Share via Email


* Email To: (Separate multiple addresses with a semicolon)
* Your Name:
* Email From: (Your IP Address is 34.204.169.76)
* Email Subject: (personalize your subject)


Email Content:
Chick-News.com Poultry Industry News, Comments and more by Simon M. Shane

USDA-WASDE FORECAST #591 August 12th 2019

08/12/2019

OVERVIEW

The August 12th 2019 USDA WASDE projections for the 2019 corn and soybean harvests are based on historical yield and harvest data with progressive updating as the season has advanced. The corn acreage to be harvested was determined from planting completed in June at 90.0 million acres (81.8 million in 2018) down 1.9 percent from the July WASDE. In 2019 soybeans will be harvested from 75.9 million acres, down 4.3 percent from the July estimate (88.3 million acres in 2018)

The USDA projected corn yield was raised to 169.5 bushels per acre, (178.9 bushels in 2018) despite late planting and delayed development. Soybean yield was unchanged from July at 48.5 bushels per acre (52.1 bushels in 2018). Yield values presume suitable growing conditions until harvest.

The July USDA projection of ending stock for corn was increased by 8.6 percent from the July WASDE to 2,101 million bushels. Ending stock for soybeans will be 5.0 percent lower than the July estimate at 755 million bushels. Ending stocks for both corn and soybeans have influenced recent CME price quotations. It is presumed that projections are based on the presumption that there will be no settlement of the trade dispute with China in 2019. China failed to commit to purchases following the June meeting between President Trump and Premier Xi at the G-20 Meeting in Osaka and banned all agricultural imports from the U.S. following the announcement of a 10 percent tariff, effective September 1st on imports from China valued at $300 billion in 2019 and not already subject to duty.

CORN

The corn harvest for 2019 documented in the July WASDE Report is projected to be 13,901 million bushels consistent with acreage planted, crop progress and estimated yield. The projection for 2019 can be compared to the 2018 harvest of 14,420 million bushels and is down 8.2 percent from the 2016 record harvest of 15,148 million bushels. The "Ethanol and Byproducts" category was lowered from July to 5,475 m. bushels despite the prospect of year-round use of E-15. Exports were lowered to 2,050 million bushels based on competition from Brazil and Argentine and increased World domestic coarse grain production relative to demand. The "Feed and Residual" category was retained at 5,175 million bushels. Ending stocks increased by 8.5 percent to 2,181 m. bushels. The projected USDA farm price was estimated at 360 cents per bushel down 10 cents from the July WASDE projection. At 13H00 on August 12th after release of the WASDE the CME quotations for September 2019 and December 2019 corn were 385 cents and 393 cents per bushel respectively.

August 2019 WASDE #591 ESTIMATES FOR THE 2019 CORN HARVEST:

Harvest Area

82.0 m acres

(90.0 m. acres planned, corresponding to 91.1% of are harvested)

Yield

169.5 bushels per acre

(was 175.4 bushels per acre in 2017, 178.9 bushels per acre 2018)

Beginning Stocks

2,360 m. bushels

 

Production

13,901 m. bushels

 

Imports

50 m. bushels

 

Total Supply

16.311 m. bushels

Proportion of Supply

Feed & Residual

5,175 m. bushels

31.7%

Food & Seed

1,430 m bushels

8.7%

Ethanol & Byproducts

5,475 m. bushels

33.6%

Domestic Use

12,080 m. bushels

74.0%

Exports

2,050 m. bushels

12.6%

Ending Stocks

2,181 m. bushels

13.4%

Stock-to-domestic use proportion

18.0%

(Was 16.6% in the July 2019 WASDE Report)

Average Farm Price: $3.60 per bushel. (Down 10 cents per bushel compared to the July 2019 WASDE Report)

SOYBEANS and SOYBEAN MEAL

USDA projected the 2019 soybean crop to be 3,684 million bushels, 7.3 percent lower than the July estimate, based on a yield of 48.5 bushels per acre from a 4.3 percent lower area to be harvested. Use parameters were essentially unchanged from the July 2019 WASDE Report with crushings at 2,115 m. tons. Projected exports were lowered to 1,775 million bushels, presumably without anticipating resolution of the trade conflict with China in 2019. The export projection appears speculative given that negotiations have ceased and that China has imposed a complete ban on importation of U.S. agricultural products. This nation is usually responsible for imports equivalent to 25 percent of U.S. production.

