USDA Agricultural Forecast

 

ISSN: 1554-9089 WASDE - 475 October 9, 2009 WHEAT: U.S. wheat ending stocks for 2009/10 are projected 121 million bushels higher this month as increased production and lower expected use more than offset a 10-million-bushel reduction in carryin. Production is raised 36 million bushels based on the Small Grains 2009 Summary report. Feed and residual use is lowered 45 million bushels on lower-than- expected disappearance during the June-August quarter as indicated by the September 1 stocks. Exports are projected 50 million bushels lower as larger supplies in major export competitors reduce prospects for U.S. wheat shipments. If realized, 2009/10 ending stocks would be a 9-year high at 864 million bushels. The 2009/10 marketing-year average farm price is projected lower at $4.55 to $5.15 per bushel compared with $4.70 to $5.50 per bushel last month.

Global wheat supplies for 2009/10 are projected 2.2 million tons higher as a 4.4-million-ton increase in world production more than offsets a 2.2-million-ton reduction in beginning stocks. Foreign production is raised 3.4 million tons with increases in several major exporting countries. Production is raised 2.0 million tons for Canada as favorably dry, warm September weather extended the Prairie growing season by as much as 3 weeks boosting yields for this year’s delayed crop. Russia production is increased 1.0 million tons based on higher reported spring wheat yields, particularly in Siberia. Production is raised 0.6 million tons for EU-27 with increases reported for Poland and Hungary. Production is increased 0.5 million tons each for Algeria, Australia, and Kazakhstan. September rains were favorable for flowering and heading wheat in Australia’s western and southern growing areas where higher yields are expected to more than offset losses from sustained dryness and heat in eastern growing areas. Lower expected production in Brazil and Chile partly offsets rising output elsewhere. Brazil production is lowered 1.0 million tons as continued heavy, late-season rains reduce prospects for yields and quality. Chile production is lowered 0.5 million tons on lower reported area. A number of small, mostly offsetting, production changes are made in Sub-Saharan African countries. Global wheat trade for 2009/10 is projected higher with much of the increase reflecting higher projected imports by Brazil and exports by Canada. Brazil imports are raised 1.0 million tons. Smaller import increases are also made for Bangladesh, Chile, Saudi Arabia, and Ethiopia. Partly offsetting is a 0.4-million-ton reduction in imports for Algeria. Exports are raised 1.5 million tons for Canada. Exports also are raised 0.5 million tons each for Kazakhstan and Ukraine, and 0.4 million tons for Mexico. These increases more than offset the 1.4-million-ton reduction for the United States. Global consumption is raised 2.1 million tons with higher expected wheat feeding in China, EU-27, Brazil, and Russia; and higher food, seed, and industrial use in Canada, Algeria, and Iran more than offsetting lower feed and residual use in the United States and Ukraine. Global ending stocks are nearly unchanged at 186.7 million tons, up just 0.1 million from last month.

COARSE GRAINS: U.S. feed grain supplies for 2009/10 are projected higher this month as increased corn and barley production and higher sorghum beginning stocks more than offset lower corn carryin and reduced sorghum production. September 1 corn stocks, as reported in the September 30 Grain Stocks report, reduced 2009/10 corn beginning stocks as higher corn use for ethanol, sweeteners, starch, and exports boosted June-August use. Corn production for 2009/10 is forecast 63 million bushels higher with a 2.3-bushel-per-acre yield increase more than offsetting a 700,000 acre reduction in harvested area.

Total corn supplies are projected 42 million bushels higher. Total U.S. corn use for 2009/10 is increased 5 million bushels. Feed and residual use is projected 50 million bushels higher reflecting the higher forecast yield and crop. Food, seed, and industrial use is also projected higher, up 5 million bushels, on higher expected use for sweeteners with tight sugar supplies. Offsetting most of the increase in domestic use is a 50-million- bushel reduction in projected exports. Increased supplies of feed grains in Canada and larger world wheat supplies are expected to increase competition for U.S. corn exports.

