September WASDE report turns out to be a little bullish


WHEAT: The outlook for 2021/22 U.S. wheat this month is for reduced supplies, slightly higher domestic use, unchanged exports, and decreased ending stocks. Supplies are reduced as imports are lowered 10 million bushels to 135 million on the import pace. Food use is raised 2 million bushels to 964 million, reflecting an upward revision of 2020/21 food use. Exports are unchanged at 875 million bushels but there are offsetting by-class changes. Projected 2021/22 ending stocks are reduced 12 million bushels to 615 million and are 27 percent below last year and the lowest in eight years. The projected 2021/22 season-average farm price is lowered $0.10 per bushel to $6.60 on reported NASS prices to date and price expectations for the remainder of 2021/22. The global wheat outlook for 2021/22 is for increased supplies, higher consumption, more trade, and higher ending stocks. Supplies are projected rising by 7.1 million tons to 1,072.8 million, on the combination of larger beginning stocks for Canada, EU, and India and higher production for Australia, India, and China. Australia’s production is raised 1.5 million tons to 31.5 million on continued widespread favorable conditions to date. This would be Australia’s third largest wheat crop on record. India’s production is increased 1.5 million tons to 109.5 million on the government’s 4th Advance Estimate and this would be India’s fifth consecutive record crop. China’s production is increased 900,000 tons to 136.9 million, mainly on a higher area estimated by the National Bureau of Statistics. Partially offsetting these increases, Canadian production is lowered 1.0 million tons to 23.0 million, based on the Statistics Canada forecast issued August 30, and Argentina is reduced 500,000 tons to 20.0 million on dry conditions. Projected 2021/22 world consumption is raised 3.0 million tons to 789.6 million. Most of the higher consumption is for feed and residual use, led by China, increasing by 1.0 million tons to 36.0 million. Projected 2021/22 global trade is raised 1.5 million tons to 199.7 million as higher exports by Australia and India more than offset reduced exports for Canada. Projected 2021/22 world ending stocks are increased 4.2 million tons to 283.2 million with India, EU, and Canada accounting for most of the increase, although global stocks remain below last year.

COARSE GRAINS: This month’s 2021/22 U.S. corn outlook is for larger supplies, increased feed and residual use, greater exports, and higher ending stocks. Projected beginning stocks for 2021/22 are 70 million bushels higher based on a lower use forecast for 2020/21, with reductions in corn used for ethanol and exports. Corn production for 2021/22 is forecast at 15.0 billion bushels, up 246 million from last month on increases to harvested area and yield. The national average yield is forecast at 176.3 bushels per acre, up 1.7 bushels, while harvested area for grain is forecast at 85.1 million acres, up 0.6 million. Total U.S. corn use for 2021/22 is up 150 million bushels to 14.8 billion. Feed and residual use is raised 75 million bushels based mostly 2 on a larger crop and lower expected prices. Exports for 2021/22 are up 75 million bushels to 2.5 billion. With supply rising more than use, ending stocks are increased 166 million bushels to 1.4 billion. The season-average corn price received by producers is lowered 30 cents to $5.45 per bushel. This month’s 2021/22 foreign coarse grain outlook is for larger production, greater trade, and increased stocks relative to last month. Foreign corn production is forecast higher relative to last month with increases for China and Argentina more than offsetting reductions for Russia and Serbia. China corn production is raised with a boost in yield prospects, based mostly on near to above normal rainfall in the key Northeast provinces of Heilongjiang, Jilin, Inner Mongolia, and Liaoning. Argentina corn production is raised based on expectations of higher area. Foreign barley production is virtually unchanged, as increases for Australia, Ukraine, and the EU are essentially offset by declines for Canada and Russia. For China, corn feed and residual use for 2020/21 is lowered based on indicated soybean meal equivalent protein consumption and expanded use of alternative energy feedstuffs such as barley and sorghum. For 2021/22, feed and residual use is raised based mostly on a larger crop and lower expected internal market prices. Food, seed and industrial use is lowered for 2020/21 and 2021/22 based on a reduction in the expected amount of corn used for ethanol and corn product exports. Despite a forecast increase in corn production, imports are unchanged for 2021/22 as the gap between China’s domestic and international corn prices is expected to persist, particularly in the feed deficit South. Major global coarse grain trade changes for 2021/22 include larger corn exports for Argentina, with partly offsetting reductions for Serbia and Russia. Corn imports are raised for Canada and Mexico but are reduced for Vietnam. For 2020/21, for the local marketing year beginning March 2021 corn exports are lowered for Brazil but raised for Argentina. Foreign corn ending stocks for 2021/22 are raised 8.8 million tons to 261.9 million, mostly reflecting an increase for China.

