Share via Email


* Email To: (Separate multiple addresses with a semicolon)
* Your Name:
* Email From: (Your IP Address is 54.226.25.74)
* Email Subject: (personalize your message)


Email Content:

USDA-WASDE FORECAST #584 December 11th 2018

12/11/2018

OVERVIEW

The December11th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on actual yield and harvest data. The acreage for corn was retained from the July through November WASDE projections at 81.8 million acres (83.1 million in 2017). Soybeans will be harvested from 88.3 million acres (89.5 million acres in 2017).

The USDA confirmed corn yield to be 178.9 bushels per acre, unchanged from the November WASDE (175.4 bushels in 2017). Soybean yield was held from November at 52.1 bushels per acre (49.5 bushels in 2017).

The December USDA projection of ending stock for corn was raised 2.6 percent to 1,781 million bushels for November. Ending stock for soybeans was held at 955 million bushels with minimal effect on CME quotation subsequent to the noon release of the December WASDE.

The 2018 corn and soybean crops will be the second largest ever but harvested during a time of uncertainty regarding previously projected, anticipated and ongoing export volumes. The USDA projections of ending stocks and hence prices for corn and soybeans take into account current announced tariffs on U.S. products but do not reflect future tariffs or an anticipated resolution of the trade conflict with China.

CORN

The projection of the corn harvest was retained from the November WASDE Report at 14,626 million bushels consistent with the reality that the 2018 crop is all but completely harvested. The projection for 2018 can be compared to the 2017 harvest of 14,577 million bushels and is down only 3.4 percent from the 2016 record harvest of 15,148 million bushels. The "Ethanol and Byproducts" category was reduced 100 million bushels to 5,550 m. bushels but exports were retained at 2,450 million bushels. "Feed and Residual" was unchanged at 5,550 million bushels. Ending stocks will increase 2.6 percent to 1,781 m. bushels. The projected USDA range in farm price was narrowed with retention of the midpoint to a range to 325 to 395 cents per bushel. At 13H00 on December 11th CME quotations for December 2018 and March 2019 corn were 374 cents and 384 cents per bushel respectively, both within 1 cent per bushel of the trade levels on November 8th.

DECEMBER 2018 WASDE #584 ESTIMATE FOR THE 2018 CORN HARVEST:

Harvest Area 81.8 m* acres (89.1 m. acres planted, corresponding to 91.8 % of area harvested)

Yield 178.9 bushels per acre (was 175.4 bushels per acre in 2017, 180.7 bushels Oct. WASDE)

Beginning Stocks 2,140 m. bushels

Production 14,626 m. bushels

Imports 45 m. bushels

Total supply 16,811 m bushels Proportion of Supply

Feed & residual 5,550 m. bushels 33.0%

Food & Seed 1,480 m. bushels 8.8%

Ethanol & byproducts 5,550 m. bushels 33.0 %

Domestic Use 12,580 m. bushels 74.8%

Exports 2,450 m. bushels 14.6%

Ending Stocks 1,781 m. bushels 10.6%

Stock-to- domestic use proportion 14.2% (Was 13.7% in the November 2018 WASDE Report)

Average Farm Price: $3.25 to $3.95 per bushel . (Up 5 cents per bushel on the low end and down 5 cents per bushel on the high end compared to the November 2018 WASDE)

*m.=million

SOYBEANS and SOYBEAN MEAL

USDA retained the projection of the soybean harvest from the November WASDE Report at 4,600 million bushels based on a yield of 52.1 bushels per acre. Use parameters were essentially unchanged from the November 2018 WASDE Report with crushings at 2,080 m. tons. Projected exports were held to 1,900 million bushels presumably in anticipation of a resolution of the trade conflict with China. This figure appears optimistic given that China ceased imports in July 2018 and this nation is usually responsible for an offtake equivalent to 25 percent of production. Ending stocks were held to 955 million bushels. The USDA projection of the ex-farm price for soybeans for the 2018 harvest was narrowed from November to a range of 785 cents to 935 cents per bushel. At 13h00 on November 8th CME quotations for soybeans for December 2018 and March 2019 delivery were 913 cents and 926 cents per bushel respectively, higher by 4.6 percent compared to midpoint quotations in November.

Projected output of soybean meal was increased from the October 2018 WASDE to 49.15 million tons. Domestic use was held at 35.85 million tons. Exports were retained at 13.75 million tons despite an uncertain trade environment. The USDA held the projection of soybean meal prices over a range of $290 to $330 per ton. At 13H00 on December 11th CME quotations for December 2018 and March 2019 deliveries of soybean meal were $308 and $310 respectively.

DECEMBER 2018 WASDE #584 ESTIMATE FOR THE 2018 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION:

Harvest Area 88.3 m. acres (89.1 m. acres planted, corresponding to 99.0% of planted acreage )

Yield 52.1 bushels per acre (was 49.5 bushels/acre in 2017, 53.1 bushels on October WASDE)

Beginning Stock 438m. bushels

Production 4,600m bushels

Imports 25m. bushels

Total Supply 5,063m bushels Proportion of Supply

Crushings 2,080m. bushels 41.1%

Exports 1,900m. bushels 37.5% (was 2,060 bushels in October WASDE)

Seed 96m. bushels 1.9% (was 103m bushels in October WASDE)

Residual 32 m. bushels 0.6%

Total Use 4,107 m. bushels 81.1%

Ending Stocks 955 m. bushels 18.9% (was 885m bushels in October WASDE)

Average Farm Price: 785 to 935 cents per bushel (Up 25 cents on the low end and down 25 cents on the high end from the November 2018 WASDE Report)

Soybean Meal

Beginning Stocks 0.553 m. tons

Production 49.147 m. tons

Imports 0.350 m. tons

Total Supply 50.050 m. tons

Domestic Use 35.850 m. tons

Exports 13.750 m. tons

Total Use 49.600 m. tons

Ending Stocks 0.450 m. tons

Average Price ex plant : $290 to $330 per ton (Unchanged since the Sept. 2018 WASDE Report)

IMPLICATIONS FOR PRODUCTION COST

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

Updated World production and use of total grains and oilseeds is summarized for the 2017/2018 season taking into account Northern and Southern Hemisphere production are:-

Factor m.tons. Coarse grains Oilseeds

Output 1.374 601

Supply 1.743 718

World trade 201 180

Use 1.408 498

Ending stocks 335 129

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