Corn ending stocks for 2009/10 are projected 37 million bushels higher and just below the revised estimate for the 2008/09 marketing year. The 2009/10 marketing-year average farm price projection is unchanged at $3.05 to $3.65 per bushel. Sorghum supplies for 2009/10 are projected 12 million bushels lower as reduced production more than offsets higher beginning stocks. Production is forecast 26 million bushels lower with reduced area and yields.

Beginning stocks are estimated 15 million bushels higher based on the September 1 stocks. Barley supplies for 2009/10 are raised 21 million bushels based on higher estimated production from the Small Grains 2009 Summary report. With a 10-million-bushel reduction in feed and residual as indicated by the September 1 stocks, ending stocks are projected at a 5-year high, up 31 million bushels from last month. Projected 2009/10 farm prices for sorghum, barley, and oats are all unchanged this month; however, the barley and oats ranges are narrowed. Global coarse grain supplies for 2009/10 are increased 4.7 million tons, mostly reflecting higher corn beginning stocks and increased barley output.

Global corn beginning stocks are raised 2.2 million tons with upward revisions to 2008/09 production for Brazil and South Africa, and higher reported stocks for Canada. Barley production is raised 4.4 million tons with higher output in Russia, Algeria, EU-27, the United States, Canada, and Australia. Global corn production for 2009/10 is lowered 1.5 million tons with reductions for China, Russia, and a number of smaller countries only partly offset by increases for the United States, EU-27, Ukraine, Canada, and several Sub- Saharan African countries.

China corn production is lowered 5.0 million tons on confirmation that unusual heat and dryness during late July and early August severely hampered corn pollination in the western growing areas of the northeast. Increased harvested area for China partly offsets this month’s yield reduction. World coarse grain imports and exports are both projected lower for 2009/10 mostly reflecting reduced prospects for U.S. corn exports, down 1.3 million tons, and lower expected corn imports by Canada, down 1.5 million tons. Other mostly offsetting corn trade changes include lower imports for Chile and higher imports for Colombia. Reduced barley exports for EU-27 are partly offset by an increase for Russia. Global coarse grain feeding is raised 3.5 million tons as higher corn feed and residual use for the United States, China, Brazil, EU- 27, Mexico, Ukraine, and Colombia are only partly offset by reductions for Canada and Chile.

Barley feeding is raised for Russia, Algeria, Ukraine, Australia, and Canada. Global coarse grain ending stocks are nearly unchanged from last month as a 2.9-million-ton reduction in corn stocks is more than offset by a 3.3-million-ton increase in barley stocks. Global barley ending stocks are projected at a 5-year high.

RICE: U.S. rice production in 2009/10 is forecast at 220.6 million cwt, 1 percent above last month due entirely to an increase in yield. Average yield is estimated at 7,115 pounds per acre, up 64 pounds from last month. Harvested area is unchanged at 3.10 million acres. Long-grain production is forecast at 154.2 million cwt, 1 percent above last month, while combined medium- and short-grain production is forecast at 66.4 million cwt, also up 1 percent. The total rice export projection at 96 million cwt is unchanged from a month ago; however, exports of long-grain are raised 1.0 million, and combined medium- and short-grain exports are lowered by 1.0 million. Total rice ending stocks are projected at 46.6 million cwt, 5 percent above last month. The all rice season-average farm price is forecast at $13.00 to $14.00 per cwt, down 65 cents per cwt on both ends of the range. The long-grain season-average farm price range is projected at $11.75 to $12.75 per cwt, down $1.15 per cwt on each end of the range. The combined medium- and short-grain farm price range is projected at $17.50 to $18.50 per cwt, up $1.25 per cwt on each end. Large exportable supplies of long- grain rice among the major Asian exporters, particularly Thailand, Vietnam, and Pakistan, will pressure prices, while tighter global supplies of medium-grain rice will help to support prices. Projected global 2009/10 rice production is nearly unchanged from a month ago; however, there are a number of offsetting changes. Production projections are lowered for Bangladesh, Colombia, the Philippines; but raised for the United States, China, and a number of Sub-Saharan African countries. The 2009/10 Bangladesh rice crop is projected at 30.0 million tons, down 1.0 million from last month. China’s rice crop is raised 900 thousand tons to 136.0 million, the largest crop since 1999/00. Global exports are projected at 29.8 million tons, up nearly 0.5 million largely due to an increase for Vietnam. Global consumption is up slightly from a month ago with levels raised for China and a number of countries in Sub-Saharan Africa; and lowered for Bangladesh, and Indonesia. Global ending stocks for 2009/10 are projected at 85.9 million tons, up 1.0 million from last month, but down 4.8 million from 2008/09.