RICE: The outlook for 2021/22 U.S. rice this month is for reduced supplies, lower domestic use, unchanged exports, and smaller ending stocks. Supplies are reduced mostly on smaller production, as NASS lowered 2021/22 rice production by 6.9 million cwt to 190.5 million on decreased harvested area more than offsetting a higher yield. The average all rice yield is up 79 pounds per acre to 7,623 pounds, which is the third highest on record. Long-grain production is reduced 5.8 million cwt to 144.2 million, and combined medium- and short-grain production is lowered 1.0 million cwt to 46.3 million. Total domestic and residual use is lowered by 4.0 million cwt to 147.0 million on the smaller crop size. All rice ending stocks are decreased by 3.1 million cwt to 34.2 million, down 22 percent from last year. The season-average farm price for all rice is raised $0.30 per cwt to $14.80 with increases for both long-grain and medium- and short-grain. The 2021/22 global outlook is for increased supplies, lower consumption, increased trade, and higher ending stocks. Supplies are raised by 9.5 million tons to 693.9 million, primarily the result of a multi-year upward stocks revisions for India with a corresponding reduction for India’s consumption. India’s production is also raised 1.0 million tons higher to 122.0 million on increased harvested area, which would be its second largest crop on record. World 2021/22 consumption is lowered by 2.2 million tons to 512.1 million, primarily on lower consumption by India although global consumption remains at a record. Global 2021/22 trade is raised 0.9 million tons to 48.5 million, mostly on increased exports by India on greater exportable supplies. Projected 2021/22 world ending stocks are increased by 11.7 million tons to 181.9 million, mainly on the cumulative effect of a multi-year upward revisions of India’s stocks.

OILSEEDS: U.S. soybean supply and use changes for 2021/22 include higher beginning stocks, production, exports, ending stocks, and lower crush. Higher beginning stocks reflect a lower crush forecast for 2020/21. Soybean production is projected at 4.4 billion bushels, up 35 million with lower harvested area more than offset by a higher yield forecast of 50.6 bushels per acre. Harvested area is down 0.3 million from the August forecast. Soybean crush is reduced 25 million bushels reflecting a lower forecast for domestic soybean meal disappearance. The soybean export forecast is raised 35 million bushels on increased supplies and lower prices. Ending stocks are projected at 185 million bushels, up 30 million from last month. Other changes this month include lower peanut and higher cottonseed production. Soybean and soybean meal prices for 2021/22 are reduced from the previous forecasts. The U.S. season-average soybean price is forecast at $12.90 per bushel, down 80 cents. The soybean meal price is forecast at $360 per short ton, down 25 dollars. The soybean oil price forecast is unchanged at 65 cents per pound. The 2021/22 foreign oilseed supply and demand forecasts include higher beginning stocks and lower production, exports, and crush. Foreign oilseed production is lowered 1.5 million tons to 499.8 million mainly on lower canola production for Canada and the EU. Partly offsetting is higher canola output for Australia and higher peanut production for India. Canada’s canola crop is lowered 2.0 million tons to 14 million, reflecting recent government reports. Lower canola supplies for Canada leads to lower exports of the oilseed and products to the EU, China, and the United States. Lower global rapeseed supply is offset by increased soybean beginning stocks, mainly driven by higher-than-expected 2020/21 imports for China. Higher beginning stocks for China and higher U.S. ending stocks account for most of the global 2021/22 soybean ending stocks increase, which are raised 2.7 million tons to 98.9 million. Another notable oilseed change includes higher soybean meal imports for India as the government allows shipments of soybean meal made from genetically modified soybeans through October 31.

