USDA- WASDE FORECAST #576, April 10th 2018

04/10/2018

OVERVIEW

The April 10th 2018 USDA WASDE projections for the 2018 corn and soybean harvests were estimated based on preliminary planting intentions by farmers, long-range weather forecasts 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 retained the pre-planting corn yield at 176.6 bushels per acre (175.4 bushels in 2017). Soybean yield was retained at 49.1 bushels per acre (49.5 bushels in 2017), estimated in January 2018. The USDA April projection of ending stock for corn was raised by 2.6 percent to 2,182 million bushels due to lower “Feed and Residual” use. Ending stock for soybeans was lowered 0.9 percent to 550 million bushels compared to the March 2018 WASDE Report.

CORN

The projection of the corn harvest was retained from the March 2018 Report at 14,604 million bushels consistent with the uncertainty of the pre-planting period. The projection for 2018 can be compared to the 2017 harvest of 14,577 million bushels and is down 3.6 percent from the 2016 near-record harvest of 15,148 million bushels. The “Ethanol and Byproducts” category was retained at 5,575 m. bushels and exports were held at 2,225 m bushels. “Feed and Residual” was reduced by 50 m. bushels resulting in a corresponding increase of 0.9 percent in ending stocks to 2,182 m. bushels. The projected USDA range in farm price was narrowed to 320 to 350 cents per bushel. At close of trading on April 10th CME quotations for May and July 2018 corn were 390 cents and 398 cents per bushel respectively suggesting that the USDA projected range may be too low.

April 2018 WASDE #576 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 5,500 m. bushels 32.5%

Food & Seed 1,465 m. bushels 8.6%

Ethanol & byproducts 5,575 m. bushels 32.9 %

Domestic Use 12,540 m. bushels 74.0%

Exports 2,225 m. bushels 13.1%

Ending Stocks 2,182 m. bushels 12.9 %

Stock-to- domestic use proportion 17.4% (Was 16.9% in March 2018 WASDE Report)

Average Farm Price: $3.20 to $3.50 per bushel . (Up 5 cents on the low end and down 5 cents on the high end compared to the March 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 March 2018 WASDE Report except that crushings were increased by 0.5 percent to 1,970 m. tons. There was no change in projected exports despite the reduced output from Argentina nor any provision for reduced exports to China. Ending stocks were accordingly decreased to 550 million bushels. The USDA projection of the ex-farm price for soybeans for the 2018 harvest was narrowed to a range of 910 cents to 950 cents per bushel. At close of trading on April 10th CME quotations for soybeans for May and July 2018 delivery were 1,050 cents and 1,060 cents per bushel respectively.

Projected output of soybean meal was raised from the March 2018 WASDE to 46.5 million tons. Domestic use was raised 250,000 tons but exports were raised 0.8 percent to 12.5 million tons. USDA estimated soybean meal prices were raised on average by $10 per ton a range of $340 to $360 per ton. At close of trading on April 10th CME quotations for May and July 2018 deliveries of soybean meal were $384 and $388 respectively.

APRIL 2018 WASDE #576 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 1,970m. bushels 41.8%

Exports 2,065m. bushels 43.8%

Seed 103m. bushels 2.2%

Residual 30 m. bushels 0.6 %

Total Use 4,168 m. bushels 88.4%

Ending Stocks 550m. bushels 11.6%

Average Farm Price: 910 to 950 cents per bushel (Up 10 cents on the low end and down 10 cents on the high end compared to the March 2018 WASDE Report)

Soybean Meal

Beginning Stocks 0.401 m tons

Production 46.549 m. tons

Imports 0.400 m. tons

Total Supply 47.351 m. tons

Domestic Use 34.550 m. tons

Exports 12.500 m. tons

Total Use 47,050 m. tons

Ending Stocks 0.300 m. tons

Average Price ex plant : $340 to $360 per ton (Up $15 on low ends and up $5 on the high end of the range compared with the March 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 1.315 569

Supply 1.578 678

World trade 191 174

Use 1.354 489

Ending stocks 222 104

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










































































































































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