WASDE report shows record corn and soybean yields


WHEAT: The outlook for 2021/22 U.S. wheat this month is for smaller supplies, reduced domestic use, lower exports, and higher ending stocks. Imports are lowered 10 million bushels to 100 million on a slower than expected pace for Durum and Hard Red Spring. Feed and residual use is lowered 25 million bushels to 110 million on lower implied feed and residual use in the second quarter, based on December 1 stocks reported in today’s NASS Grain Stocks report. Seed use is unchanged at 66 million bushels, reflecting the latest estimated seed use for winter wheat plantings in the fall of 2021 reported in today’s NASS Winter Wheat and Canola Seedings report. Exports are reduced 15 million bushels to 825 million bushels with all the reduction in Hard Red Winter. U.S. wheat sales and shipments continue to be sluggish as U.S. wheat remains uncompetitive in several markets. Projected 2021/22 ending stocks are raised 30 million bushels to 628 million but still down 26 percent from last year and the lowest level since 2013/14. The season-average farm price is raised $0.10 per bushel to $7.15 based on NASS prices reported to date and expectations for prices in the remainder of the marketing year. The 2021/22 global wheat outlook is for stable supplies, decreased consumption, reduced exports, and increased stocks. Production increases in Argentina and the EU are offset by decreased production in Brazil and Paraguay and lower beginning stocks for Russia. Argentina’s production is increased 0.5 million tons to a record 20.5 million on updated harvest results. Russian beginning stocks are lowered 0.6 million tons on larger end-of season exports in 2020/21. World 2021/22 consumption is lowered 1.9 million tons to 787.5 million, primarily due to lower feed and residual use for the United States, the EU, and Ukraine. Relatively higher wheat prices compared to feed grains are expected to reduce global feed use. Projected 2021/22 global trade is lowered 1.1 million tons to 204.4 million as reductions in exports for Russia and the United States are only partially offset by higher exports from the EU. Russia recently announced a wheat export quota of 8.0 million tons from mid-February until the end of June, which is expected to constrain their exports in the latter half of the marketing year. Russia’s exports are reduced 1.0 million tons to 35.0 million while EU exports are raised 0.5 million tons to 37.5 million. Projected 2021/22 world ending stocks are raised 1.8 million tons to 280.0 million, with increases primarily for the United States, Russia, Kazakhstan, and Argentina. However, 2021/22 global ending stocks are still forecast at the lowest level since 2016/17.

COARSE GRAINS: This month’s 2021/22 U.S. corn outlook is for higher production, greater food, seed, and industrial use (FSI), lower exports, and larger ending stocks. Corn production is estimated at 15.115 billion bushels, up 53 million on a 0.3-million acre increase in harvested area. Total corn use is virtually unchanged at 14.835 billion. Exports are lowered 75 million bushels to 2.425 billion, reflecting expectations of increased competition from other exporters. FSI use is raised 80 million bushels. Corn used for ethanol is raised 75 million bushels to 5.325 billion, based on data through November from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of December. The projected amount of corn used for glucose and dextrose is raised 5 million bushels. Feed and residual use is unchanged at 5.650 billion, based on indicated disappearance during the September November quarter as reflected by the Grain Stocks report. With use essentially unchanged and supply rising, corn stocks are raised 47 million bushels. The season-average corn price received by producers is unchanged at $5.45 per bushel. Global coarse grain production for 2021/22 is forecast 1.6 million tons lower to 1,500.1 million. This month’s foreign coarse grain outlook is for lower production, consumption, and stocks. Foreign corn production is forecast lower with declines for Brazil, Argentina, Kenya, Mexico, the EU, and Paraguay that are partially offset by an increase for Ukraine. For Argentina, dryness during December reduces yield prospects for early-planted corn in key central growing areas, although with an increase in late-planted corn area for much of the crop the critical phase of the growing season lies in the months ahead. Brazil is lowered reflecting reduced yield expectations for first-crop corn in southern Brazil. Other major coarse grain production changes include updated barley, sorghum, and millet production for China based on the latest information from the Rural Statistical Yearbook. Major global coarse grain trade changes for 2021/22 include greater corn exports for Ukraine, Pakistan, and Tanzania with a reduction for Paraguay. For 2020/21, Argentina and Brazil’s exports for the marketing year beginning in March 2021 are raised based on observed shipments to date. For 2021/22, corn imports are raised for Kenya, Brazil, Canada, and Mexico, but lowered for Bangladesh. Barley imports are raised for Iran but lowered for Saudi Arabia. Foreign corn ending stocks are lower, mostly reflecting reductions for Brazil, Argentina, and Pakistan. Global corn stocks, at 303.1 million tons, are down 2.5 million. RICE: The outlook for 2021/22 U.S. rice this month is for smaller supplies, lower domestic use, decreased exports, and reduced ending stocks. Supplies are reduced on a lower production estimate and decreased imports. All rice 2021/22 production is estimated at 191.8 million cwt, down 2.0 million from the previous estimate. The all rice average yield is estimated at 7,709 pounds per acre, down 47 pounds from the prior estimate but still a record. Imports are lowered 2.5 million cwt to 31.0 million with reductions in both long-grain and medium- and short-grain on a continued sluggish pace. All rice domestic and residual use is lowered 2.0 million cwt to 145.5 million on reduced production and imports. Exports are lowered by 1.0 million cwt to 88.0 million; the decline is all for medium- and short-grain on the continued weak pace of sales and shipments. Projected 2021/22 all rice ending stocks are 33.0 million cwt, down 1.5 million from last month and down 24 percent from last year. The projected 2021/22 all rice season-average farm price is raised $0.30 per cwt to $15.10 with increases for both the long-grain and medium-and short grain prices. The 2021/22 global outlook is for smaller supplies, reduced consumption, fractionally higher trade, and lower stocks. Rice supplies are reduced 1.4 million tons to 696.4 million, primarily on lower beginning stocks for Sri Lanka and Thailand and decreased production for Mali and Sri Lanka. Global 2021/22 consumption is lowered 0.6 million tons to 510.3 million but remains a record. World trade is marginally higher at 49.9 million as higher exports by India, Vietnam, and China more than offset reductions for Brazil and Paraguay. Projected 2021/22 world ending stocks are lowered 0.7 million tons to 186.1 million, primarily on reductions for Sri Lanka, India, and Thailand.

