USDA-WASDE FORECAST

02/09/2021

USDA-WASDE FORECAST #609 FEBRUARY 9th 2021

 

OVERVIEW

The February 9th 2021 USDA WASDE Report was updated from the January 2021 edition to reflect the 2021 season. There was no change in either corn or soybean harvest areas from the January WASDE report but this may be altered subsequently by world prices and weather considerations. The corn acreage to be harvested is currently estimated at 82.5 million acres and soybeans will be harvested from 82.3 million acres.

 

The February 2021 WASDE estimate of corn yield was held at172.0 bushels per acre, (175.8 bushels per acre in 2020). The estimate of soybean yield was maintained at 50.2 bushels per acre. (50.7 bushels per acre in 2020)

 

The February 2021 USDA projection for the ending stock of corn was reduced by 3.2 percent to 1,502 million bushels. Due to exports the ending stock for soybeans was reduced by 14.3 percent to 120 million bushels the lowest in over a decade.

 

Projections for ending stocks of both corn and soybeans have influenced recent CME price quotations concurrently with increased exports in accordance with the needs of China less than compliance with the Phase-One trade agreement. The February 2021 WASDE projected the corn price to be $4.30 per bushel and soybeans at 1,115 cents per bushel.

 

It is accepted that projections are based on the assumption that China sharply increased purchases partly to cover disruptions during the first quarter of 2020 by COVID-19. China booked substantial orders for corn and soybeans to be 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 weekly editions of CHICK-NEWS and in subsequent mailings as data becomes available.

 

CORN

The corn harvest for 2021 documented in the February 2021 WASDE Report #609 is 14,183 million bushels consistent with actual data. The projected 2021 harvest can be compared to 14,507 million bushels in 2020 and is 6.4 percent lower than the previous 2016 record harvest of 15,148 million bushels. The “Feed and Residual” category was held at 5,650 million bushels. The “Ethanol and Byproducts” category was maintained at 4,950 million bushels despite reduced domestic demand for E-10 due to COVID-19 restrictions and competition in the export markets. Corn exports were raised 2.0 percent percent to 2,600 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 reduced 3.2 percent 1,502 million bushels.

The forecast USDA farm price for corn was raised to 430 cents per bushel. At 15H00 on February 9th after release of the WASDE the CME quotation for March corn was 556 cents per bushel, up 13.6 percent from the quotation on January 12th.

 

FEBRUARY 2021 WASDE #609 PROJECTIONS FOR THE 2021 CORN HARVEST:

Harvest Area

82.5 m acres

(90.8 m. acres planted, harvest corresponding to 90.9% of acres harvested)

Yield

172.0 bushels per acre

(was 175.8 bushels per acre in December WASDE.)

Beginning Stocks

1,919 m. bushels

Production

14,183 m. bushels

Imports

25 m. bushels

Total Supply

16,127 m. bushels

Proportion of Supply

Feed & Residual

5,650 m. bushels

35.1%

Food & Seed

1,425 m bushels

 8.8%

Ethanol & Byproducts

4,950 m. bushels

30.7%

Domestic Use

12,025 m. bushels

74.6%

Exports

2,600 m. bushels

16.1%

Ending Stocks

1,502 m. bushels

 9.3%

Ending Stock-to-domestic use proportion

12.5%

(Was 12.9 % in the January 2021 WASDE Report)

1 metric ton = 39.368 bushels

Average Farm Price: $4.30 per bushel. (Up 10 cents from the January 2020 WASDE Report)

 

SOYBEANS and SOYBEAN MEAL

USDA projected the 2021 soybean crop at 4,135 million bushels. The 2021 harvest is based on a yield of 50.2 bushels per acre. With respect to use parameters, crushings were held at 2,200 million tons. Projected exports were raised 0.9 percent to 2,250 million bushels, based on orders from China during the 2020-2021 market year. This was attributed more to needs and to lock-in prices in a rising market and less to comply with the Phase-One Trade Agreement. From early October to the present 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 harvested. Ending stocks were adjusted downward 20 percent from 140 million bushels in January to 120 million bushels as predicted in the February 2021 WASDE.

