Home Indiana Agriculture News USDA Forecasts Record High Corn Supplies, Global Soybean Production Increase

USDA Forecasts Record High Corn Supplies, Global Soybean Production Increase


The May World Ag Supply and Demand Estimates report predicts higher corn and soybean production compared to last year.

The corn crop is projected to be a record 16 billion bushels, up from last year on the increased area and a return to trend yield. The yield projection is 178.5 bushels, with total corn supplies predicted at 18.1 billion bushels.

The season-average farm price is projected at $3.20 a bushel, a 40-cent drop from last year and the lowest since 2006-07.

The soybean crop is projected to be 4.125 billion bushels, up 568 million from last year. Yield is expected to be 49.8 bushels per acre. Soybean supplies are predicted to rise five percent from last year to 4.72 billion bushels.

The season-average soybean price is projected at $8.20 a bushel, down 30 cents from the previous marketing year.

USDA says total wheat production will be three percent lower than last year, coming in at 1.866 billion bushels, with the all-wheat yield at 49.5 bushels per acre, which is down 2.2 bushels from last year. The projected season-average farm price for wheat is $4.60 a bushel, unchanged from last year.

The full USDA World Agricultural Supply and Demand Estimates report can be viewed here and more information is below.

WHEAT: The initial outlook for 2020/21 U.S. wheat is for smaller supplies, decreased domestic use, lower exports, and reduced stocks. Supplies are decreased by 121 million bushels from 2019/20 on lower carry-in stocks and smaller production. The 2020/21 U.S. wheat crop is projected at 1,866 million bushels, down 3 percent from last year on lower yields offsetting higher harvested acreage. The all-wheat yield is projected at 49.5 bushels per acre, down 2.2 bushels from last year. The first 2020 NASS survey-based winter wheat production forecast of 1,255 million bushels is down 4 percent from 2019, on lower Hard Red Winter and White Winter production. Total 2020/21 domestic use is projected down nearly 3 percent on reduced feed and residual use as record-large 2020/21 corn supplies are expected to displace wheat for feeding. Higher food use is partially offsetting as 2020/21 is projected up 2 million bushels to 964 million, up from a revised 2019/20 estimate of 962 million, which was raised 7 million this month. The NASS Flour Milling Products report, issued on May 1, indicated an unusually large volume of wheat was ground for flour in the first quarter of 2020. Exports for 2020/21 are projected at 950 million bushels, down 20 million from the revised 2019/20 exports. Greater global 2020/21 export competition is expected for the United States with several major exporters projected having larger supplies. Projected 2020/21 ending stocks are 69 million bushels lower than last year at 909 million. The projected season-average farm price is $4.60 per bushel, unchanged from last year as the outlook for low U.S. corn prices is expected to restrain 2020/21 U.S. wheat prices.

The initial outlook for 2020/21 international wheat is for larger supplies, increased trade, greater consumption, and higher ending stocks. Foreign supplies are projected to increase 23.2 million tons to 982.4 million as several major exporters (Argentina, Australia, Canada, and Russia) are projected to have higher production for 2020/21. Australia is projected with the largest increase from last year to 24.0 million tons, up 8.8 million as it recovers from a multi-year drought. Conversely, the EU is projected to decline nearly 12 million tons to 143 0 million on lower harvested area and yields. Ukraine production is also projected lower at 28.0 million tons, but this would still be the second largest production on record.

Projected 2020/21 global trade is 4.6 million tons, or more than 2 percent higher, at a record-high 188.0 million on greater exportable supplies. Imports are projected to rise, primarily on increased demand by China, Algeria, Morocco, the EU, Iraq, and Uzbekistan. Russia is projected as the 2020/21 leading world wheat exporter at 35.0 million tons with Argentina, Australia, and Canada also projected higher while the EU, Ukraine, and United States are lower. Projected 2020/21 world consumption is increased 4.9 million tons to a record-large 753.5 million as higher food, seed, and industrial use more than offsets reduced feed use on greater global corn supplies. Projected 2020/21 world ending stocks increased 5 percent to a record-large 310.1 million tons with China accounting for 52 percent of the total.

COARSE GRAINS: The U.S. feed-grain outlook for 2020/21 is for record high production and domestic use, greater exports, and larger ending stocks. The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and a return to trend yield. The yield projection of 178.5 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period. Despite beginning stocks that are down slightly from a year ago, total corn supplies are forecast record high at 18.1 billion bushels.