OILSEEDS: U.S. oilseed production for 2021/22 is estimated at 130.6 million tons, up 0.3 million from last month. Larger soybean, canola, sunflower seed, and peanut crops are partly offset with lower cottonseed production. Soybean production is estimated at 4.44 billion bushels, up 10 million with gains for Iowa and Indiana. Harvested area is estimated at 86.3 million acres, down slightly from the previous report. Yield is estimated at 51.4 bushels per acre, up 0.2 bushels. Soybean supplies are raised 11 million bushels on higher production and slightly higher beginning stocks. With crush and export forecasts unchanged, ending stocks are projected at 350 million bushels. The U.S. season-average soybean price for 2021/22 is forecast at $12.60 per bushel, up 50 cents, reflecting tighter global soybean stocks and lower production forecasts for Brazil, Argentina, and Paraguay. The soybean meal price is projected at $375 per short ton, up 45 dollars. The soybean oil price forecast is unchanged at 65.0 cents per pound. The 2021/22 global soybean outlook includes lower production, crush, exports, and stocks. Foreign soybean production is lowered 9.5 million tons on reduced crops for Brazil, Argentina, and Paraguay. Brazil’s soybean crop is lowered 5 million tons to 139 million, reflecting dry weather conditions in December and early January in southern Brazil. Argentina’s crop is reduced 3 million tons to 46.5 million on both a lower area and yield, resulting in lower crush and exports of meal and oil. Paraguay’s crop is lowered 1.5 million tons to 8.5 million leading to lower exports mainly to neighboring countries. Global soybean stocks are reduced 6.8 million tons to 95.2 million on lower stocks for Brazil and Argentina. Other notable oilseed changes include lower palm oil production for Malaysia and higher rapeseed production for India on a faster-than-expected planting pace.

SUGAR: The U.S. sugar supply for 2021/22 is increased 94,689 short tons, raw value (STRV) as increases in production and beginning stocks are only partially offset by a reduction in imports. Louisiana cane sugar production for 2021/22 is increased by 144,333 STRV to 1,856,571 on industry reporting. The sugarcane harvest is finishing very strong with good reported sucrose content and will continue longer than usual into the second half of January. Beet sugar is increased by 7,650 STRV on small increases in sugar recovery and in sugar beets for slicing. Beginning stocks are increased by 2,915 STRV on revisions made in the 2020/21 Sweetener Market Data for increased cane sugar production. Raw sugar imports entering under the 2020/21 TRQ that had been extended to December 31 were 55,060 STRV below what was expected last month. Imports entering under calendar year FTA TRQs were decreased by 5,149 STRV on less sugar entering before December 31 than had been allocated. Ending stocks for 2021/22 are now projected at 1,773,038 STRV, implying an ending stocks-to-use ratio of 14.37 percent, up from 13.60 last month. Mexico supply and use for both 2020/21 and 2021/22 are unchanged from last month.

