USDA’s December 2021 World Ag Supply and Demand Estimates report was called “neutral” for corn and soybeans and bearish for wheat.
This month’s 2021-2022 U.S. corn supply and use outlook is unchanged from November. USDA kept corn for ethanol use at 5.25 billion bushels despite forecasts of strong demand and higher production. Corn ending stocks are projected at 1.49 billion bushels, and the season-average farm price is still $5.45 a bushel.
Soybean supply and use projections also remain unchanged. Although soybean crush is unchanged, soybean oil production is raised because of a higher extraction rate. The season-average U.S. soybean price is unchanged at $12.10 per bushel.
Lower exports caused USDA to push up ending wheat ending stocks to an unexpected 598 million bushels. USDA also dropped wheat imports by five million bushels but left all other supply and demand factors at November levels.
The season-average farm price rose 15 cents to $7.05 a bushel.
WHEAT: The outlook for 2021/22 U.S. wheat this month is for slightly lower supplies, unchanged domestic use, reduced exports, and higher ending stocks. Supplies are lowered, on decreased imports with a weaker-than-expected pace for Hard Red Spring (HRS). Exports are lowered 20 million bushels to 840 million on slowing export sales and shipments with equivalent reductions for Hard Red Winter and HRS. Additionally, U.S. export prices are expected to remain elevated the rest of 2021/22, further diminishing U.S. competitiveness. Projected 2021/22 ending stocks are raised 15 million bushels to 598 million but are still 29 percent lower than last year. The projected season-average farm price (SAFP) is raised $0.15 per bushel to $7.05 on NASS prices reported to date and expectations for cash and futures prices for the remainder of 2021/22. This would be the highest SAFP since 2012/13.
The global wheat outlook for 2021/22 is for higher supplies, greater consumption, increased trade, and higher ending stocks. Supplies are projected rising by 4.3 million tons to 1,067.5 million, primarily on the combination of increased beginning stocks for Australia and the EU and upward production revisions for Australia, Russia, and Canada. Australia’s production is raised 2.5 million tons to a record 34.0 million, based mainly on the latest Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecast. Russia’s production is increased 1.0 million tons to 75.5 million, all for winter wheat on updated Ministry of Agriculture data. Canada’s production is raised 0.7 million tons to 21.7 million on the latest Statistics Canada forecast. Despite the increases for Russia and Canada, their respective production levels remain significantly below last year.
Projected 2021/22 world consumption is raised 1.9 million tons to 789.4 million on higher feed and residual use more than offsetting lower food, seed, and industrial use. Most of the feed and residual use increases are for Australia and Russia on higher production and for the EU, as more wheat feeding is expected with extended rains affecting grain quality at harvest. Projected 2021/22 global trade is raised 2.3 million tons to a record 205.5 million on higher exports by Australia, EU, India, and Ukraine. The largest import change is for Iran, up 1.5 million tons to 7.0 million on further reductions in production and heightened import activity. These would the largest Iranian wheat imports on record, surpassing 6.8 million tons in 2008/09. Projected 2021/22 world ending stocks are raised 2.4 million tons to 278.2 million with most of the increases from Australia, Canada, and the United States. Despite upward revisions to global stocks this month, they are still at a 5-year low.
COARSE GRAINS: This month’s 2021/22 U.S. corn supply and use outlook is unchanged from last month. The projected season-average farm price remains at $5.45 per bushel. Global coarse grain production for 2021/22 is forecast 2.7 million tons higher to 1,501.7 million. The foreign coarse grain outlook is for greater production, increased trade, and larger ending stocks relative to last month. Foreign corn production is forecast higher as increases for the EU and Ukraine more than offset a reduction for China. EU corn production is raised reflecting increases for France, Romania, and Poland. Ukraine corn production is higher based on harvest results to date. China corn production is reduced reflecting the latest information published by the National Bureau of Statistics which indicated higher area that was more than offset by a reduction in yield. Barley production is raised for Australia but lowered for the EU and Iran. Sorghum production is increased for Australia.
Corn exports are raised for Ukraine and the EU. Imports are raised for Iran, Egypt, Saudi Arabia, and the United Kingdom, but lowered for Israel. For 2020/21, corn exports for Brazil are raised for the local marketing year beginning March 2021, based on higher-than expected shipments through the month of November. Sorghum exports for 2021/22 are raised for Australia, with higher imports projected for China. Foreign corn ending stocks are raised, mostly reflecting increases for Ukraine, the EU, Mexico, and Iran that are partly offset by a reduction for China.