Total U.S. corn use in 2020/21 is forecast to rise relative to a year ago with increases for domestic use and exports. Food, seed, and industrial (FSI) use is projected to rise 245 million bushels to 6.6 billion. Corn used for ethanol is projected to increase from the 2019/20 COVID-19 reduced levels, based on expectations of a rebound in U.S. motor gasoline consumption. Sorghum FSI for 2020/21 is lower as expectations of increased sorghum import demand from China reduce available domestic supplies. Corn feed and residual use is projected higher mostly reflecting a larger crop and lower expected prices.

U.S. 2020/21 corn exports are forecast to rise 375 million bushels to 2,150 million, driven by growth in world corn trade. U.S. market share is expected to increase from the 2019/20 multi-year low, but remains below the average level seen during 2015/16 to 2019/20 with expected competition from Argentina, Brazil, and Ukraine.

With total U.S. corn supply rising more than use, 2020/21 U.S. ending stocks are up 1.2 billion bushels from last year and if realized would be the highest since 1987/88. Stocks relative to use at 22.4 percent would be the highest since 1992/93. With larger stocks relative to use, the season average farm price is projected at $3.20 per bushel, down 40 cents from 2019/20 and the lowest since 2006/07.

The global coarse grain outlook for 2020/21 is for record production and use and larger ending stocks. World corn production is forecast record-high, with the largest increases for the United States, Brazil, Ukraine, Mexico, and Canada. Global corn use is expected to grow 4 percent, with foreign consumption up 3 percent. Global corn imports are projected to increase 4 percent. Notable forecast increases in corn imports include the EU, Egypt, Mexico, Iran, Morocco, and Vietnam. Global corn ending stocks are up from a year ago, as a decline in foreign stocks is more than offset by an increase for the United States. Excluding China and the United States, ending stocks are up 4 percent relative to a year ago.

For China, total coarse grain imports are forecast at 18.3 million tons, up 1.3 million from 2019/20 but below the 2014/15 record of 25.7 million tons. Since 2001/02, China’s largest individual coarse grain import total occurred during 2014/15 with 10.2 million tons of sorghum. Over that same time period realized corn imports reached a high of 5.5 million tons. Expectations are for robust demand from China in 2020/21, with 7.0 million tons of corn, 6.0 million of barley, and 5.0 million of sorghum imports from all sources.

RICE: For the 2019/20 market year, exports are reduced 1.0 million cwt to 98 million and the all rice season-average farm price (SAFP) is lowered $0.20 per cwt to $13.00. The 2020/21 outlook for U.S. rice is for larger supplies, exports, domestic use, and ending stocks. U.S. 2020/21 all rice production is projected at 216.2 million cwt, up 17 percent from the previous year. Partly offsetting the increased 2020/21 crop is a 32 percent decrease in beginning stocks. The total 2020/21 rice supply is projected at 279.3 million cwt, up 7 percent from last year. U.S. 2020/21 total use is projected at 237.5 million cwt, up 3 percent from the previous year with both domestic and residual use and exports higher. All rice ending stocks for 2020/21 are projected at 41.8 million cwt, up 37 percent from the previous year’s low level. The 2020/21 SAFP is projected at $12.90 per cwt, down $0.10 from the 2019/20 revised SAFP. World production for 2020/21 is projected at 502.0 million tons, a record, and up nearly 2 percent from the previous year. Thailand and China lead production increases with crops raised 2.4 million tons and 2.3 million tons, respectively. The largest production declines are for the Philippines and Brazil. Global rice consumption is projected at a record-large 498.1 million tons, up 7.9 million from the previous year. Global exports for 2020/21 are projected at 45.2 million tons, up 2.8 million tons from the previous year. With supplies rising more than use, global 2020/21 ending stocks are a record-large 184.2 million tons with China and India respectively holding 64 and 21 percent.

OILSEEDS: The 2020/21 outlook for U.S. soybeans is for higher supplies, crush, exports, and lower ending stocks compared to 2019/20. The soybean crop is projected at 4.125 billion bushels, up 568 million from last year on increased harvested area and trend yields. Despite lower beginning stocks, soybean supplies are projected up 5 percent from 2019/20 to 4.720 billion bushels. Total U.S. oilseed production for 2020/21 is forecast at 123.2 million tons, up 16.1 million from 2019/20 mainly on higher soybean production. Production forecasts are also higher for sunflowerseed, peanuts, and cottonseed. Canola production is forecast lower on a reduced yield.

The U.S. soybean crush for 2020/21 is projected at 2.130 billion bushels, up slightly from the 2019/20 forecast with higher soybean meal disappearance partly offset by lower soybean meal exports. U.S. soybean exports are forecast at 2.050 billion bushels, up 375 million from the revised forecast for 2019/20. With higher global soybean import demand for 2020/21 led by expected gains for China, U.S. export share is expected to rise to 34 percent from the 2019/20 record low of 30 percent. U.S. ending stocks for 2020/21 are projected at 405 million bushels, down 175 million from the revised 2019/20 forecast. The 2020/21 U.S. season-average soybean price is projected at $8.20 per bushel, down 30 cents from 2019/20. Soybean meal prices are forecast at $290 per short ton, down $10.00 from 2019/20. Soybean oil prices are forecast at 29.0 cents per pound, up 0.5 cents from 2019/20.

