USDA- WASDE FORECAST #577, May 10th 2018

05/11/2018

OVERVIEW

The May 10th 2018 USDA WASDE projections for the 2018 corn and soybean harvests are based on more defined planting intentions by farmers, long-range weather forecasts and historical data. Harvest areas for corn and soybeans were projected to be 80.7 million acres (83.1 million in 2017) and 89.2 million acres, (89.5 million acres in 2017) respectively. The USDA lowered corn yield to 174.0 bushels per acre (175.4 bushels in 2017). Soybean yield was lowered to 48.5 bushels per acre (49.5 bushels in 2017). The USDA May projection of ending stock for corn was reduced 22.9 percent to 1,682 million bushels due to lower “Food and Seed” and “Ethanol” use. Ending stock for soybeans was lowered 24.5 percent to 415 million bushels compared to the April 2018 WASDE Report.

It is accepted that the USDA projections of ending stocks and prices are independent of disruption by current uncertainties concerning future trade embargos or punitive tariffs.

CORN

The projection of the corn harvest was lowered from the April 2018 Report to 14,040 million bushels consistent with more firm intentions of farmers as half the crop is in the ground. The projection for 2018 can be compared to the 2017 harvest of 14,577 million bushels and is down 7.3 percent from the 2016 near-record harvest of 15,148 million bushels. The “Ethanol and Byproducts” category was raised 0.9 percent to 5,625 m. bushels and exports were lowered to 2,100 m bushels. “Feed and Residual” was reduced by 125 m. bushels resulting in a corresponding decrease of 22.9 percent in ending stocks to 1,682 m. bushels. The projected USDA range in farm price was widened to 330 to 430 cents per bushel. At close of trading on May 11 th CME quotations for May and July 2018 corn were 390 cents and 397 cents per bushel respectively.

 

May 2018 WASDE #577 ESTIMATE FOR THE 2018 CORN HARVEST:

Harvest Area 80.7 m* acres (88.0 m. acres planted, corresponding to 91.7 % of area harvested)

Yield 174.0 bushels per acre (was175.4 bushels per acre in 2017)

Beginning Stocks 2,182 m. bushels

Production 14,040 m. bushels

Imports 50 m. bushels

Total supply 16,272 m bushels Proportion of Supply

Feed & residual 5,375 m. bushels 33.0%

Food & Seed 1,490 m. bushels 9.2%

Ethanol & byproducts 5,625 m. bushels 34.6 %

Domestic Use 12,490 m. bushels 76.8%

Exports 2,100 m. bushels 12.9%

Ending Stocks 1,682 m. bushels 10.3 %

Stock-to- domestic use proportion 13.5% (Was 17.4% in April 2018 WASDE Report)

Average Farm Price: $3.30 to $4.30 per bushel . (Up 10 cents on the low end and up 80 cents on the high end compared to the April 2018 WASDE Report)

*m.=million

SOYBEANS and SOYBEAN MEAL

USDA lowered the projected soybean harvest by 2.6 percent to 4,280 million bushels with a yield of 48.5 bushels per acre. Use parameters were essentially unchanged from the April 2018 WASDE Report except that crushings were increased by 1.3 percent to 1,995 m. tons. Projected exports were increased 10.9 percent to 2,290 m bushels possibly due to the reduced output from Argentina but apparently without any consideration of reduced exports to China. Ending stocks were accordingly decreased to 415 million bushels. The USDA projection of the ex-farm price for soybeans for the 2018 harvest was widened to a range of 875 cents to 1,125 cents per bushel. At close of trading on May 11th CME quotations for soybeans for May and July 2018 delivery were 993 cents and 1,002 cents per bushel respectively.

Projected output of soybean meal was raised from the April 2018 WASDE to 47.2 million tons. Domestic use was raised 650,000 tons but exports were lowered slightly to 12.4 million tons. USDA estimated soybean meal prices were widened on average by $10 per ton on each end of the range to $330 to $370 per ton. At close of trading on May 11th CME quotations for May and July 2018 deliveries of soybean meal were $391 and $386 respectively.

MAY 2018 WASDE #577 ESTIMATE FOR THE 2018 SOYBEAN HARVEST AND SOYBEAN MEAL PRODUCTION:

Harvest Area 88.2m. acres (89.0 m. acres planted, corresponding to 99.1% of planted acreage )

Yield 48.5 bushels per acre (was 49.5 bushels/acre in 2017)

Beginning Stock 530m. bushels

Production 4,280m bushels

Imports 25m. bushels

Total Supply 4,835m bushels Proportion of Supply

Crushings 1,995m. bushels 41.3%

Exports 2,290m. bushels 47.4%

Seed 103m. bushels 2.1%

Residual 32 m. bushels 0.7%

Total Use 4,420 m. bushels 91.5%

Ending Stocks 415m. bushels 8.5%

Average Farm Price: 875 to 1,125 cents per bushel (Up 35 cents on the low end and up 125 cents on the high end compared to the April 2018 WASDE Report)

Soybean Meal

Beginning Stocks 0.300 m tons

Production 47.250 m. tons

Imports 0.350 m. tons

Total Supply 47.900 m. tons

Domestic Use 35.200 m. tons

Exports 12.400 m. tons

Total Use 47.600 m. tons

Ending Stocks 0.300 m. tons

Average Price ex plant : $330 to $370 per ton (Down $10 on low end and up $10 per ton on the high end of the range compared with the April 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 1.341 593

Supply 1.564 701

World trade 197 186

Use 1.378 509

Ending stocks 185 100

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






































































































































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