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World Agricultural Supply And Demand Estimates

12 January 2010

According to the latest World Agricultural Supply and Demand Estimates from the USDA's World Agricultural Outlook Board (WOAB), cattle weights are expected to be lower, reducing beef production, whilst milk production is set to increase.

LIVESTOCK, POULTRY, AND DAIRY: Total US meat production for 2009 is forecast slightly lower as reduced fourth-quarter pork and turkey production more than offset higher beef production. Broiler meat and egg production forecasts are unchanged from last month.

Forecast meat production for 2010 is raised from last month as pork production is raised. USDA’s Quarterly Hogs and Pigs report indicated that producers are reducing sows farrowing at a slower rate than expected and continued gains in pigs per litter support higher than previously forecast pig crops. In addition, hog imports are increased for 2010. Beef production is reduced slightly from last month as cattle weights in the first quarter are expected to be lower. USDA will release the Cattle report on January 29, providing indications of cattle supplies and breeding herd decisions.

Beef and broiler export forecasts for 2009 are raised but the pork export forecast is lowered. For 2010, beef exports are raised from last month but pork and broiler exports are reduced. Recently announced quotas and sanitary requirements for imports by Russia are expected to constrain exports of pork and broilers to that country, and broiler exports may also be limited by trade uncertainties in several other countries.

The hog price forecast is raised for 2010 as stronger-than-expected demand in late 2009 is expected to carry forward into 2010. Broiler prices are forecast higher as late 2009 strength in broiler demand should continue into 2010. Cattle prices are unchanged from last month.

The milk production forecast is raised for 2010 reflecting the relatively slow pace of cow liquidation in late 2009. Commercial dairy exports for 2009 are adjusted reflecting stronger skim-basis sales, but slightly weaker fat-basis sales. Import forecasts are reduced for 2009. Trade forecasts are unchanged for 2010. Fat and skim-solids ending stocks are forecast higher for 2009. Ending stocks for 2010 are raised on a skim-solids basis but are lowered on a fat-basis. Forecasts of butter and cheese prices are lowered as milk production forecasts are raised. However, relatively strong international demand should support prices for nonfat dry milk (NDM) and whey. The 2010 Class III price is lowered from last month as lower expected cheese prices more than offset stronger whey prices. The Class IV price forecast for 2010 is raised from last month as stronger NDM prices more than offset weaker butter prices. The all milk price is reduced to $16.20 to $17.00 for 2010.

WHEAT: US wheat ending stocks for 2009/10 are projected 76 million bushels higher this month with lower expected domestic use and exports. Feed and residual use is projected 20 million bushels lower as December 1 stocks, reported in the January Grain Stocks, indicate lower-than-expected disappearance during September-November. Seed use is lowered 6 million bushels based on the winter wheat planted area reported in Winter Wheat Seedings. Exports are projected 50 million bushels lower reflecting the slow pace of shipments and sales and strong foreign competition as relatively high prices limit opportunities for US wheat. At the projected 825 million bushels, 2009/10 exports would be the lowest since 1971/72. Export projections are lowered for hard red winter, soft red winter, and hard red spring wheat. The projected marketing-year average farm price is narrowed 5 cents on both ends of the range to $4.70 to $5.00 per bushel.

Global wheat supplies for 2009/10 are projected 2.5 million tons higher mostly reflecting an increase in reported output by Russia. Russia production is raised 2.2 million tons based on preliminary estimates by the official state statistical committee. Brazil production is raised 0.3 million tons based on recent indications by state-level statistical agencies. Argentina production for 2008/09 is raised 0.6 million tons as the latest export data indicate production above government estimates.

Global wheat exports for 2009/10 are lowered 1.5 million tons mostly reflecting the reduction in projected US shipments. Imports are raised for Afghanistan, Egypt, China, and Kenya, but lowered for EU-27 and Mexico. Food, seed, and industrial use is raised for Afghanistan and Russia, but lowered for Argentina and Mexico. Global ending stocks are projected 4.7 million tons higher mostly on larger expected stocks in the US and Russia, up 2.1 million tons and 1.7 million tons, respectively. Higher ending stocks are also projected for Egypt, Brazil, and Argentina, up 0.5 million tons, 0.3 million tons, and 0.2 million tons, respectively. EU-27 ending stocks are lowered 0.4 million tons.

COARSE GRAINS: US feed grain ending stocks for 2009/10 are raised based on higher estimated corn and sorghum production. Corn production is estimated at a record 13.2 billion bushels, up 230 million bushels with higher area and yields. Corn feed and residual is projected 150 million bushels higher based on September-November disappearance as indicated by the December 1 stocks. Partly offsetting is a 10-million-bushel reduction in food, seed, and industrial use reflecting lower-than-expected September-November shipments of high fructose corn syrup. Corn ending stocks are projected at 1,764 million bushels, up 89 million bushels and the largest since 2005/06. However, because of higher usage, stocks as a percentage of use are down year-to-year at 13.5 per cent compared with 13.9 per cent for 2008/09.

