Home Indiana Agriculture News USDA Lowers Ending Stocks in Friendly Report

USDA Lowers Ending Stocks in Friendly Report


COARSE GRAINS: The 2016/17 outlook for U.S. feed grain supplies is lowered this month
with declines for corn, sorghum, and oats beginning stocks more than offsetting an increase for barley. Projected corn production for 2016/17 is unchanged at a record 14,430 million bushels. Corn ending stocks for 2015/16 are reduced 95 million bushels as a 100-million bushel increase in the corn export forecast more than offsets a slightly higher import projection. As of early June, total U.S. corn export commitments (accumulated exports plus outstanding sales) are above year-ago levels for the first time in the 2015/16 marketing year. Reduced corn production in Brazil and harvest delays in Argentina have improved the relative competitiveness of U.S. corn in recent weeks. The U.S. corn export projection for 2016/17 is raised 50 million bushels as U.S. supplies are expected to remain more competitive in 2016/17 with less production for Brazil. Corn ending stocks for 2016/17 are projected at 2,008 million bushels, down 145 million from last month. Changes to 2016/17 sorghum beginning stocks reflect higher 2015/16 forecasts for sorghum use. Projected exports are raised 15 million bushels based on recent food aid shipments and increased export sales. Food, seed, and industrial use is expected 10 million bushels higher based on reported sorghum use for ethanol production in the latest Grain Crushings and Co-Products Production report. Projected feed and residual use and ending stocks are both lowered.
The season-average farm price for corn is raised for both 2015/16 and 2016/17. The
2015/16 price is forecast up 10 cents per bushel at the midpoint with a range of $3.60 to
$3.80 per bushel. The 2016/17 price is projected 15 cents per bushel higher at the midpoint with a range of $3.20 to $3.80 per bushel. Price outlooks for the other feed grains in 2016/17 are also raised this month. Foreign coarse grain supplies for 2016/17 are projected up 5.3 million tons, driven mostly by larger corn production in Mexico and greater barley production in the EU and Ukraine. Brazil corn production for 2015/16 is lowered 3.5 million tons to 77.5 million, as an early end to the rainy season in west-central Brazil has reduced yields for second-crop corn. Mexico corn production is raised 1.0 million tons for 2015/16 based on revisions to official government estimates and 0.7 million tons for 2016/17 reflecting a favorable start to the rainy season and improved reservoir levels. EU barley production for 2016/17 is raised 2.3 million tons, as
abundant rainfall and excellent growing conditions during grain fill boost yield prospects for Spain. Ukraine barley production is raised 0.9 million tons on higher area as the impact of fall dryness was not as large as previously expected.
Global 2016/17 coarse grain consumption is raised 4.1 million tons with larger corn and
barley feeding for Iran and greater barley feeding for the EU and Saudi Arabia. Reductions
in 2015/16 and 2016/17 Brazil corn exports are offset by higher exports for the United States and reduced imports for the EU and Mexico. Global corn ending stocks for 2016/17 are projected 1.9 million tons lower as the reduction for the United States more than offsets higher foreign stocks. At the projected 205.1 million tons, world corn stocks are expected to decline slightly in 2016/17.
OILSEEDS: This month’s U.S. soybean supply and use projections for 2016/17 include
lower beginning stocks, higher exports, and lower ending stocks. Lower beginning stocks in 2016/17 reflect higher crush and export projections for 2015/16. Soybean crush for 2015/16 is raised 10 million bushels to 1,890 million reflecting an increase in projected soybean meal exports. Soybean meal exports are raised in part on commitments through early June. Soybean exports for 2015/16 are projected at 1,760 million bushels, up 20 million with reduced soybean production and exports for Brazil and Uruguay. Soybean ending stocks for 2015/16 are projected at 370 million bushels, down 30 million from last month. Ending stocks for 2016/17 are reduced 45 million bushels to 260 million on lower beginning stocks and increased exports. Exports are raised with reductions for Brazil and Ukraine. The 2016/17 season-average price for soybeans is forecast at $8.75 to $10.25 per bushel, up 40 cents at the midpoint. Soybean meal prices are forecast at $320 to $360 per short ton, up $20 at the midpoint. Soybean oil prices are unchanged at 30.5 to 33.5 cents per pound. Global oilseed production for 2016/17 is projected at 533.9 million tons, up fractionally from last month. Sunflowerseed production is raised for Ukraine on higher planted area based on reported planting progress to date. The increase for sunflowerseed is mostly offset with reduced soybean and cottonseed production for Ukraine and China, respectively. Changes for 2015/16 include reduced soybean production for Brazil, Uruguay, and China. The Brazil soybean crop is reduced 2.0 million tons to 97.0 million reflecting the latest crop production report from the Government of Brazil. Hot, dry conditions in parts of the Center-West and northeast resulted in reduced yields.
With a lower soybean production estimate, Brazil October-September year exports and
stocks are reduced for both 2015/16 and 2016/17. Higher projected U.S. exports in 2015/16 and 2016/17 partly offset the decline to Brazil trade and reduce U.S. ending stocks. Other trade changes in 2015/16 include reduced exports for Uruguay and imports for Bangladesh, Pakistan, and Vietnam. Ukraine 2016/17 soybean exports are also cut with a lower forecast crop. With lower global soybean beginning stocks and production, and a negligible change to crush, global stocks for 2016/17 are projected at 66.3 million tons, down 1.9 million from last month.
WHEAT: Projected U.S. wheat supplies for 2016/17 are raised this month on both increased beginning stocks and larger winter wheat production. Beginning stocks are raised slightly with a 3-million-bushel decrease in 2015/16 imports partially offsetting a 5-million-bushel export reduction. Projected production for 2016/17 is up 79 million bushels mainly on improved prospects for the Hard Red Winter wheat crop in the Great Plains following excellent growing conditions throughout the spring months. Consequently, the winter wheat yield is forecast to be record high. Feed and residual use for 2016/17 is raised 30 million bushels to 200 million on the larger crop as well as increased wheat price competitiveness with corn. Imports are lowered 5 million bushels, and exports are raised 25 million bushels to 900 million, up significantly from the previous year’s depressed total but still below the five year-average. Ending stocks are raised 21 million bushels to 1,050 million, the largest in 29 years.
Global wheat supplies for 2016/17 are raised 3.9 million tons with production increases for
the EU, Russia, and the United States more than offsetting reductions for Brazil and Mexico. The EU production increase is entirely for Spain and reflects favorable growing conditions as confirmed with satellite imagery data. The production forecast for France is unchanged despite heavy rain for the month of May. Although abundant precipitation can reduce yield prospects in low-lying areas, it may increase yield elsewhere. French wheat was in excellent condition prior to the onset of the rain and expectations for a return to dryness in the latter part of the grain filling stage is anticipated to further mitigate crop losses. Production in Russia is increased on updated government estimates showing larger spring wheat area. Foreign exports for 2016/17 are up 1.0 million tons with the EU and Russia each up 0.5 million tons given their increased production. The primary global import changes are a 1.0-million-ton increase for India on low international prices increasing demand, and a 0.4-million-ton increase for Indonesia. Total world consumption is up 3.4 million tons led by a 1.2-million-ton increase for India food use, a 1.0-million-ton increase for EU feed use, and a 0.4-million-ton increase for Indonesia feed use. For the EU, the late season rain in major producing regions is expected to reduce wheat quality and increase feeding. Global ending stocks are raised fractionally and remain record large.