OILSEEDS: U.S. oilseed ending stocks for 2009/10 are projected at 7.7 million tons, up 0.4 million from last month as larger supplies are only partly offset by increased exports. Total U.S. oilseed production is projected at 96.1 million tons, up 0.3 million from last month as higher soybean, sunflowerseed, and canola production more than offset lower peanut and cottonseed production. Soybean production is forecast at a record 3.250 billion bushels, up 5 million from last month based on higher yields. The soybean yield is projected at 42.4 bushels per acre, up 0.1 bushels from the previous estimate. Total soybean supplies are forecast up 32 million bushels due to increased crop production and beginning stocks. Soybean exports are raised 25 million bushels to 1.305 billion due to increased supplies, lower prices, and increased global import demand, mainly for China. Soybean ending stocks are projected at 230 million bushels, up 10 million from last month. Prices for soybeans and soybean meal are projected lower for 2009/10. The U.S. season-average soybean price range is projected at $8.00 to $10.00 per bushel, down 10 cents on both ends of the range. The soybean meal price is projected at $245 to $305 per short ton, down 5 dollars on both ends of the range. The soybean oil price range is projected at 32 to 36 cents per pound, unchanged from last month. Global oilseed production for 2009/10 is projected at 425.4 million tons, up 2.6 million from last month. Increased soybean and rapeseed production are only partly offset by lower peanut and cottonseed production. Global soybean production is projected higher with increases for the United States, Argentina, and Paraguay only partly offset by lower production for China. Argentina soybean production is raised 1.5 million tons to 52.5 million due to increased area as producers shift to soybeans from other crops including corn and sunflowerseed. China soybean production is lowered 0.5 million tons to 14.5 million due to lower harvested area as producers shifted more area to corn. Global rapeseed production is projected higher mainly on increases for Canada and EU-27. Production in Canada is projected at 10.5 million tons, up 0.5 million based on the most recent survey from Statistics Canada. EU-27 rapeseed production is projected at a record 20.6 million tons, up 0.6 million. Global peanut and cottonseed production are reduced mainly due to lower estimates for both crops for China. Other changes include lower sunflowerseed production for Argentina, higher sunflowerseed production for EU-27, and higher cottonseed production for India. Global oilseed stocks for 2009/10 are raised 4.5 million tons to 66.0 million. Soybeans account for most of the change, with increases projected for the United States, Brazil, Argentina, and China. Rapeseed stocks for Canada and EU-27 are also increased. China soybean imports are raised for 2008/09 and 2009/10 to 40.7 million and 39.5 million tons, respectively.

SUGAR: Projected 2009/10 U.S. sugar supply is decreased 8,000 short tons, raw value, from last month. Imports of specialty sugar, announced in September along with the 2009/10 tariff rate quota, nearly offset lower beginning stocks. Projected Louisiana sugar production is unchanged. Despite an increase in forecast total sugarcane production in Louisiana, assumed higher use of sugarcane for seed and lower sugar recovery from sugarcane are offsetting. Estimated 2008/09 U.S. sugar supply is reduced 97,000 tons from last month, based on preliminary full-year data. Sugar production is lowered 63,000 tons, mainly due to lower beet sugar production. Imports are decreased 34,000 tons as lower imports under the tariff rate quota more than offset higher other imports. On the use side, deliveries for non-food uses are lowered 14,000 tons based on the pace through August. Projected 2009/10 Mexico sugar supply is decreased 120,000 metric tons, raw value, from last month. Production is lowered 100,000 tons in line with producer projections in Mexico. Beginning stocks are lowered 20,000 tons, as Mexico=s exports in 2008/09 were higher than expected.