Sorghum ending stocks for 2009/10 are projected 9 million bushels higher this month with higher estimated production more than offsetting an increase in projected feed and residual use. Production is raised 19 million bushels with higher estimated yields. Projected sorghum feed and residual use is raised 10 million bushels on higher-than expected September-November disappearance as indicated by the December 1 stocks. Barley imports and exports are both lowered 5 million bushels based on the pace of trade to date, leaving projected ending stocks unchanged. Oats feed and residual use is raised 5 million bushels based on indicated September-November disappearance, leaving ending stocks down 5 million bushels.

The 2009/10 marketing-year average corn farm price is projected at $3.40 to $4.00 per bushel, up 15 cents on both ends of the range based on reported prices to date and continued strength in futures and cash market values. The projected farm price for sorghum is raised to $3.05 to $3.55 per bushel as compared with $2.85 to $3.45 per bushel last month. The barley farm price is raised 10 cents on the lower end of the projected range to $4.20 to $4.60 per bushel. The oats farm price, however, is projected 10 cents lower on the upper end of the range to $2.00 to $2.20 per bushel based on prices received to date.

Global coarse grain production for 2009/10 is projected 4.7 million tons higher this month with higher corn, barley, and mixed grain output more than offsetting lower output for sorghum, millet, and oats. World corn production is raised 6.3 million tons mostly reflecting the record US crop. Argentina corn production is also raised 1.0 million tons as widespread rainfall encouraged producers to extend the planting season and abundant soil moisture raises prospects for yields. Corn production is lowered 0.5 million tons for Mexico with harvested area reduced on reports that drought during July damaged crops in the southern plateau more extensively than previously thought. Barley production is raised 0.5 million tons for Kazakhstan based on revisions to government estimates. Mixed grain production for EU-27 is raised 0.3 million tons with higher reported output in Poland. India sorghum production is lowered 2.0 million tons on lower reported area and yields. India millet production is reduced 0.4 million tons as lower yields more than offset higher reported area.

Global coarse grain trade for 2009/10 is raised this month mostly reflecting higher corn exports. Serbia corn exports are raised 0.5 million tons with larger available supplies. Russia corn exports are raised 0.1 million tons based on the pace of shipments to date. Global corn imports are raised mostly reflecting a 0.5-million-ton increase projected for Mexico with lower reported production. Global corn ending stocks are projected 3.9 million tons higher with more than half of the increase from rising US stocks. Corn ending stocks are also raised for Brazil, Argentina, EU-27, Mexico, and India.

RICE: The US 2009/10 rice crop is estimated at 219.85 million cwt, up 1.6 million or 1 per cent from the previous estimate as both harvested area and average yield are raised. Average yield is estimated at 7,085 pounds per acre, up 47 pounds per acre from last month, and 239 pounds per acre above the previous year. Harvested area is estimated at 3.1 million acres, up 2,000 acres from the previous estimate. Combined medium- and short-grain production is increased 1.4 million cwt to a record 67.1 million and long-grain production is adjusted up 0.2 million to 152.7 million. Although total rice imports for 2009/10 are unchanged at 21.0 million cwt, long-grain imports are raised 0.5 million which is offset by an equal reduction for combined medium- and short-grain imports.

The National Agricultural Statistics Service’s (NASS) Rice Stocks reported total rough rice stocks at 156.6 million cwt as of December 1 and total milled stocks at 5.7 million (8.1 million cwt on a rough-equivalent basis). Total rice stocks on a rough-equivalent basis are 164.7 million, up 13 per cent from a year earlier. Long-grain stocks as of December 1 are estimated at 106.3 million (rough-equivalent basis) and combined medium- and short-grain stocks at 55.4 million.

Domestic and residual use for 2009/10 is unchanged at a record 129.5 million cwt. Total rice exports are raised 2 million cwt to 99 million, with long-grain and combined medium- and short- grain each raised 1 million. Milled rice exports are raised 2 million cwt (rough-equivalent basis) to 64 million, while rough rice exports are unchanged at 35.0 million cwt. Total rice ending stocks are projected at 42.8 million cwt, down 0.4 million from last month, with long-grain stocks down 0.3 million and combined medium- and short-grain stocks down 0.1 million.

The 2009/10 long-grain season-average farm price range is projected at $12.50 to $13.50 per cwt, down 10 cents per cwt on each end of the range, while the combined medium- and short-grain farm price range is projected at $17.00 to $18.00 per cwt, down 75 cents per cwt on each end of the range. The all rice season-average farm price is forecast at $13.65 to $14.65 per cwt, down 25 cents per cwt on both ends of the range. The price projections are based on NASS reported prices through mid-December and expected prices for the remainder of the marketing year.