 

The USDA projection of the ex-farm price for soybeans for the 2020 harvest was held at 1,115 cents per bushel, unchanged from the January 2020 WASDE estimate. At 15H00 on February 9th and following release of the WASDE, the CME quotations for soybeans for March 2021 delivery was 1,404 cents per bushel, down 1.3 percent compared to January 12th 2021 but above the USDA projection.

 

JANUARY 2021 WASDE #608 PROJECTION FOR THE 2021 SOYBEAN HARVEST:-

Harvest Area

82.3 m acres

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

Yield

50.2 bushels per acre

(Was 50.7 bushels per acre in the December WASDE)

Beginning Stocks

525 m. bushels

(Up fractionally from the December 2020 WASDE)

Production

4,135 m. bushels

Imports

35 m. bushels

Total Supply

4,695 m. bushels

Proportion of Supply

Crushings

2,200 m. bushels

46.8%

Exports

2,250 m. bushels

47.9%

Seed

103 m. bushels

 2.2%

Residual

22 m. bushels

0.5%

Total Use

4,575 m. bushels

97.4%

Ending Stocks

120 m. bushels

2.6%

(Was 140 m. bushels in the January 2021 WASDE)

1 metric ton = 76.34 bushels

 

Average Farm Price: 1,115 cents per bushel (Unchanged from the January 2021 WASDE Report)

 

The projected supply of soybean meal was unchanged at 52.9 million tons. Domestic use was unchanged at 38.3 million tons. Exports were held at 14.25 million tons. The USDA increased the ex plant price of soybean meal to $400 per ton, up $10 per ton. At 15H00 on February 9th the CME quotation for March 2021 delivery of soybean meal was $439, up $10 per ton, down $33 per ton or 7.0 percent compared to the January 12th quotation.

 

FEBRUARY 2021 WASDE #609 PROJECTION OF SOYABEAN MEAL PRODUCTION AND USE

Beginning Stocks

0.341 m. tons

Production

51.959 m. tons

Imports

0.600 m. tons

Total Supply

52.900 m. tons

Domestic Use

38.300 m. tons

Exports

14.250 m. tons

Total Use

52.550 m. tons

Ending Stocks

0.350 m. tons

  1. = million

Average Price ex plant:$400 (Up $10 per ton from the January 2021 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 February WASDE included the following appraisals:-

 

Global coarse grain production for 2020/21 is projected marginally higher to 1,438.9 million tons. This month’s foreign coarse grain outlook is for higher production, lower consumption, and greater ending stocks relative to last month. Foreign corn production is up fractionally, with an increase for South Africa more than offsetting a reduction for Paraguay. For South Africa, production is raised based on higher indicated area. For Brazil, the corn production forecast is unchanged as greater area is offset by a reduction in yield. Slow second-crop planting progress in the Center-West dampens yield prospects but very favorable prices boost area expectations.

 

Major global trade changes for 2020/21 include higher projected corn exports for the United States, India, and South Africa. For 2019/20, Argentina and Brazil corn exports are raised for the local marketing year ending February 2021 based on larger-than- expected late-season shipments. Corn imports for 2020/21 are increased for China, with partly offsetting reductions for the EU-27+UK, South Korea, Japan, India, Saudi Arabia, and Turkey. China’s barley and sorghum imports are also higher this month, bringing total coarse grain imports to 40.3 million tons. Foreign corn ending stocks for 2020/21 are up relative to last month, mostly reflecting increases for China, South Africa, and Mexico that are partly offset by reductions for Argentina and Brazil. Global corn ending stocks, at 286.5 million tons, are up 2.7 million from last month.

 

Global 2020/21 soybean supply and demand forecasts include higher exports and lower ending stocks. Global exports are raised 0.6 million tons to 169.7 million on higher exports from the United States and Russia. Higher imports for Argentina are partially offset by reductions for the EU-27+UK, Canada, and Bangladesh. Global soybean stocks are reduced 1.0 million tons to 83.4 million as lower stocks in the United States and Brazil more than offset higher stocks in Argentina.

 

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

1.439*

595

Supply

1.770

706

World Trade

228

194

Use

1.454

513

Ending Stocks

316

 96

*Values rounded to million m. tons

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










































































































































































































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