RICE: The outlook for 2021/22 U.S. rice is for reduced supplies, unchanged domestic use, slightly lower exports, and fractionally lower ending stocks compared with last month. The import forecast is reduced 1.5 million cwt to 33.5 million, based on a slow pace of shipments through October and expectations of continued high freight costs and limited container availability the rest of 2021/22. In addition, the export forecast is reduced by 1.0 million cwt to 89.0 million, all for medium- and short-grain rice, based on shipment pace and outstanding sales to-date. U.S. exports are limited by high prices and smaller U.S. supplies. Milled rice exports are reduced 2.0 million cwt to 55.0 million, which would be the lowest milled rice exports since 1973/74. Ending stocks are forecast fractionally lower to 34.5 million cwt. The season-average farm price forecast for all rice is unchanged this month at $14.80 per cwt, as an increase to the long-grain price forecast offsets a decrease in the medium- and short grain price.
The 2021/22 global outlook is for lower supplies, lower consumption, fractionally larger trade, and slightly reduced ending stocks compared with last month. Supplies are lowered 1.5 million tons to 697.7 million for 2021/22, mostly on smaller crop forecasts for Bangladesh, Thailand, and Peru. The global trade forecast is fractionally larger at 49.7 million tons, primarily due to an increase in exports for Burma. Global 2021/22 ending stocks are reduced 1.1 million tons to 186.8 million.
OILSEEDS: Total U.S. oilseed production for 2021/22 is forecast at 130.3 million tons, up slightly due to an increase for cottonseed. Soybean supply and use projections for 2021/22 are unchanged from last month. Although soybean crush is unchanged, soybean oil production is raised on a higher extraction rate. With increased soybean oil supplies, food, feed, and other industrial use of soybean oil is raised, offsetting lower consumption of canola and cottonseed oils. Based on a review of EPA’s proposed rule for 2020-2022 renewable fuel obligation targets, soybean oil used for biofuel for 2021/22 is unchanged at 11 billion pounds. The U.S. season-average soybean and soybean oil price forecasts for 2021/22 are unchanged at $12.10 per bushel and 65.0 cents per pound, respectively. The soybean meal price forecast is increased $5.00 to $330.00 per short ton.
The 2021/22 global oilseed supply and demand forecasts include lower production and lower ending stocks compared to last month. Global oilseed production is projected at 627.6 million tons, down 0.4 million from last month mainly driven by lower soybean production reported by China’s National Bureau of Statistics. China’s soybean production is down 2.6 million tons to 16.4 million on lower area. Largely offsetting China’s reduction is higher sunflower and soybean output for Russia and Ukraine based on harvest results. Rapeseed production is increased for Australia and lowered for Canada based on recent government reports, and India’s production is increased on a faster-than-expected planting pace. Global crush is reduced as lower soybean crush for China more than offsets higher sunflower seed crush for Russia and Ukraine.
Global oilseed trade for 2021/22 is projected at 196.0 million tons, up 0.5 million from last month. Increased rapeseed exports for Australia and increased soybean exports for Canada and Ukraine account for most of the gains. Global oilseed ending stocks are projected at 114.1 million tons, down 1.1 million from last month mainly on lower soybean stocks for China.
SUGAR: The U.S. sugar supply and use balance for 2020/21 is revised on data revisions made in Sweetener Market Data (SMD). A cane refiner decreased its raw sugar imports for August by 26,295 short tons, raw value (STRV), implying the same sized reduction in ending stocks to 1,701,915. The cane refiner revision, along with a small reduction in total imports (277 STRV) based on U.S. Census trade data, results in a 26,018 STRV increase in Direct Consumption Imports (904,298 STRV) and consequently in deliveries for human consumption (12,135,184 STRV). The ending stocks-to-use ratio is decreased by 0.3 percentage points to 13.8 percent.
Louisiana cane sugar production for 2021/22 is decreased by 71,592 STRV to 1,712,238 on the NASS 4.1 percent reduction in sugarcane yield. U.S. beet sugar production is decreased by 19,871 STRV to 5,393,301. Although SMD reports that U.S. beet processors increased their estimate of sugarbeets harvested (yield increase of 3.6 percent only partially offset by a decrease in area harvested of 3.3 percent), total sugarbeets projected for slicing decreased by 135,207 tons to 33,956,053 due to higher forecast shrink. USDA did not change sucrose recovery, sugar from desugared molasses, or 2022 August-September production in projecting production for the fiscal year. USDA can be expected to revise its projection of sucrose recovery next month when slice data through the end of November becomes available from beet processors. Because the slice data prior to November (August-October) is insufficient for forecasting full season sucrose recovery, the average of recoveries from the 5 preceding years is used until January.
Imports for 2021/22 are increased by 30,812 STRV to 3,075,895. High-tier tariff imports are increased by 50,000 STRV on the basis of actual entries of sugar through the beginning of December and an increase in the projected pace of refined sugar imports. Based on Customs reporting, imports of raw sugar at the high-tier tariff for October 1 through December 3 are 62,493 STRV. Imports of refined sugar for the same period are 15,179 STRV. USDA projects that monthly refined high-tier tariff imports will average about 7,250 STRV December through September. (The average for October-November was 7,590 STRV and the average for January-November was 12,585 STRV.) Imports from Mexico are reduced by 19,188 STRV to 1,064,712 as detailed below in the discussion on the Mexico supply and use. There are no changes from last month for sugar use. Ending stocks for 2021/22 are projected at 1,678,349 STRV for a stocks-to-use ratio of 13.6 percent.
