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World Agricultural Supply and Demand Estimates - July 2009

by 5m Editor
14 July 2009, at 12:00am

Total US meat production for 2009 is reduced as lower beef output more than offsets higher pork and poultry production, according to the World Agricultural Outlook Board World Agricultural Supply and Demand Report for July.

LIVESTOCK, POULTRY, AND DAIRY: The beef production forecast is reduced for 2009 due to lower expected feedlot placements and slightly lighter average carcass weights. The Cattle report, to be released on July 24, will provide an indication of breeding herd retention and the number of cattle outside feedlots. The pork production forecast is raised due to larger-than-expected second quarter slaughter and heavier carcass weights. However, lower June 1 inventories result in a small reduction in the second-half 2009 pork production forecast. The broiler production forecast is raised as second- and third-quarter output is expected to be slightly higher.

Meat production for 2010 is raised as higher pork and broiler production outweigh slightly lower beef production. The recent Quarterly Hogs and Pigs report indicated a slower-than-expected decline in farrowing intentions which, coupled with continued gains in pigs per litter, results in larger supplies of slaughter hogs in 2010. In addition, lower forecast feed prices compared with last month supports heavier hog carcass weights. Broiler production forecasts for 2010 are also raised as lower feed prices are expected to aid producer returns. Turkey and egg production forecasts are unchanged from last month.

Turkey export forecasts for 2009 and 2010 are reduced largely because of expected lower shipments to Mexico. Export forecasts of other meats are unchanged. The beef import forecast is raised fractionally for 2009 on stronger second-quarter shipments to date. Other import forecasts for 2009 and 2010 are unchanged from last month.

Price forecasts for 2009 are lowered for hogs, generally reflecting a higher production forecast. Cattle and broiler forecasts are unchanged. Egg prices in 2009 are forecast lower on softer demand. For 2010, higher forecast pork production is expected to weigh on supplies and price forecasts are reduced. Prices for cattle and broilers are unchanged. Egg price forecasts are reduced as the current market weakness is expected to carry into 2010.

The milk production forecast is raised fractionally for 2009 as the reduction in cow numbers is slightly slower than expected. Milk production for 2010 is unchanged. Imports for 2009 on a skim-solids basis are forecast lower; the commercial export forecast is unchanged from last month. Net removals are adjusted for both higher nonfat dry milk (NDM) sales to the CCC and product exports under the Dairy Export Incentive Program (DEIP). Cheese, butter, and NDM price forecasts are lowered as supplies are large but whey prices are forecast higher. For 2009 and 2010, Class III prices are reduced as lower cheese price forecasts more than offset higher whey prices. The Class IV price forecast is reduced in line with lower butter and NDM prices in both 2009 and 2010. The all milk price is forecast at $11.85 to $12.15 per cwt for 2009 and $14.85 to $15.85 for 2010.

WHEAT: US wheat supplies for 2009/10 are raised this month as higher area and yields add 96 million bushels to forecast production. Feed and residual use is raised 10 million bushels with the larger crop and lower expected prices. Exports are projected 25 million bushels higher with smaller crops in major exporting countries expected to reduce supply competition, particularly for higher quality wheat. The ending stocks projection is raised 59 million bushels as the higher production forecast more than offsets expected increases in use. The first 2009/10 by-class wheat supply and demand projections indicate larger supplies of hard red spring, white, and durum wheat. Despite higher carryin, lower production reduces supplies of hard red winter and soft red winter wheat from year-ago levels. The 2009/10 marketing-year average farm price is projected at $4.80 to $5.80 per bushel, down 10 cents on both ends of the range.

This month’s 2008/09 changes reflect the latest export data and June 1 stocks. Exports are increased 5 million bushels and ending stocks are reduced 2 million bushels. As a result, feed and residual use is lowered 3 million bushels, but remains the highest since 2000/01. The 2008/09 marketing-year average farm price is estimated at a record $6.78 per bushel, down slightly from last month’s projection.

Global wheat supplies for 2009/10 are projected lower this month as a 1.0-million-ton beginning stocks reduction more than offsets a 0.4-million-ton production increase. The decline in world beginning stocks mostly reflects higher 2008/09 exports for EU-27, Canada, and Russia. World exports for 2008/09 are raised 4.1 million tons to 136.4 million, 18.8 million higher than the previous record in 2007/08.

World wheat production for 2009/10 is raised as higher output by the United States and FSU-12 countries more than offset reductions for Argentina, Canada, and EU-27. Production is raised 1.0 million tons for Russia and 0.5 million tons each for Ukraine and Kazakhstan, all on higher indicated area. Production for Argentina is lowered 1.5 million tons reflecting continued dryness in central growing areas and reduced prospects for seeded area. Recent rains in the southeastern growing areas are expected to boost plantings there partly offsetting area losses farther north. Production for Canada is also reduced 1.5 million tons as extended dry cool conditions in western growing areas delayed germination and crop establishment, reducing both area and yield prospects. EU-27 production is lowered 1.3 million tons as poor crop conditions across southern and southeastern Europe reduce yield prospects for Italy and Romania. Yield prospects are also lowered for the United Kingdom and harvested area is lowered for Denmark.

