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USDA- WASDE FORECAST #574, February 8th 2018

02/09/2018

OVERVIEW

The  February 8th 2018 USDA WASDE projections for the 2018 corn and soybean harvests were estimated based on preliminary planting intentions by farmers and historical data. Harvest areas for corn and soybeans were projected to be 82.7 million acres (83.1 million in 2017) and 89.5 million acres, (unchanged from 2017) respectively. The USDA raised corn yield to 176.6 bushels per acre (175.4 bushels in 2017). Soybean yield was lowered to 49.1 bushels per acre (49.5 bushels in 2017), estimated in January 2018.  Ending stock for corn was reduced by 5.0 percent to 2,352 million bushels due to reduced exports. Ending stock for soybeans was raised 11.3 percent to 530 million bushels compared to the January 2018 WASDE Report.

CORN

The projection of the corn harvest was retained from the January 2018 Report at 14,604 million bushels compared to the 2017 harvest of 14,577 million bushels and down 3.6 percent from the 2016 near-record harvest of 15,148 million bushels. None of the major categories of use were changed. The projected USDA range in farm price was narrowed to 305 to 355 cents per bushel. At close of trading on February 9th CME quotations for March and July 2018 corn were 362 cents and 377 cents per bushel respectively.

FEBRUARY 2018 WASDE #574 ESTIMATE FOR THE 2018 CORN HARVEST:

Harvest Area                                 82.7 m* acres (90.2 m. acres planted, corresponding to 91.7 % of area harvested)

Yield                                              176.6 bushels per acre (was175.4 bushels per acre for 2017)

Beginning Stocks                         2,293 m. bushels

Production                                  14,604 m. bushels

Imports                                              50 m. bushels

Total supply                                16,947 m bushels       Proportion of Supply 

Feed & residual                            5,550 m. bushels                32.7% 

Food & Seed                                 1,470 m. bushels                 8.7% 

Ethanol & byproducts                   5,525 m. bushels               32.6 %

Domestic Use                              12,545 m. bushels               74.0%

Exports                                           2,050 m. bushels              12.1%

Ending Stocks                                2,352 m. bushels              13.9 %

Stock-to- domestic use proportion    18.7% (Was 19.7% in January 2018 WASDE Report)

Average Farm Price: $3.05 to $3.55 per bushel. (Up 10 cents on the low end and unchanged on the high end of the January 2018 WASDE Report)                                                                                                       

*m.=million

SOYBEANS and SOYBEAN MEAL

USDA retained the projected soybean harvest of 4,392 million bushels with a yield of 49.1 bushels per acre. Use parameters were essentially unchanged from the January 2018 WASDE Report except that exports were reduced by 2.8 percent to 2,100 m tons. Ending stocks were accordingly increased to 530 million bushels. The USDA February projection of ex-farm price for soybeans for the 2018 harvest was narrowed to a range of 890 cents to 970 cents per bushel. At close of trading on February 9th CME quotations for soybeans for March and July 2018 delivery were 984 cents and 1,004 cents per bushel respectively.

Projected output of soybean meal was retained from the January 2018 WASDE at 46.1 million tons. Estimated soybean meal prices were narrowed over a range of $305 to $335 per ton. At close of trading on February 9th CME quotations for March and July 2018 deliveries of soybean meal were $334 and $348 respectively.

FEBRUARY 2018 WASDE #574 ESTIMATE FOR THE 2018 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION: 

Harvest Area                                89.5m. acres (90.1 m. acres planted, corresponding to 99.3% of planted acreage )

Yield                                               49.1 bushels per acre (was 49.5 bushels/acre in 2017)

Beginning Stock                          302m. bushels

Production                                  4,392m bushels

Imports                                           25m. bushels

Total Supply                              4,718m bushels        Proportion of Supply

Crushings                                  1,950m. bushels                41.3%

Exports                                      2,100m. bushels                45.6%

Seed                                              106m. bushels                 2.2%

Residual                                          33 m. bushels                0.7 %

Total Use                                   4,188 m. bushels               88.8%

Ending Stocks                               530m. bushels                11.2% 

Average Farm Price:  890 to 970 cents per bushel (Up 10 cents on the low end and down 10 cents on the high end compared to the January 2018 WASDE Report)  

Soybean Meal

 Beginning Stocks                          0.401 m  tons

Production                                    46.099 m. tons

Imports                                           0.300 m. tons

Total Supply                                 46.800 m. tons                      

Domestic Use                                34.300 m. tons

Exports                                          12.200 m. tons

Total Use                                       46.500 m. tons 

Ending Stocks                                 0.300 m. tons 

Average Price ex plant:  $305 to $335 per ton (Up $10 on the low end compared with the January 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 as summarized for the 2016/2017 season are:-

Factor   m.tons.                            Coarse grains           Oilseeds      

Output                                                  1.322                     579

Supply                                                  1.585                     687

World trade                                             189                     176

Use                                                       1.354                     488

Ending stocks                                          230                     110

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