Mexico supply and use for both 2020/21 and 2021/22 are unchanged from last month.
Exports to the United States for 2021/22 are projected at 911,218 metric tons (MT), a
decrease of 16,422 from last month. Calculated U.S. Needs implied by the December 2021
U.S. Sugar WASDE as set out in the AD/CVD Suspension Agreements is 900,253 MT
(1,051,901 STRV). This amount exceeds the Export Limit of 777,723 MT (908,730 STRV)
established by the Department of Commerce (DOC) on November 23, 2021. There is an
additional export amount of 10,965 MT (12,812 STRV) from the 2020/21 export allocation to
Mexico that was permitted by DOC to enter the United States after September 30. Because
total Mexico exports for 2021/22 are unchanged from last month at 1,777,193 MT, shipments
other than to the United States under export license increase by 16,422 MT to 865,976.
LIVESTOCK, POULTRY, AND DAIRY: Total red meat and poultry production for 2021 is
reduced from last month as lower broiler and turkey production more than offsets higher beef
and pork production. The beef production forecast is raised on higher fed cattle slaughter
and heavier carcass weights. Pork production is increased on the current pace of hog
slaughter. Broiler production is reduced on recent hatchery and slaughter data while the
turkey production forecast is lowered on recent slaughter data. Egg production is forecast
lower on recent production data.
For 2022, total red meat and poultry production is raised from last month. Beef production is
unchanged from the previous month while pork production is raised on heavier carcass
weights. Broiler production is raised as higher prices are expected to support expanding
production. Turkey production is lowered from last month. Egg production is raised on
higher hatching egg production.
Beef import forecasts are raised for 2021 and 2022 but no change is made to the export
forecasts. The 2021 pork export forecast is reduced from last month largely on weaker
import demand from China. Broiler exports are unchanged for 2021, but forecasts are raised
for 2022 on stronger expected demand. Turkey exports for both 2021 and 2022 are lowered
modestly on recent trade data.
The cattle price forecasts for 2021 and 2022 are raised on current price strength and
expectations of continued demand strength into next year. The fourth-quarter hog price is
reduced on recent prices, but no change is made to 2022 hog prices. The 2021 and 2022
broiler price forecasts are raised from last month on current prices and expectations that
demand will remain firm. The 2021 turkey price is reduced on recent prices, but 2022 prices
are raised on tighter expected supplies.
The milk production forecasts are projected lower for 2021 and 2022 on lower expected dairy
cow numbers and slower growth in milk per cow. The 2021 fat basis import forecast is raised
on higher imports of cheese and butterfat products while the export forecast is lowered on
weaker sales of butterfat products. The 2021 skim-solids basis import forecast is
unchanged, but the export forecast is raised on stronger global demand for lactose. For
2022, the fat basis and skim solid import forecasts are unchanged. The fat basis export
forecast is raised due to stronger shipments of butterfat. The skim-solids basis export
forecast is raised on larger shipments of lactose and other dairy products.
Butter, cheese, and whey price forecasts for 2021 are raised from last month on current
prices and strength in demand. The nonfat dry milk (NDM) price forecast for 2021 is
unchanged. The 2021 Class III price forecast is raised on higher cheese and whey prices
and the Class IV price forecast is raised on the higher butter price. The 2021 all milk price
forecast is raised to $18.60 per cwt. For 2022, cheese, butter, NDM, and whey price
forecasts are raised on lower expected milk supplies. Class III and Class IV price forecasts
for 2022 are raised on higher forecast dairy product prices. The all milk price for 2022 is
raised to $20.75 per cwt.
COTTON: The U.S. cotton 2021/22 supply and demand forecasts are largely unchanged this
month, with only a slight increase in production. The U.S. production forecast is raised about
0.5 percent as higher yields in other regions offset lower yields for the Southwest. U.S.
exports, mill use, and ending stocks are unchanged from their November forecasts. Upland
cotton’s projected season-average price is also unchanged from November, at 90 cents per
pound, 36 percent above its year-earlier level.
Projected 2021/22 world cotton ending stocks are 1.2 million bales lower this month due to
lower beginning stocks, lower production, and slightly higher consumption. Historical
adjustments to Indian production over 2018-2020 reflect updated official estimates from
India, resulting in a net 500,000-bale decline in 2021/22 beginning stocks there, and
accounting for most of a 700,000-bale decline in global beginning stocks. Projected world
production in 2021/22 is 200,000 bales lower this month as a 1.0 million bale drop in
Pakistan more than offsets gains in Benin, Turkey, Uzbekistan, and Cameroon. World cotton
trade is forecast 300,000 bales higher this month as higher expected imports for Pakistan,
Vietnam, and smaller markets in Central America and Southeast Asia more than offset a
250,000-bale decline for China. Exports are projected higher for Brazil and the Franc Zone.
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