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USDA Report Bearish


CORN: Corn imports are projected 10 million bushels higher based on recent imports of corn into southeastern U.S. feed markets. Corn exports are projected 50 million bushels lower as larger supplies of South American corn further increase competition for U.S. exports. Partly offsetting is a 25-million-bushel increase in projected U.S. corn use for ethanol based on the strong pace of ethanol production during January. The projected range for the corn season-average farm price is narrowed 5 cents on both ends to $3.35 to $3.85 per bushel. Global coarse grain supplies for 2015/16 are projected 1.3 million tons higher on increased production by Brazil and Argentina.

SOYBEANS: U.S. soybean ending stocks for 2015/16 are projected at 450 million bushels, up 10 million from last month due to a lower crush. Soybean production, trade, and other uses remain unchanged. Crush is reduced 10 million bushels to 1,880 million reflecting a lower soybean meal export forecast. Meal exports are reduced on sluggish shipments and sales as well as greater expected competition from Argentina. The 2015/16 season-average soybean price range projection is unchanged at $8.05 to $9.55 per bushel. Global oilseed stocks are projected at 91.2 million tons, up 0.3 million. Higher soybean stocks in Argentina, the United States, and Turkey, more than offset lower rapeseed stocks in the EU and Canada.

WHEAT: U.S. 2015/16 wheat exports are lowered 25 million bushels this month to 775 million. U.S. exports are lowered on increased international competition, especially from Canada. This export total is the lowest since 1971/72. U.S. wheat ending stocks are raised 25 million bushels and are the largest since 2009/10. Global wheat supplies for 2015/16 are raised 2.1 million tons primarily on increased beginning stocks and slightly larger production.  World wheat consumption for 2015/16 is lowered 4.7 million tons led by a 4.0-million-ton decrease for China as government policies reduce the food and feed uses of wheat in favor of other grains.

RICE: There are no changes to this month’s 2015/16 U.S. rice supply and use projections. The all rice price is lowered $0.40 per cwt at the high end and $0.20 at the low end to a range of $12.50 to $13.30. The long-grain price is lowered $0.20 per cwt at the midpoint and the medium/short-grain price is lowered $0.60 per cwt at the midpoint. Global rice supplies for 2015/16 are reduced 1.0 million tons on decreased production and lower beginning stocks.

SUGAR: U.S. sugar production for 2015/16 is projected at 8.849 million short tons, raw value. Beet sugar production is reduced by 147,594 STRV to 5.010 million due to lower expected sucrose recovery from sliced sugar beets. U.S. cane sugar refiners are expected to import more sugar in 2015/16 under the USDA re-export import program to take advantage of the large margin between domestic and world raw sugar prices. The increase is projected at 61,524 STRV, implying total imports of 300,000.

COTTON: A 5-percent reduction in exports is raising projected 2015/16 U.S. cotton ending stocks this month. The production and domestic mill use forecasts are unchanged. Exports are reduced 500,000 bales to 9.5 million, reflecting continued sluggish export sales, attributable mainly to sharply lower imports by China relative to last season. Ending stocks are now projected at 3.6 million bales, or 27.5 percent of total use. Global stocks are now forecast at just over 104 million bales.

LIVESTOCK, POULTRY, AND DAIRY: The 2016 forecast of total red meat and poultry production is raised from last month as higher forecast pork and broiler production more than offsets reduced forecasts for beef and turkey. USDA’s Cattle report estimated that the cattle inventory continued to increase and pointed to a higher level of cattle outside feedlots. However, with lower year-over placements in fourth-quarter of 2015 and only modest increases expected in first-half 2016 placements, marketings and fed cattle slaughter forecasts for 2016 are reduced.

Pork production is raised as slaughter during January was above expectations. Broiler production is higher as recent hatchery data shows faster-than-expected growth in chicks placed and bird weights continue to increase. Turkey production is reduced on hatchery data. Egg production is raised on increased hatching egg production.

The milk production forecast for 2016 is raised from last month as the cow herd is adjusted slightly to reflect the January 1 dairy cow inventory reported in USDA’s Cattle report and milk per cow is raised for the first quarter.