October WASDE shows larger than expected corn, soybean stocks

WHEAT: The outlook for 2021/22 U.S. wheat this month is for reduced supplies, lower domestic use, unchanged exports, and decreased ending stocks. Supplies are reduced primarily on lower production from the NASS Small Grains Summary, issued September 30. Supplies are also lowered on reduced imports, down 10 million bushels, to 125 million on the import pace. Annual feed and residual use is lowered 25 million bushels to 135 million despite the NASS Grain Stocks report indicating greater disappearance in the first quarter compared to last year. Significantly reduced supplies of Hard Red Spring, Durum, and White wheat for 2021/22 are expected to curtail feed and residual use for the remainder of 2021/22 along with the continued large price premium of wheat over corn. Exports are unchanged at 875 million bushels but there are offsetting by-class changes. Projected 2021/22 ending stocks are reduced 35 million bushels to 580 million, which are the lowest U.S. ending stocks since 2007/08. The projected 2021/22 season-average farm price is raised $0.10 per bushel to $6.70 on reported NASS prices to date and price expectations for the remainder of 2021/22. The global wheat outlook for 2021/22 is for reduced supplies, lower consumption, nearly unchanged trade, and smaller ending stocks. Supplies are projected falling by 8.6 million tons to 1,064.2 million, primarily on the combination of reduced beginning stocks for Iran and reduced production for Canada, Iran, and the United States. Iran’s 2021/22 beginning stocks are lowered 3.6 million, the result of a multi-year production revision from 2017/18 onward. Iran’s 2021/22 production is lowered 1.5 million tons to 13.5 million, based on indications of greater 2021/22 imports driven by reduced domestic supplies. Canada’s production is reduced 2.0 million tons to 21.0 million on reduced harvested area as increased abandonment is expected from the severe drought affecting the Prairie Provinces this past summer. Projected 2021/22 world consumption is lowered 2.6 million tons to 787.1 million with the majority of the reduction for food, seed, and industrial use in India and Canada and feed and residual use for the United States. Projected 2021/22 global trade is fractionally lower at 199.6 million tons on lower exports by Canada that are nearly offset by higher exports by Australia, the EU, and India. Projected 2021/22 world ending stocks are reduced 6.0 million tons to 277.2 million and are the lowest since 2016/17 with Iran, the United States, and Australia accounting for most of the reduction.

COARSE GRAINS: This month’s 2021/22 U.S. corn outlook is for slightly higher production, increased exports, lower feed and residual use, and larger ending stocks. Corn production is forecast at 15.019 billion bushels, up 23 million on a marginal increase in yield to 176.5 bushels per acre. Corn supplies are forecast up 72 million bushels from last month, on slightly higher production and increased beginning stocks based on the September 30 Grain Stocks report. Exports are raised 25 million bushels reflecting larger supplies and expectations of reduced competition from other major exporters. Projected feed and residual use is lowered 50 million bushels based on indicated disappearance during 2020/21. With supply rising and use falling, corn ending stocks for 2021/22 are raised 92 million bushels. The season-average corn price received by producers is unchanged at $5.45 per bushel. Grain sorghum production is forecast higher from last month, with a 2.6-bushel per acre increase in yield to 72.3 bushels per acre. Barley and oat production estimates are updated based on the September 30 Small Grains Summary report. Global coarse grain production for 2021/22 is forecast down 2.9 million tons to 1,494.0 million. The 2021/22 foreign coarse grain outlook is for lower production, virtually unchanged trade, and larger stocks relative to last month. Foreign corn production is forecast essentially unchanged as increases for the EU, Canada, Venezuela, and Serbia are largely offset by declines for Ukraine, Russia, and Guatemala. EU corn production is raised reflecting increases for Poland and Romania more than offset declines for France and Bulgaria. Corn production in Canada is higher reflecting favorable yield prospects for Ontario. Projected corn yields for Russia and Ukraine are lowered based on reported harvest results to date. Corn exports are raised for India, the United States, and the EU, with partly offsetting reductions for Ukraine, Russia, and Vietnam. For 2020/21, corn exports for Brazil are lowered for the local marketing year beginning March 2021, based on shipments through the month of September. For 2021/22, corn imports are lowered for Vietnam, Chile, Algeria, Israel, Lebanon, and Saudi Arabia, but raised for Bangladesh. Foreign corn ending stocks are higher, mostly reflecting increases for China and Mexico, with a partly offsetting reduction for Ukraine. Global corn stocks, at 301.7 million, are up 4.1 million. 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 on lower projected imports as they more than offset minimally higher production. NASS increased the average all rice yield by 2 pounds per acre, to 7,625 pounds in the October 12 Crop Production report, as production is fractionally higher. Imports are reduced 2.0 million cwt, to 36.0 million, on the continued trend of lower year-to-year long-grain monthly imports and expectations that higher freight costs and reduced availability of shipping containers will persist into 2021/22. Total domestic and residual use is decreased by 1.0 million cwt to 146.0 million on lower supplies and ending stocks are decreased to 33.2 million cwt, down 1.0 million. The season-average farm price for all rice is unchanged at $14.80 per cwt. The 2021/22 global outlook is for larger supplies, increased consumption, greater trade, and higher ending stocks. Supplies are raised by 2.0 million tons to 695.9 million for 2021/22, mostly on a larger Indian crop that would be another record. India’s 2021/22 rice exports are raised 1.5 million tons to 18.5 million but still below exports in 2020/21, now estimated at a record 20.0 million, or more than 40 percent of global trade. Global 2021/22 ending stocks are raised 1.8 million tons to 183.6 million, primarily on increases for China and India, which comprise 61 and 19 percent of world stocks, respectively.