The global oilseed outlook for 2020/21 includes larger supplies with lower beginning stocks offset by record production; however, ending stocks are expected to decline modestly with rising use. Global oilseed production for 2020/21 is projected at a record 605.9 million tons, up 30.7 million from 2019/20 mainly on higher soybean production. Global soybean production is forecast up 26.6 million tons to 362.8 million, with Brazil’s crop rising 7.0 million tons to 131.0 million, Argentina’s crop is up 2.5 million tons to 53.5 million, and U.S. production rising from last year’s decline. Partly offsetting are smaller soybean crops projected for China and Ukraine. Global production of high-oil content
seeds is projected up 3 percent from 2019/20 on increased canola production for Canada, Australia, and Ukraine, and higher sunflowerseed production for Argentina and Ukraine. Partly offsetting is lower sunflowerseed production for Turkey.

Global protein meal consumption outside of China is projected to increase 2 percent in 2020/21, down from the prior 5-year average of 3 percent due to the slowing global economy. Protein meal consumption in China at 6 percent is stronger than the prior few years, however, as China recovers from the August 2018 outbreak of African Swine Fever. With higher protein meal demand, soybean exports are expected to increase 8.0 million tons to 161.9 million. China accounts for most of the increase in shipments with imports rising 4 million tons to 96 million. Global soybean ending stocks are projected at 98.4 million tons, down 1.9 million from 2019/20. Lower year-over-year U.S. stocks offset higher stocks in China, Brazil, and Argentina.

SUGAR: U.S. sugarbeet production for 2020/21 is projected at 33.672 million tons with yield forecast at 30.11 tons/acre. Slower-than-average planting progress in the Upper Midwest has dampened prospects for significant gains in the national yield over last year. Assuming average levels of beet pile shrink and slicing recovery, beet sugar production from this crop is projected at 4.965 million short tons, raw value (STRV). Beet sugar production for 2019/20 is estimated to fall slightly from last month due to processors’ reporting. Cane sugar production for 2020/21 is projected at 4.040 million STRV. Production in Florida and Texas are expected to be close to prior year levels. Louisiana production is projected higher at 1.800 million STRV on a return to trend yield and recovery.

Imports for 2020/21 are projected at 3.461 million STRV. TRQ imports are projected at 1.395 million STRV with levels set at minimum levels consistent with the WTO and FTA bindings. Projected 2020/21 TRQ imports of specialty sugar include only the WTO minimum quantity as additional quantities have not been announced by the Secretary of Agriculture. The WTO raw sugar TRQ shortfall for 2020/21 is projected at 99,208 STRV. High-tier tariff imports for 2020/21 are projected at 50,000 STRV. Imports from Mexico for 2020/21 are projected at 1.660 million STRV. Imports from Mexico for 2019/20 are reduced by 148,840 STRV to 1.050 million on lower production in Mexico. Deliveries to domestic users for 2020/21 are projected at 12.320 million STRV, flat with levels estimated for 2019/20. Ending stocks for 2020/21 are residually projected at 1.468 million STRV, implying a stocks-to-use ratio of 11.97 percent, up from 10.38 percent in 2019/20.

Mexico production for 2020/21 is set at 6.100 million metric tons (MT), assuming a return to normal weather and area harvested projected at about the same level as this year. Production for 2019/20 is reduced by 110,000 MT to 5.125 million, mainly on reduced area for harvest and below-average yields and sucrose recovery. Deliveries of high fructose corn syrup for 2020/21 are projected at 1.493 million MT, the same level as now estimated for 2019/20. Per capita sweetener deliveries for 2020/21 for human consumption are projected at the same level as in 2019/20, implying sugar deliveries at 4.140 million MT. IMMEX deliveries for 2020/21 from domestic and imported sources are projected at 435,000 MT, the same as estimated for 2019/20. Ending stocks for both 2020/21 and 2019/20 are set equal to 2.5 months of forecast domestic sugar deliveries before the start of the succeeding sugarcane harvest. Total exports are residually projected but exports to the United States are projected at the expected level of U.S. Needs as defined in the amended Suspension Agreements.

