Share via Email


* Email To: (Separate multiple addresses with a semicolon)
* Your Name:
* Email From: (Your IP Address is 3.232.96.22)
* Email Subject: (personalize your message)


Email Content:

USDA-WASDE FORECAST #607 December 10th 2020

12/10/2020

OVERVIEW

The December 10th 2020 USDA WASDE Report was updated from the November edition with no change in either corn or soybean harvest. December values are based on actual harvest areas and yields. The corn acreage harvested is currently estimated at 82.5 million acres, unchanged from the November 10th WASDE report. Soybeans will be harvested from 82.3 million acres, unchanged from the December 10th WASDE report.

 

The December 2020 WASDE estimate of corn yield was retained at 175.8 bushels per acre, (168.0 bushels per acre in 2019). The estimate of soybean yield was retained at 50.7 bushels per acre. (47.4 bushels per acre in 2019)

 

The December USDA projection for the ending stock of corn was held at 1,702 million bushels. Due to exports the ending stock for soybeans was reduced by 7.9 percent to 175 million bushels.

 

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with increased compliance with the Phase-One trade agreement with China. The November WASDE projected the corn price to be $4.00 per bushel and soybeans at 1,055 cents per bushel.

 

It is presumed that projections are based on the assumption that China will as far as possible honor commitments that were disrupted during the first quarter of 2020 by COVID-19. China booked substantial orders for corn and soybeans delivered through August for the 2019-2020 market year in addition to large quantities booked from September onwards for the 2020-2021 market year. Reports on volumes of commodities exports to China will be included in upcoming editions of CHICK-NEWS and in subsequent mailings as data becomes available.

 

CORN

The corn harvest for 2020 documented in the December 2020 WASDE Report #607 is 14,507 million bushels consistent with actual data. The projected 2020 harvest can be compared to 2019 at 13,692 million bushels and is 4.2 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was unchanged at 5,700 million bushels. The “Ethanol and Byproducts” category was retained at 5,050 million bushels despite reduced domestic demand for E-10 due to COVID-19 restrictions and competition in the export markets. Corn exports were held at 2,650 million bushels in the face of intense competition from Brazil and Argentine and high world domestic coarse grain production relative to demand. Ending stocks were unchanged at 1,702 million bushels.

 

The forecast USDA farm price for corn was held at 400 cents per bushel. At 13H00 on December 10th after release of the WASDE the CME quotations for December and March corn were 422 cents and 424 cents per bushel down 0.2 percent and 1.7 percent respectively from quotations on November 10th.

 

DECEMBER 2020 WASDE #607 PROJECTIONS FOR THE 2020 CORN HARVEST:

Harvest Area

82.5 m acres

(91.0 m. acres planted, harvest corresponding to 90.7% of acres harvested)

Yield

175.8 bushels per acre

(was 178.4 bushels per acre in October WASDE.)

Beginning Stocks

1,995 m. bushels

Production

14,507 m. bushels

Imports

25 m. bushels

Total Supply

16,527 m. bushels

Proportion of Supply

Feed & Residual

5,700 m. bushels

34.5%

Food & Seed

1,425 m bushels

 8.6%

Ethanol & Byproducts

5,050 m. bushels

30.6%

Domestic Use

12,175 m. bushels

73.7%

Exports

2,650 m. bushels

16.0%

Ending Stocks

1,702 m. bushels

10.3%

Ending Stock-to-domestic use proportion

14.0%

(Was 17.7 % in the October 2020 WASDE Report)

1 metric ton = 39.368 bushels

 

Average Farm Price: $4.00 per bushel. (Unchanged from the November 2020 WASDE Report)

 

SOYBEANS and SOYBEAN MEAL

USDA confirmed the 2020 soybean crop at 4,170 million bushels. The 2020 harvest is based on a yield of 50.7 bushels per acre. With respect to use parameters crushings were raised 0.6 percent to 2,192 million tons. Projected exports were unchanged at 2,200 million bushels, based on orders from China during the fourth quarter of 2020 in accordance with the Phase-One Trade Agreement. In early September and through October prices increased in response to bookings for the 2020-2021market year. Prior to 2018 our largest trading partner imported the equivalent of 25 percent of U.S. soybeans. Ending stocks were adjusted downward from 190 million bushels in November to 175 million bushels in the December WASDE.

 

The USDA projection of the ex-farm price for soybeans for the 2020 harvest is 1,055 cents per bushel, up 15 cents per bushel from the November 2020 WASDE estimate. At 13H00 on December 10th and following release of the WASDE, the CME quotations for soybeans for January and March 2021 delivery were 1,160 cents and 1,166 cents per bushel up 1.2 percent and 1.9 percent respectively compared to the values on November 10th.

