USDA-WASDE FORECAST #587 April 9th 2019

04/09/2019

OVERVIEW

The April 9th 2019 USDA WASDE projections for the 2019 corn and soybean harvests are based on historical yield and harvest data. The corn acreage to be harvested was determined from planting intentions to be 81.7 million acres (81.8 million in 2018). In 2019 soybeans will be harvested from 88.1 million acres (88.3 million acres in 2018). There was apparently no change due to recent Midwest flooding or the forecast for wet conditions from snowmelt prior to planting.

The USDA projected corn yield to attain 176.4 bushels per acre, (178.9 bushels in 2017). Soybean yield was projected at 51.6 bushels per acre (52.1 bushels in 2018). These values presume suitable planting conditions, time of sowing and standard rates of germination.

The April USDA projection of ending stock for corn was increased by 10.9 percent to 2,035 million bushels. Ending stock for soybeans will be 0.5 percent lower at 895 million bushels with minimal effect on CME price quotations subsequent to the noon release of the April WASDE.

It is emphasized that projections are based on the presumption of at least a partial settlement of the trade dispute with China followed by restoration of exports to that Nation.

CORN

The projection of the corn harvest for 2019 documented in the WASDE Report will attain 14,420 million bushels consistent with current planting intentions. The projection for 2019 can be compared to the 2018 harvest of 14,420 million bushels and is down 4.8 percent from the 2016 record harvest of 15,148 million bushels. The "Ethanol and Byproducts" category was retained at 5,550 m. bushels. Exports were reduced to 2,300 million bushels based on competition from Brazil and Argentine. The "Feed and Residual" category was lowered to 5,300 million bushels. Ending stocks will increase 10.9 percent to 2,035 m. bushels. The projected USDA range in farm price was narrowed with a change of 5 cents per bushel on either end of the range to 340 to 370 cents per bushel. At 15H00 on April 9th CME quotations for May 2019 and September 2019 corn were 360 cents and 377 cents per bushel respectively, 1.4 percent and 3.5 percent higher than the trade levels on March 8th.

April 2019 WASDE #587 ESTIMATE FOR THE 2019 CORN HARVEST:

Harvest Area 81.7 m* acres (89.1 m. acres planted, corresponding to 91.6 % of area harvested)

Yield 176.4 bushels per acre (was175.4 bushels per acre in 2017, 178.9 bushels per acre 2018)

Beginning Stocks 2,140 m. bushels

Production 14,420 m. bushels

Imports 40 m. bushels

Total supply 16,600 m bushels Proportion of Supply

Feed & residual 5,300 m. bushels 31.9%

Food & Seed 1,465 m. bushels 8.8%

Ethanol & byproducts 5,550 m. bushels 33.5 %

Domestic Use 12,265 m. bushels 73.8%

Exports 2,300 m. bushels 13.9%

Ending Stocks 2,035 m. bushels 12.3%

Stock-to- domestic use proportion 16.6% (Was 14.8% in the March 2019 WASDE Report)

Average Farm Price: $3.40 to $3.70 per bushel . (Up 5 cents per bushel on the low end and down 5 cents per bushel on the high end of the range compared to the March 2019 WASDE)

*m.=million

SOYBEANS and SOYBEAN MEAL

USDA projected the 2019 soybean harvest to be 4,544 million bushels based on a yield of 51.6 bushels per acre. Use parameters were essentially unchanged from the February 2019 WASDE Report with crushings at 2,100 m. tons. Projected exports were retained at 1,875 million bushels presumably in anticipation of a resolution of the trade conflict with China. This figure appears speculative given that negotiations are still in progress. China ceased imports in July 2018 and this nation is usually responsible for an offtake equivalent to 25 percent of U.S. production. Orders have been placed by China for soybeans to be delivered before September 2019 but at a lower level than in 2017 that represented a normal purchase pattern. Ending stocks were adjusted down to 895 million bushels. The USDA projection of the ex-farm price for soybeans for the 2019 harvest was narrowed by an increase of 25 cents per bushel on the low end and an equivalent reduction on the high end to a range of 835 cents to 885 cents per bushel. At 15H00 on April 9th CME quotations for soybeans for May 2019 and September 2019 delivery were 899 cents and 922 cents per bushel respectively, higher by 1.8 percent and 3.0 percent percent compared to CME quotations on March 8th.

Projected output of soybean meal was lowered from the March 2019 WASDE to 49.1 million tons. Domestic use was held at 35.95 million tons. Exports were retained at 13.75 million tons despite an uncertain trade environment. The USDA projected a $10 per ton change in the price of soybean meal narrowing the range to $305 to $325 per ton. At 15H00 on April 9 th CME quotations for May and September 2019 deliveries of soybean meal were $309 and $316 respectively, 3.3 percent and 4.3 percent higher than on March 8th.

APRIL 2019 WASDE #587 ESTIMATE FOR THE 2019 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION:

Harvest Area 88.1 m. acres (89.2 m. acres planted, corresponding to 98.8% of planted acreage)

Yield 51.6 bushels per acre (was 49.5 bushels/acre in 2017, 52.1 bushels/acre in 2018)

Beginning Stock 438m. bushels

Production 4,544m bushels

Imports 17m. bushels

Total Supply 4,999m bushels Proportion of Supply

Crushings 2,100m. bushels 42.0%

Exports 1,875m. bushels 37.5%

Seed 98m. bushels 2.0%

Residual 31 m. bushels 0.6%

Total Use 4,104 m. bushels 82.1%

Ending Stocks 895 m. bushels 17.9% (was 900m bushels in March WASDE)

Average Farm Price: 835 to 885 cents per bushel (Up 25 cents per bu. on the low end and down 25 cents per bu. on the high end compared to the March 2019 WASDE Report)

Soybean Meal

Beginning Stocks 0.553 m. tons

Production 49.097 m. tons

Imports 0.500 m. tons

Total Supply 50.150 m. tons

Domestic Use 35.950 m. tons

Exports 13.750 m. tons

Total Use 49.700 m. tons

Ending Stocks 0.450 m. tons

Average Price ex plant : $305 to $325 per ton (Up $10 per ton on the low end and down $10 per ton on the high end of the range compared to the March 2019 WASDE)

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 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

The projection for global coarse grains was up by 5.3 million m. tons. Forecasts were raised for Brazil, Argentina, Mexico and the E.U. but lowered for Pakistan, India, the Philippines and South Africa.

The projection for global oilseeds was up 2.0 million m. tons due to higher production from Brazil and increased canola from India.

Updated World production and use of total grains and oilseeds is summarized for the 2018/2019 season taking into account Northern and Southern Hemisphere production are:-

Factor Billion m.tons. Coarse grains Oilseeds

Output 1.377 595

Supply 1.747 710

World trade 200 177

Use 1.406 495

Ending stocks 341 123

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


















































































































































































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