LIVESTOCK, POULTRY, AND DAIRY: Total U.S. red meat and poultry production for 2021 is projected to be above 2020 as the sector continues to recover from the impacts of COVID-19 in 2020. Beef production is forecast higher as cattle placements in 2020 are expected to shift toward the latter part of the year and be marketed and slaughtered in 2021. Heavier carcass weights are also expected to support higher production. Pork production is expected to increase as the sector recovers from the slaughter adjustments of 2020. Broiler production is expected to surpass 2020 levels on expectations of improved returns. Turkey and egg production are forecast higher as producers respond to favorable prices in 2020. For 2020, the total red meat and poultry production forecast is reduced from last month as the sector adjusts to COVID-19 and economic uncertainty.

Beef production is reduced as lower expected cattle slaughter more than offsets heavier carcass weights. Pork production is forecast lower on a slower expected pace of slaughter. However, heavier hog carcass weights are expected to partially offset lower production. Broiler and turkey production are lowered from last month as producers respond to weaker demand and adjustments to the pace of slaughter due to COVID-19. Egg production for 2020 is also reduced from last month.

Red meat and poultry exports are expected to increase in 2021 on expanding production and an expected increase in global demand. For 2020, export forecasts for beef and pork are reduced on slower expected export growth due to economic weakness and reduced supplies. Broiler exports are raised on current trade data and firm demand; the turkey export forecast is virtually unchanged.

For 2021, fed cattle, hog, and broiler prices are forecast higher on stronger expected demand, despite larger production. The 2021 turkey price forecast is fractionally below 2020. Egg prices in 2021 are forecast lower on supply pressure. For 2020, fed cattle prices are forecast lower on current prices and weak demand. Hog prices are raised from last month on current prices and improved demand expectations as the year progresses. Broiler prices are forecast lower on current prices, while turkey and egg price forecasts are raised.

Milk production for 2021 is forecast higher than 2020 on stronger expected growth in milk per cow, despite a slightly smaller dairy cow herd. Commercial exports on a fat basis are about the same as 2020 while skim-solids basis exports are forecast higher than 2020 on relatively firm demand. Imports on both a fat basis and skim-solid basis are forecast above 2020. With improved domestic and export demand, all dairy products prices are forecast higher in 2021. Both Class III and Class IV prices are forecast higher on stronger product prices. The 2021 all milk price is forecast higher at $15.00 per cwt.

The 2020 milk production forecast is raised from the previous month primarily on higher-than expected cow numbers. The fat basis export forecast is raised from the previous month on recent trade data and stronger expected global demand. The fat basis import forecast is also raised from last month on stronger expected imports of cheese. On a skim-solids basis, the export forecast for 2020 is raised on stronger global import demand for skim milk powder, whey products, and a number of dairy products, while the import forecast is raised on increased imports of cheese and milk protein products. Cheese and whey prices are raised from the previous month resulting in a higher Class III price forecast. Butter and NDM prices are lowered from last month, resulting in a lower Class IV price forecast. The 2020 all milk price is forecast at $14.55 per cwt.

COTTON: The U.S. cotton forecasts for 2020/21 include larger beginning stocks, consumption, exports, and ending stocks compared with the year before. Production is forecast at 19.5 million bales—400,000 bales less than the year before, based on 13.7 million planted acres as indicated in the NASS March Prospective Plantings report. Planted area is expected to be virtually unchanged from 2019/20, but harvested area is projected 2 percent lower, as abandonment rises from 2019/20.

The yield is projected only slightly higher, using 10-year regional averages. Domestic mill use and exports are expected to rebound as the world economy begins to recover. Mill use is expected to rise 200,000 bales, and exports by 1 million; but ending stocks are expected to rise 600,000 bales to 7.7 million, equivalent to 41 percent of use. This would be marginally higher than in 2019/20 and the highest since 2007/08’s 55 percent. The price received by upland producers is forecast at 57 cents per pound, slightly below 2019/20.

For 2019/20, U.S. cotton production is raised slightly from last month. The export forecast is unchanged, but expected consumption is 200,000 bales lower, and ending stocks 400,000 bales higher.

World ending stocks in 2020/21 are projected to rise for a second consecutive year, but at a much slower pace. With harvested area down globally, production is expected to decline 3.7 million bales, while consumption is expected to rise 11.5 million bales as the global economy begins recovering. Global ending stocks are expected to rise 2.3 million bales, but fall as a share of consumption, from 93 percent in 2019/20 to 85 percent.

For 2019/20, the world consumption forecast is reduced to 105.0 million bales, down 5.6 million from the previous forecast and 12.7 percent below the previous year. This would be the largest annual decline in world consumption since the 19th century. World production is raised 1 million bales from the previous month, and 2019/20 ending stocks are 5.9 million higher. The revised year to-year increase in global ending stocks is 16.9 million bales.

Source: NAFB News Service & USDA