OILSEEDS: U.S. oilseed production for 2021/22 is forecast at 130.8 million tons, up 1.5 million from last month with higher soybean production partly offset by lower forecasts for sunflowerseed, canola, peanuts, and cottonseed. Soybean production is forecast at 4.4 billion bushels, up 74 million on higher yields. Harvested area is unchanged at 86.4 million acres. The soybean yield is projected at 51.5 bushels per acre, up 0.9 bushels from the September forecast. The largest production changes are for Iowa, Minnesota, and Nebraska. Soybean supplies for 2021/22 are projected at 4.7 billion bushels, up 145 million on higher production and beginning stocks. With higher crush and unchanged exports, 2021/22 ending stocks are projected at 320 million bushels, up 135 million from last month. The U.S. season-average soybean price for 2021/22 is forecast at $12.35 per bushel, down 55 cents reflecting larger supplies. The soybean meal price is forecast at $325.00 per short ton, down $35.00. The soybean oil price forecast is unchanged at 65 cents per pound. Foreign 2021/22 oilseed production is lowered 2.4 million tons to 497.4 million on lower soybean, sunflowerseed, and rapeseed output. Soybean production is lowered for Argentina, India, and the EU. Argentina’s production is lowered 1.0 million tons to 51.0 million on lower harvested area. Sunflowerseed production is lowered for Ukraine and Russia on recent harvest results. Canola production for Canada is lowered 1.0 million tons to 13.0 million, reflecting reports by Statistics Canada. Global soybean supply and demand forecasts for 2021/22 include higher beginning stocks, lower crush, and higher ending stocks. Higher beginning stocks reflect increases for the United States, Argentina, and China. Argentina’s beginning stocks are raised on a downward revision to 2020/21 crush. The 2021/22 crush for Argentina is also lowered, leading to lower exports of meal and oil. China’s 2020/21 crush is lowered 1.0 million tons to 93.0 million based on end of year data. Global soybean ending stocks for 2021/22 are increased 5.7 million tons to 104.6 million, with higher stocks for the United States, Argentina, and China. SUGAR: U.S. beet sugar production for 2021/22 is increased by 145,945 short tons, raw value (STRV) to 5.348 million. NASS increased its forecast of national sugarbeet production by 1.063 million tons to 35.675 million. The largest gains were in the Upper Midwest at 6.13 percent on increased yield of 27.7 tons/acre and the Great Plains at 1.71 percent on increased area. Louisiana cane sugar production for the September-August crop year is reduced by 2.29 percent to 1.783 million STRV. NASS forecasts a lower yield of 32.2 tons/acre, slightly offset by processors’ forecast of slightly more sugarcane area for sugar. Fiscal year (FY) production is increased by 20,623 over the crop year total as the 2021 sugar campaign started later than originally expected and sugar expected to be produced in September is now projected to be produced after October 1 of FY 2021/22. Louisiana cane sugar production is therefore 1.804 million STRV for FY 2021/22 and 1.928 million for 2020/21. On August 24, 2021, the USDA increased the 2020/21 raw sugar TRQ by 99,318 STRV and also extended the TRQ entry period through October 31, 2021. The proportion of the sugar entering in September was higher than what was expected last month. As a consequence, imports entering under this raw sugar TRQ are increased by 64,494 STRV for 2020/21 and decreased by the same amount for 2021/22. Raw sugar TRQ imports for 2021/22 are further reduced by 151,556 STRV as the Philippines is not expected to export any of the raw TRQ sugar allocated to it by USTR. The raw sugar TRQ shortfall is thereby raised to 250,764 STRV. High tier tariff sugar imports for 2020/21 are increased by 25,000 STRV to 205,000 on the pace to date but remain at 75,000 STRV for 2021/22. Sugar use for 2021/22 is unchanged from last month but estimated higher in 2020/21 by 14,000 STRV with increased deliveries under the product re-export and polyhydric alcohol programs only partially offset by fewer deliveries for livestock feed. Ending stocks for 2020/21 are estimated marginally higher at 1,680,512 STRV while stocks for 2021/22 are projected lower by 38,361 STRV to 1,627,232. The 2021/22 ending stocks-to-use ratio is projected at 13.2 percent, down slightly from 13.5 percent last month. Mexico sugar production for 2021/22 is projected at 5.940 million metric tons (MT), an increase of 131,000 over last month and 3.9 percent greater than production in 2020/21. Reports indicate that plentiful rain has alleviated much of the lingering drought effects that afflicted the previous two growing seasons. Area harvested, sugarcane yields, and sucrose recoveries are all expected to be at levels close to averages over the period since 2013/14. Exports for 2020/21 are reduced by 184,290 MT due primarily to more sugar going into deliveries for IMMEX (59,329 MT) and into ending stocks (96,754 MT). CEDES program for stocks intended for export in the fourth quarter of 2021/22 are estimated at 28,118 MT. Deliveries for human consumption are also increased by small amounts for 2020/21 (20,000 MT) and 2021/22 (15,000 MT). IMMEX for 2021/22 is increased, as well, by 18,000 MT.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2021 total red meat and poultry production is lowered from last month as lower pork, broiler, and turkey forecasts more than offset a higher beef forecast. Beef production is raised from the previous month as lower expected steer and heifer slaughter are more than offset by higher cow slaughter and heavier average carcass weights. The pork production forecast is reduced on lower expected fourthquarter hog slaughter. Broiler and turkey production forecasts are reduced on recent hatchery and slaughter data. The egg production forecast is reduced slightly. For 2022, the total red meat and poultry forecast is reduced from the previous month. Although higher expected placements of cattle in second half 2021 are expected to support higher early-year supplies of fed cattle, placements in the first half of 2022 are lowered and fed cattle supplies in the second half or 2022 are expected to be tighter. USDA’s Quarterly Hogs and Pigs report, released on September 24, estimated a lower pig crop for June-August and lower farrowing intentions for September November. This supports lower hog slaughter expectations for first half 2022. Slower expected growth in pigs per litter during 2022 resulted in lower expected hog supplies in the second half of the year. Broiler and turkey production forecasts are reduced on expectations of a relatively slow response to improving margins. The 2022 egg production forecast is unchanged. For 2021 and 2022, beef import forecasts are raised reflecting continued strength in demand while the export forecasts are unchanged. The pork import forecasts are raised on increased supplies of pork on the global market. The pork export forecast for 2021 is reduced on weaker expected demand from China and increased competition in global markets; however, exports are increased for 2022 as growth in several key markets recovers. The broiler export forecast for 2021 is raised slightly, but no change is made to the 2022 forecast. Turkey export forecasts for 2021 and 2022 are lowered from last month. Fed cattle prices for 2021 are lowered on current price movements and relatively large supplies of fed cattle. However, the 2022 price forecast is raised on tighter expected supplies of cattle. The 2021 and 2022 hog price forecasts are raised on lower expected hog supplies. Broiler and turkey price forecasts are raised for 2021 and 2022 on lowered production. Milk production forecasts for 2021 and 2022 are reduced from last month on smaller dairy cow numbers and slower growth in milk per cow. For 2021 and 2022, fat basis import forecasts are unchanged from the previous month, while the fat basis export forecasts are raised on stronger expected sales of cheese and butterfat containing products. The skim-solids basis import forecast for 2021 is lowered slightly on weaker expected imports of milk protein concentrates, but the 2022 forecast is unchanged. Skim-solids basis export forecast for 2021 is reduced on weaker sales of skim milk powder, whey, and lactose; however, the forecast for 2022 is unchanged. For 2021, cheese, nonfat dry milk (NDM), and whey price forecasts are raised on current prices and lower expected production. The butter price is lowered slightly on current prices. For 2022, all dairy product prices are raised, largely on tighter supplies. 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 $18.45 per cwt. The all milk price forecast for 2022 is $19.20 per cwt.