SUGAR: U.S. beet sugar production for 2021/22 is increased by 123,841 short tons, raw value (STRV) to 5,201,683. NASS sugarbeet yield and area harvested forecasts in the September Crop Production report imply national sugarbeet production of 34.612 million tons, an increase of 2.7 percent relative to last month. Assuming average recovery, shrink, and recovery from desugared molasses, 2021/22 crop year production is forecast at 5,112,075 STRV, up from 4,988,235 last month. Adjustments made for expected August-September production in 2021 and 2022 plus sugar from imported sugarbeets from Canada yields the fiscal year 2021/22 production projection. Cane sugar production in Florida is decreased by 10,000 STRV to 2,005,000 on processor reporting. There are no changes to production in Louisiana as neither NASS nor the processors made any adjustments related to Hurricane Ida’s impact as damage assessments are still underway. Monthly high-tier tariff sugar imports covering the period July 2020 through May 2021 have now been revised by the U.S. Bureau of the Census and the changes are incorporated into USDA’s Sweetener Market Data (SMD). Implied sugar WASDE changes from last month are for an increase in 2019/20 sugar imports of 22,379 STRV to 4,165,219 and an increase of that same amount for deliveries for human consumption to 12,246,183 STRV. On August 24, 2021, the USDA increased the 2020/21 raw sugar TRQ by 90,100 metric tons, raw value (MTRV) and also extended the TRQ entry period through October 31, 2021. With the increase, the overall 2020/21 raw sugar TRQ is 1,207,295 MTRV. On August 26, 2021, USTR provided notice of country allocations of the raw sugar TRQ increase. The USDA estimates that 245,160 MTRV of the total raw sugar TRQ will not enter in September but 177,160 MTRV of that amount will enter in October. This implies a raw sugar TRQ shortfall of 68,000 MTRV or 74,957 STRV. On August 26, 2021, the Commerce Department at the request of USDA increased the Mexico 2020/21 Export Limit by 17,527 STRV of Additional U.S. Needs Sugar of a polarity of less than 99.5 degrees. This sugar is meant to be entered on or before September 30. The USDA increased re-export imports for 2020/21 by 70,000 STRV to 315,000 on the pace to date. Total imports for 2020/21 are now estimated at 3,169,134 STRV, just down slightly from last month. On September 13, 2021, the USDA is to announce in the Federal Register the 2021/22 raw sugar TRQ at 1,117,195 MTRV and the refined sugar TRQ at 222,000 MTRV. Imports for 2021/22 are projected at 3,211,813 STRV, an increase of 75,872 over last month. Changes include an increase in sugar TRQ entries of 415,747 STRV as detailed above and in high-tier tariff imports of 25,000, now totaling 75,000. Imports from Mexico are reduced by 364,875 STRV to 1,083,900. The raw sugar shortfall for 2021/22 is unchanged at 99,208 STRV. Deliveries for human consumption for 2020/21 are increased by 75,000 STRV to 12,200,000 on the strong pace of Direct Consumption Imports (that is, imports by entities that do not report to SMD). This estimate is carried over to the deliveries’ projection for 2021/22. Ending stocks for 2021/22 are projected at 1,665,593 STRV, which is marginally lower than last month, and the implied ending stocks-to-use ratio is at 13.5 percent.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2021 total red meat and poultry production is lowered from last month. Beef production is reduced from the previous month as lower expected steer and heifer slaughter and lighter carcass weights more than offset higher cow slaughter. The pork production forecast is reduced on lower expected second-half hog slaughter. The broiler production forecast is raised on recent hatchery and slaughter data while the turkey production forecast is reduced. The egg production forecast is raised slightly. For 2022, the total red meat and poultry forecast is reduced from the previous month. The beef production forecast is reduced from last month on lower expected fed cattle slaughter and lighter carcass weights. Pork production is unchanged. Broiler and turkey production forecasts are raised on higher expected prices and lower expected feed costs. The 2022 egg production forecast is reduced. For 2021, the beef import forecast is raised reflecting recent trade data; the export forecast is also raised on strong global demand from key trading partners; no changes are made to the 2022 forecasts. The pork export forecast for 2021 is reduced on recent trade data and expected slower demand growth from Asia; no change is made to the 2022 forecast. Broiler export forecasts are reduced slightly for both 2021 and 2022. The 2021 turkey export forecast is reduced slightly from last month. Fed cattle prices are raised for 2021 on current price strength and firm demand. The 2022 price forecast is also raised. The 2021 hog price forecast is raised on lower expected production. Broiler and turkey price forecasts are raised for 2021 and 2022 on demand strength. Milk production forecasts for 2021 and 2022 are reduced from last month on smaller dairy cow numbers and lower milk per cow. For 2021, the fat basis import forecast is unchanged from the previous month, while the fat basis export forecast is raised on strong sales of cheese and butter and milk fat. The skim-solids basis import forecast for 2021 is unchanged from last month, but the export forecast is raised on firm global demand for skim milk powder (SMP), cheese, and whey. For 2022, the fat basis imports are raised on strong demand for imported cheese, while the fat basis export forecast is raised as U.S. butter is expected to be remain competitive in international markets. No change is made to the 2022 skim-solids basis import forecast; however, skim-solids basis exports are raised from last month on continued strong global demand for SMP and whey. For 2021 and 2022, butter, cheese, nonfat dry milk (NDM) price forecasts are raised on improving demand and lower production. The whey price forecast is unchanged for both years. The 2021 and 2022 Class III and Class IV price forecasts are raised from last month on higher dairy product prices. The 2021 all milk price is forecast higher at $18.15 per cwt. The all milk price forecast for 2022 is $18.40 per cwt.

COTTON: Beginning stocks are slightly lower than last month in the 2021/22 U.S. cotton estimates, but a much larger increase in production means that both exports and ending stocks are higher than estimated in August. U.S. cotton production is forecast at 18.5 million bales, up 1.2 million bales despite a 4 percent decline in harvested area, largely due to increased projected yields in Texas. With both world trade and U.S. supplies higher this month, U.S. exports are 500,000 bales higher and ending stocks are 700,000 bales higher. A higher season average farm price for upland cotton is also expected, up 4 cents per pound from last month to 84 cents. World 2021/22 cotton ending stocks are 540,000 bales lower this month as a 1.4-million-bale world consumption increase spread over 2021/22 and the year before more than offsets a 750,000-bale increase in 2021/22 world production. Consumption is projected higher in both years for Pakistan, Bangladesh, Brazil, and several smaller countries. Turkey’s consumption was also increased 100,000 bales for 2021/22, and Vietnam’s lowered by the same amount due to recent problems with COVID-19. World 2021/22 production is higher this month as increases for the United States, Australia, and Argentina offset declines in India, Greece, and several countries in West Africa’s Franc Zone. World trade in 2021/22 is still projected down from the previous year’s record 48.5 million bales, but is projected 500,000 bales higher than in August, at 46.8 million bales.


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