Global wheat imports, exports, and consumption for 2009/10 are all projected slightly higher this month. World imports are raised 0.8 million tons mostly reflecting increases for Syria, Turkey, and Yemen. World exports are raised 0.8 million tons with reductions for Argentina and Canada more than offset by increases for Ukraine, the United States, Kazakhstan, and Russia. Global consumption is raised 0.8 million tons with higher projected food use in a number of Middle Eastern and African countries more than offsetting lower expected feed use in Canada and Ukraine. Global ending stocks are projected 1.4 million tons lower mostly reflecting the reduction in 2008/09 carryout.

COARSE GRAINS: U.S. feed grain supplies for 2009/10 are projected higher this month with higher expected beginning stocks and production for corn. Corn production for 2009/10 is projected at 12.3 billion bushels, up 355 million from last month as higher estimated area from the June 30 Acreage report boosts production prospects. Corn supplies are projected at 14.1 million bushels, up 335 million bushels from 2008/09. Feed and residual use for 2009/10 is raised 50 million bushels as increased supplies and lower prices are expected to boost feeding demand. Food, seed, and industrial use is lowered 35 million bushels reflecting lower expected use for sweeteners and starch. Exports are raised 50 million bushels as lower prices increase the competitiveness of U.S. supplies in the world market. Ending stocks are projected at 1.6 million bushels, up 460 million from last month, but down 220 million from 2008/09. The 2009/10 marketing-year average farm price for corn is projected at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range.

Ending stocks for 2008/09 are raised 170 million bushels as lower domestic use more than offsets an increase in expected exports. Food, seed, and industrial use is lowered 120 million bushels with reductions projected for use in ethanol, sweeteners, and starch. The decline in corn prices has boosted ethanol producer margins; however, reduced production of gasoline blends with ethanol in May and June, based on the most recent weekly data, indicate lower-than-expected ethanol corn use. Feed and residual use is lowered 100 million bushels as indicated by the 1 June stocks. Exports are raised 50 million bushels based on recent increases in shipments and the high level of outstanding sales for the 2008/09 marketing year. The marketing-year average price is projected at $3.95 to $4.15 per bushel, down 15 cents on both ends of the range reflecting sharply lower summer price prospects.

Global coarse grain supplies for 2009/10 are projected 13.0 million tons higher this month mostly reflecting higher corn beginning stocks and production in the United States. Global coarse grain beginning stocks are raised 4.2 million tons with a 5.3-million-ton increase for corn only partly offset by lower beginning stocks for barley, sorghum, and oats. Global coarse grain production is projected 8.9 million tons higher with the increase in US corn production only partly offset by lower corn production in Russia; lower barley production in Canada, EU-27, and the United States; and lower oat production in EU-27. Higher mixed grain and rye production for the EU-27 and barley production for Russia and Ukraine also add to world coarse grain supplies.

World coarse grain imports and exports are both projected slightly higher for 2009/10. Increased US and Ukraine corn exports are mostly offset by reductions for Russia and Brazil. Global corn feeding is raised 0.8 million tons with higher feeding in the United States partly offset by a reduction for Ukraine. Global corn ending stocks are projected at 139.2 million tons, up 13.7 million from last month.

OILSEEDS: U.S. oilseed ending stocks for 2009/10 are projected at 8 million tons, up 1.1 million from last month. Higher soybean stocks account for most of the increase. Oilseed production is projected at 96.3 million tons, up 1.8 million tons, with increased soybean production accounting for most of the change. Soybean production is projected at 3.26 billion bushels, up 65 million due to increased harvested area. Harvested area estimated in the 30 June Acreage report is 1.5 million acres above the June projection. The soybean yield is projected at 42.6 bushels per acre, unchanged from last month. Increased exports and crush partly offset increased supplies, leaving projected 2009/10 ending stocks at 250 million bushels, up 40 million from last month.

Prices for soybeans and soybean products are all reduced this month. The US season-average soybean price for 2009/10 is projected at $8.30 to $10.30 per bushel, down 70 cents on both ends of the range. Soybean meal prices are projected at $255 to $315 per short ton, down 20 dollars on both ends. Soybean oil prices are projected at 31 to 35 cents per pound, down 2 cents on both ends of the range.

Global oilseed production for 2009/10 is increased 2 million tons to a record 423.4 million tons. Foreign production is projected up 0.2 million tons to 327.1 million tons. Soybean production is projected at a record 243.7 million tons, up 2.1 million due mostly to higher production in the United States. Production is also raised for Canada based on higher harvested area reported by Statistics Canada. Increased sunflowerseed production for Ukraine and the United States is partly offset by a reduction for EU-27. Rapeseed production is increased for Canada as higher harvested area is only partly offset by reduced yields. Other changes include reduced rapeseed production for Ukraine and EU-27.

U.S. soybean exports for 2008/09 are projected at 1.26 billion bushels, up 10 million from last month reflecting continued strong shipments and sales. In addition, higher projections for soybean meal exports and domestic soybean meal use result in a 5-million bushel increase in soybean crush to 1.655 billion bushels. Despite the increase, domestic soybean meal use for 2008/09 is projected down 8 percent from 2007/08 due to reduced meat production and increased supplies of alternative protein sources. Increased soybean exports and crush are offset mainly by reduced residual use, leaving ending stocks for 2008/09 unchanged at 110 million bushels.

Further Reading

- You can view the full report by clicking here.

July 2009