LIVESTOCK, POULTRY, AND DAIRY: The 2021 total red meat and poultry production estimate is raised from last month. The beef production estimate is raised on higher non-fed cattle slaughter and heavier average carcass weights. Pork production is reduced on the slower pace of slaughter in late 2021. Broiler production is raised on recent slaughter data while turkey production is unchanged from the previous month. Egg production is reduced on slightly lower table egg production. For 2022, the total red meat and poultry forecast is raised from the previous month as higher expected beef and broiler production more than offsets lower pork production. Higher expected placements in late 2021 and first-half 2022 will support greater fed cattle supplies during much of 2022. Slightly heavier carcass weights and greater non-fed cattle slaughter in the first half of the year also supports increased beef production. USDA will release its semi-annual Cattle report on January 31, providing estimates of heifers held for breeding and an insight into the number of feeder cattle available for placement during 2022. The pork production forecast for 2022 is reduced from the previous month as slower expected hog slaughter in the second half of the year more than offsets higher slaughter expectations in the first and second quarters. In the December Quarterly Hogs and Pigs report, producers indicated intentions to farrow fractionally fewer sows in the first half of 2022 than in 2021; hogs from this pig crop will likely be slaughtered during the second half of 2022. First quarter broiler production is raised on hatchery data; no change is made to the outlying quarters. No change is made to turkey and egg production forecasts. For 2021, the beef import estimate is raised on recent trade data while beef exports remain unchanged. The pork export estimate is lowered on recent trade data. Poultry export estimates are lowered from last month, reflecting U.S. Census Bureau revisions to second quarter data; no change is made to export estimates for the outlying quarters. For 2022, beef import and export forecasts are unchanged. The pork export forecast is lowered on continued weak import demand from China and expectations of increased competition from competing exporters in a number of other markets. Broiler export forecasts are reduced on slower expected global demand. Livestock and poultry price estimates for 2021 are adjusted to reflect December price data. For 2022, cattle, broiler, turkey, and egg price forecasts are raised on current prices and expectations of continued firm demand. The 2022 annual hog price forecast is unchanged with offsetting changes in first and second-quarter prices. The 2021 milk production estimate and the forecast for 2022 are unchanged from the previous month. On a fat basis, the 2021 import estimate and the 2022 forecast are raised from last month on recent trade data and higher imports of cheese and butterfat products while exports for 2021 and 2022 are reduced. On a skim-solids basis, the 2021 import estimate is raised on recent trade data and higher imports of cheese and milk proteins. The 2022 skim-solids basis import forecast is also raised. The 2021 skim-solids basis export estimate is raised on recent trade data while the 2022 forecast is lowered on slower expected global demand for skim milk powder. Dairy product prices for 2021 are adjusted to include December data. The all milk price is raised on November data and a higher expected December price. For 2022, cheese, butter, nonfat dry milk, and whey price forecasts are raised from last month on firm domestic demand and tight supplies. Class III and Class IV prices for 2022 are raised from the previous month on higher dairy product prices. The 2022 all milk price forecast is raised to $22.60 per cwt.

COTTON: U.S. 2021/22 cotton ending stocks are projected lower this month with lower production and a slight increase in domestic consumption more than offsetting lower exports. Production is 660,000 bales lower at 17.6 million bales—largely due to revised Texas yields—and U.S. mill use is 50,000 bales higher, at 2.55 million bales, based on faster than expected gains through November. Exports are reduced with a lower U.S. crop, continuing logistical issues in the United States and elsewhere, and a decline in projected world trade. Exports are reduced 500,000 bales to 15.0 million, and 2021/22 ending stocks are 200,000 bales lower relative to last month, at 3.2 million bales or 18 percent of use. The projected upland season-average price received by U.S. farmers is unchanged this month, at 90 cents per pound. Changes in the global 2021/22 balance sheet are relatively small this month, led by a 608,000-bale reduction in world production. Projected world production is reduced as lower U.S. production and a 500,000-bale decline in India’s crop more than offsets increases for China, Australia, and Pakistan. The 2021/22 world cotton trade forecast is 385,000 bales lower this month. A 500,000-bale decline in China’s expected imports more than offsets a 200,000-bale increase for Pakistan, and smaller changes elsewhere. Exports are projected lower for the United States and Burkina Faso, but higher for Australia and smaller Franc Zone exporters. The 2021/22 global consumption forecast is virtually unchanged as a 500,000-bale decline in China’s cotton use is offset by gains for India, Mexico, and Pakistan. Global ending stocks for 2021/22 are down 726,000 bales this month, at 85.0 million bales, 3.4 million bales lower than in 2020/21.


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