COTTON: The 2021/22 U.S. cotton supply and demand estimates show lower production, lower ending stocks, and a higher price compared with last month. Production is lowered 3 percent, to 18.0 million bales as projected yields in Texas are reduced. With domestic mill use and exports unchanged, ending stocks are 500,000 bales lower. At 3.2 million bales, U.S. ending stocks in 2021/22 are projected at 18 percent of use, compared with 17 percent in 2020/21. The 2021/22 season-average farm price for upland cotton is forecast at a record-high 90.0 cents per pound, 6 cents higher than last month and nearly 2 percent above the previous record of 88.3 cents in 2011/12. The global cotton 2021/22 balance sheet shows lower consumption, higher production, and higher ending stocks compared with last month. During the first weeks of October 2021, world cotton prices have averaged over 115 cents per pound, up at least 40 percent from both yearearlier and long-run levels. While world income growth and spending on goods are expected to remain high during 2021/22, projected annual world cotton consumption growth is now 2.9 percent, compared with 3.8 percent in September. China’s consumption is reduced 1 million bales as, in addition to high prices, lagging energy production there cuts into industrial capacity. Consumption is also lower this month in Vietnam, but higher in Pakistan and Turkey. World production is 700,000 million bales higher, largely due to an increase in Pakistan. Production is also higher in Turkey, but lower in India as well as the United States. World ending stocks in 2021/22 are projected 450,000 bales higher than in September, but 3.2 million bales below 2020/21.

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