 

DECEMBER 2020 WASDE #607 PROJECTION FOR THE 2020 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION:-

Harvest Area

82.3 m acres

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

Yield

50.7 bushels per acre

(Was 51.9 bushels per acre in the October WASDE)

Beginning Stocks

523 m. bushels

(Unchanged from October 2019 WASDE)

Production

4,170 m. bushels

Imports

15 m. bushels

Total Supply

4,709 m. bushels

Proportion of Supply

Crushings

2,192 m. bushels

46.7%

Exports

2,200 m. bushels

46.7%

Seed

103 m. bushels

 2.2%

Residual

35 m. bushels

0.7%

Total Use

4,534 m. bushels

96.3%

Ending Stocks

175 m. bushels

3.7%

(Was 190 m. bushels in the November WASDE)

1 metric ton = 76.34 bushels

 

Average Farm Price: 1,055 cents per bushel (Up 15 cents per bushel from November WASDE Report)

 

The projected supply of soybean meal was raised to 51.7 million tons. Domestic use was unchanged at 38.3 million tons. Exports were held at 13.5 million tons. The USDA increased the ex plant price of soybean meal to $370 per ton up $15 per ton. At 13H00 on December 10th CME quotations for December 2020 and March 2021 deliveries of soybean meal were $390 and $382, lower by 0.5 percent and 1.8 percent respectively compared to the December 10th quotation.

 

DECEMBER 2020 PROJECTION OF SOYABEAN MEAL PRODUCTION AND USE

Beginning Stocks

0.341 m. tons

Production

51.709 m. tons

Imports

0.600 m. tons

Total Supply

52.650 m. tons

Domestic Use

38.300 m. tons

Exports

14.000 m. tons

Total Use

52.300 m. tons

Ending Stocks

0.350 m. tons

  1. = million

Average Price ex plant:$370 (Up $15 per ton from the November 2020 WASDE Report)

 

IMPLICATIONS FOR PRODUCTION COST

The price projections based on CME quotations for corn and soybeans suggest low to stable 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

With respect to world coarse grains and oilseeds the December WASDE included the following appraisals:-

 

 “Global coarse grain production for 2020/21 is forecast down 11.1 million tons to 1,447.8 million. The 2020/21 foreign coarse grain outlook is for lower production, virtually unchanged use, and greater stocks relative to last month. Foreign corn production is forecast lower with reductions for Ukraine, the EU, Russia, and Moldova more than offsetting increases for South Africa and Laos. For Ukraine, the projected corn yield is lowered based on continued poor harvest results to date and if realized would be the lowest since 2012/13”.

 

“Major global coarse grain trade changes for 2020/21 include larger corn exports for the United States, Turkey, and South Africa, with mostly offsetting reductions for Ukraine and Russia. Corn imports are raised for China and South Korea, but lowered for the EU, Mexico, and Iran. For China, while the National Development and Reform Commission has not made any public statements indicating additional corn import quota has been allocated, shipment data for exporting countries through early November indicates they will exceed their tariff rate quota level of 7.2 million tons. Barley exports are raised for the EU, with higher imports forecast for China. Total coarse grain imports for China are forecast to reach a record 26 million tons, just above the previous high of 25.7 million reached during 2014/15”.

 

“The 2020/21 global oilseed supply and demand forecasts include lower production, higher exports, and lower ending stocks. Global oilseed production is projected at 595.7 million tons, down 1.6 million from last month, with lower soybeans, rapeseed, sunflowerseed, and cottonseed. Global soybean production is projected down 0.6 million tons to 362.1 million. Higher soybean crops for Canada and Uruguay are offset by lower production for Argentina, which is reduced 1 million tons to 50 million on lower harvested area. Lower production for Argentina leads to lower crush and soybean meal exports, supporting higher U.S. exports. Global rapeseed production is projected lower as reduced estimates for Canada and the EU are partly offset by a larger Australian crop. Global sunflowerseed production is projected down 0.2 million tons to 49.5 million, with lower crops for Argentina and the EU”.

 

“Global oilseed trade for 2020/21 is projected at 191.8 million tons, up 1.0 million from last month. Increased soybean exports for Canada and Uruguay and increased rapeseed exports for Canada and Australia account for most of the gains. Global oilseed ending stocks are projected at 97.8 million tons, down 0.8 million from last month”.

 

Updated World production and use of total grains and oilseeds is summarized for the 2020/2021 season taking into account Northern and Southern Hemisphere production:-

 

Factor: billon m. tons

Coarse Grains

Oil Seeds

Output

1.448*

596

Supply

1.779

706

World Trade

227

192

Use

1.461

512

Ending Stocks

319

 98

*Values rounded to million m. tons

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