Global 2009/10 rice production, consumption, trade and ending stocks are raised slightly from a month ago. The increase in global rice production is due primarily to a larger crop in India, which is up 1.5 million tons to 84.5 million. The government of India raised the Kharif crop (summer harvest) to 71.65 million tons, up 3 per cent from an earlier estimate. The Kharif crop typically accounts for about 85 per cent of total rice production in India. Additionally, Pakistan’s crop is raised from a month ago, while production estimates are lowered for Brazil, Indonesia, Uzbekistan, and Panama. Excessive rains in southern Brazil during planting have lowered planted area and expected yields. Additionally, dryness in central and eastern regions of Java, Indonesia, has lowered production prospects. Global exports for 2009/10 are raised 0.4 million tons largely on expected increase for Pakistan. Exports are also raised for the US, but lowered for Brazil. World ending stocks are projected at 90.7 million tons, up 1.2 million from last month, but down 1.75 million from 2008/09.

OILSEEDS: US oilseed production for 2009/10 is estimated at 99.0 million tons, up 1.1 million from last month. Increases for soybeans, sunflowerseed, and peanuts are only partly offset by reductions for cottonseed and canola. Soybean production is estimated at a record 3.361 billion bushels, up 42 million bushels from last month based on higher yields. The soybean yield is estimated at a record 44.0 bushels per acre. Soybean exports are raised 35 million bushels to a record 1.375 billion led by strong sales and shipments to China and several other markets including Taiwan, Thailand, Egypt, and Canada. US export sales have benefitted from tight competitor supplies resulting from last year=s drought-reduced South American crop. The projected soybean crush is raised 15 million bushels to 1.710 billion reflecting increased soybean meal exports. Soybean ending stocks are projected at 245 million bushels, down 10 million from last month. Despite increased crush, soybean oil production is reduced due to a lower extraction rate. With use unchanged, soybean oil stocks are projected at 2.152 billion pounds, down 155 million from last month.

The US season-average soybean price range for 2009/10 is projected at $8.90 to $10.40 per bushel, up 15 cents on both ends of the range. Soybean oil prices are forecast at 36 to 39 cents per pound, up 0.5 cents on both ends of the range. Soybean meal prices are projected at $265 to $315 per short ton, up 5 dollars on both ends of the range.

Global oilseed production for 2009/10 is projected at 431.6 million tons, up 3.0 million from last month. Increased soybean, peanut, and cottonseed production are only partly offset by reduced sunflowerseed and rapeseed production. Global soybean production is projected at a record 253.4 million tons, up 3.1 million. Adding to increased US soybean production, Brazil=s soybean crop is projected at a record 65 million tons, up 2 million. The increase is mainly due to higher area reflecting favorable planting conditions and recent survey data from the Brazilian government. Global sunflowerseed production is reduced this month due to lower production estimates for Argentina and EU-27. Argentina sunflower harvested area is reduced due to excessively dry conditions during the planting season. Other changes include increased cottonseed production for China, lower cottonseed production for Australia, and increased peanut production for Senegal.

Global oilseed trade for 2009/10 is raised 1 million tons this month primarily due to higher imports for China. Global oilseed ending stocks for 2009/10 are increased 2.2 million tons to 71.1 million with soybean stocks for Brazil and China accounting for most of the change.

SUGAR: Projected 2009/10 sugar supply is increased 74,000 short tons, raw value, from last month due to higher cane sugar production and lower imports. Higher cane sugar production in Louisiana more than offsets lower output in Florida and Texas. The Florida and Texas estimates are based on reduced area harvested, as reported by processors to the Farm Service Agency. Louisiana sugar production is based on factory-level information through the end of December and projected output for the remaining 2 weeks of the harvest in January. Imports and exports under the US re-export program are reduced 50,000 tons each based on the slow pace to date. Sugar use is unchanged. Ending stocks are increased 124,000 tons to 1.14 million.

For Mexico, projected 2009/10 supply is reduced 242,000 metric tons, raw value, from last month. Production is lowered 100,000 tons based on weather-reduced sugar yields to date. Imports of 55,000 tons under Mexico=s import quota, which did not arrive in 2008/09, are expected to arrive in 2009/10. This shift is nearly offset by reduced imports from U.S. refiners under the re-export program. For 2008/09, reduced ending stocks result from lower imports and higher exports based on final data from Mexico.

COTTON: The 2009/10 US cotton estimates include slight decreases in production and ending stocks compared with last month. Production is lowered by 191,000 bales, as reductions in the Southeast, Delta, and Southwest states are partially offset by increases in the far West. Domestic mill use and exports are unchanged. The ending stocks forecast is reduced to 4.3 million bales, or 30 per cent of total use. The forecast range of 57 to 64 cents per pound for the average price received by producers is raised 1 cent on the lower end.

The world 2009/10 cotton estimates are virtually unchanged from last month. Increases in production for China and Brazil are offset by decreases for India, the US, Australia, and others. World consumption is lowered marginally due to reductions for Japan and Russia. Minor adjustments are made to world trade. The world ending stocks forecast of 51.7 million bales reflects a 15-per cent decrease from the beginning level. World stocks outside of China of 34.2 million bales are forecast at their lowest since 2003/04.

Further Reading

- You can view the full report by clicking here.
January 2010

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