Ending stocks were adjusted down 5.0 percent to 755 million bushels from 795 million bushels. The USDA projection of the ex-farm price for soybeans for the 2019 harvest is 840 cents per bushel, unchanged from the July WASDE estimate. At 13H00 on August 12th CME quotations for soybeans for August 2019 and September 2019 delivery were 862 cents and 868 cents per bushel respectively.

Projected output of soybean meal was unchanged from the July 2019 WASDE at 49.7 million tons. Domestic use was reduced to 36.5 million tons. Exports were increased to 13.7 million tons despite an uncertain trade environment. The USDA retained the price of soybean meal at $300 per ton from the July WASDE Report. At 13H00 on August 12th CME quotations for August and September 2019 deliveries of soybean meal were both $293 and $294 respectively.

AUGUST 2019 WASDE #591 ESTIMATE FOR THE 2019 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION:

Harvest Area

75.9 m acres

(76.7 m. acres planted, corresponding to 99.0% of planted acreage)

Yield

48.5 bushels per acre

(Was 49.5 bushels per acre in 2017, 52.1 bushels/ per acre 2018)

Beginning Stocks

1,070 m. bushels

(Was 1,050 m. bushels in July WASDE)

Production

3,680 m. bushels

 

Imports

20 m. bushels

 

Total Supply

4,770 m. bushels

Proportion of Supply

Crushings

2,115 m. bushels

44.4%

Exports

1,775 m bushels

37.2%

Seed

96 m. bushels

2.0%

Residual

30 m. bushels

0.6%

Total Use

4,016 m. bushels

84.2%

Ending Stocks

755 m. bushels

15.8% (Was 795 m. bushels in July WASDE)

Average Farm Price: 840 cents per bushel (Unchanged from the July WASDE Report)

Soybean Meal

Beginning Stocks

0.450 m. tons

Production

49.650 m. tons

Imports

0.500 m. tons

Total Supply

50.600 m. tons

Domestic Use

36.500 m. tons

Exports

13.700 m. tons

Total Use

50.200 m. tons

Ending Stocks

0.400 m. tons

Average Price ex plant : $300 (Unchanged from the July WASDE Report)

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest higher production costs for broilers and eggs. Going forward, prices of commodities will be determined by World supply and demand and U.S. domestic yield, use and exports.

  • For each 10 cents per bushel change in corn:-

  • The cost of egg production would change by 0.45 cent per dozen

  • The cost of broiler production would change by 0.25 cent per live pound

  • For each $10 per ton change in the cost of soybean meal:-

  • The cost of egg production would change by 0.40 cent per dozen

  • The cost of broiler production would change by 0.25 cent per live pound.

WORLD SITUATION

Forecasts production of corn was raised for the U.S., Ukraine and Eastern European nations, offset by lower harvests in France and Poland.

The global projection for oilseeds was down 5.0 million m. tons due to lower soybean production in the U.S., Canada and Brazil. Sunflower production in the Ukraine increased offsetting declines in canola and soybeans in India.

Updated World production and use of total grains and oilseeds is summarized for the 2019/2020 season taking into account Northern and Southern Hemisphere production:-

Factor Billon m. tons

Coarse Grains

Oil Seeds

Output

1.399

581

Supply

1.754

715

World Trade

205

172

Use

1.418

502

Ending Sales

336

119

(1 metric ton corn= 40 bushels) ("ton" represents 2,000 pounds)


 
Copyright 2019 Simon M. Shane