prices are unchanged from last month. Egg prices for 2014 are raised from last month as demand remains strong; prices for 2015 are unchanged.

Milk production forecasts for 2014 and 2015 are unchanged from last month. Export forecasts are raised on a fat basis for 2014 and 2015 with higher cheese exports. However, growth in 2014 exports is constrained by weaker butter sales as higher domestic prices have made U.S. butter less competitive on world markets. Skim-solids exports reflect strength in cheese and nonfat dry milk (NDM) exports. Imports for 2014 and 2015 are raised on higher imports of food ingredients.