LIVESTOCK, POULTRY, AND DAIRY: Total U.S. meat production for 2009 is raised as higher pork production more than offsets lower beef and turkey production. Pork production is raised mainly due to higher third-quarter slaughter and significantly higher weights due to favorable summer weather. The beef production forecast is reduced on lower expected cow slaughter. The turkey production forecast is reduced on slightly lower third-quarter output. Broiler production is unchanged. Meat production forecasts for 2010 are lowered from last month as higher beef production due to larger feedlot placements in 2009 is more than offset by lower pork and turkey production. The Quarterly Hogs and Pigs report, released on September 25, indicated producers plan to farrow fewer sows during the remainder of 2009 and into 2010, which, coupled with fewer imports of hogs from Canada results in a lower production forecast. Turkey hatchery data indicates a slower expansion in production during 2010. The broiler production forecast is unchanged from last month. Red meat and poultry export forecasts for 2009 and 2010 are mostly unchanged from last month. Turkey exports are raised for 2009. Import forecasts for beef for both 2009 and 2010 are reduced reflecting lower expected beef supplies in Oceania. Pork import forecasts are raised slightly for 2009. Price forecasts for cattle, hogs, broilers, and turkeys are lowered for fourth-quarter 2009. Weak demand and large supplies of meat continue to pressure prices. Prices are expected to remain under pressure into next year and 2010 forecasts are reduced from last month. The egg price forecast is unchanged for fourth-quarter 2009 and throughout 2010. The milk production forecast is raised for 2009 and 2010 as milk per cow is forecast higher and the rate of decline in cow inventories is lowered in 2010. Import forecasts are raised as butterfat and cheese imports are stronger than expected. Stronger world dairy prices and a weak U.S. dollar are expected to increase export demand for U.S. dairy products. The commercial fat basis export forecast is raised for 2010, and on a skim-solids basis, commercial exports are raised for both 2009 and 2010. Net removals reflect adjustments in CCC and Dairy Export Incentive Program (DEIP) activities for nonfat dry milk (NDM), butter, and cheese. Firmer domestic and export demands are expected to support prices for cheese, whey, and NDM. However, butter prices are forecast lower as supplies remain large. Class III prices for 2009 and 2010 are raised from last month and Class IV prices are raised for 2009. The all milk price is forecast at $12.35 to $12.45 per cwt for 2009 and $14.70 to $15.60 for 2010.

COTTON: The 2009/10 U.S. cotton forecasts include lower production and offtake compared with last month. Beginning stocks are raised marginally to reflect the U.S. Census Bureau’s final estimate of 2008/09 ending stocks. Production is lowered 3.3 percent to 13.0 million. Texas accounts for most of the decline; production in the Mississippi Delta states is reduced 85,000 bales. Domestic mill use also is lowered, reflecting the continued sluggish pace of U.S. textile exports. Exports of cotton remain unchanged at 10.5 million bales. Ending stocks are reduced 200,000 bales to 5.4 million. The forecast for the marketing-year average price received by producers is reduced 2 cents per pound at the top of the range to 49 to 57 cents. The world 2009/10 cotton forecasts mainly include small adjustments, with the most significant changes occurring in the China balance sheet. World beginning stocks are raised 1.0 million bales, reflecting higher stocks in China resulting from an upward revision in 2008/09 production. A reduction of 1.0 million bales in China’s 2009-crop production forecast more than offsets the higher beginning stocks; adverse harvest weather is reported to have affected yield prospects in the Yangtze region. Lower production estimated for China, the United States, and Uzbekistan is partially offset by increases for India and Argentina. World consumption, trade, and ending stocks are virtually unchanged.

Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720- 6030. This report was prepared by the Interagency Commodity Estimates Committees. APPROVED BY: JOSEPH W. GLAUBER ACTING SECRETARY OF AGRICULTURE