USDA raises 2017 wheat carryover 3% from March

12.04.2017

The U.S. Department of Agriculture in its April 11 World Agricultural Supply and Demand Estimates report raised its forecast for 2017 U.S. wheat carryover by 3% from its March forecast to near a 30-year high. The USDA also raised its soybean carryover forecast by 2% from March but left corn carryover unchanged.

The USDA forecast the carryover of wheat on June 1, 2017, at 1.159 billion bushels, up 30 million bushels from 1.129 billion bushels forecast last month and up 183 million bushels, or 19%, from 976 million bushels in 2016. The USDA forecast was above the average but within the range of pre-report trade expectations.

The increase in wheat carryover was the result of a forecast 5-million-bushel reduction in imports during 2016-17 more than offset by a 35-million-bushel decrease in feed and residual use. All other wheat forecasts were unchanged from March.

“Feed and residual use is lowered 35 million bushels to 190 million, which reflects lower-than-expected disappearance for the December-February and September-November quarters, as indicated by March 1 stocks from the March 31 Grain Stocks report,” the USDA said. “The import change (down 5 million bushels from March at 110 million) is based on the pace to date with reductions for soft red winter and durum.”

US wheat ending stocks
 
Total U.S. wheat supply in 2016-17 was forecast at 3,395 million bushels, down 5 million from March. Total use of wheat was forecast at 2,236 million bushels, down 35 million. Unchanged from March were use of wheat for food at 960 million bushels, seed at 61 million bushels and exports at 1.025 billion bushels. The average price of wheat paid to farmers also was unchanged at $3.80 to $3.90 a bushel, which compared with $4.89 a bushel in 2015-16.

The carryover of hard red winter wheat on June 1, 2017, was forecast at 580 million bushels, up 14 million from March based on a 19-million-bushel reduction in domestic use at 522 million bushels partially offset by a 5-million-bushel increase in exports at 430 million bushels.

Hard red spring carryover was forecast at 195 million bushels, up 6 million from March based on a like decrease in domestic use at 285 million bushels.

Soft red winter carryover was forecast at 229 million bushels, up 8 million from March based on a 2-million-bushel decrease in imports more than offset by a 10-million-bushel decrease in domestic use at 221 million bushels in 2016-17.

White wheat carryover was forecast at 106 million bushels, up 5 million from March based on a like decrease in exports at 165 million bushels.

Durum carryover was forecast at 49 million bushels, down 3 million from March based on a like decrease in imports at 157 million bushels.

Global 2016-17 wheat ending stocks were forecast at 252.3 million tonnes, up 2.3 million from March and up 10.52 million from 2015-16 based on higher beginning stocks and slightly higher production along with lower exports and consumption.

Soybean carryover on Sept. 1, 2017, was forecast at 445 million bushels, up 10 million, or 2%, from 435 million bushels forecast in March and up 126% from 197 million bushels in 2016. The USDA forecast was slightly below the average trade expectation of 447 million bushels.

The increase in carryover was the result of a 9-million-bushel increase in seed use more than offset by a 19-million-bushel decrease in residual use.

“Seed use is raised in line with the record plantings indicated in the March 31 Prospective Plantings report, and residual use is reduced based on indications from the March 31 Grain Stocks report,” the USDA said.

Total soybean supply in 2016-17 was forecast at 4.528 billion bushels, crushings at 1.940 billion bushels and exports at 2.025 billion bushels, all unchanged from March. Use of soybeans for seed was forecast at 104 million bushels, up 9 million from March, and residual use was forecast at 14 million bushels, down 19 million. The average price of soybeans paid to farmers was forecast at $9.40 to $9.70 a bushel, compared with $9.30 to $9.90 a bushel in March and $8.95 a bushel in 2015-16.

Soybean
 
Globally, 2016-17 soybean production was forecast at 345.97 million tonnes, up 5.18 million tonnes from the March forecast and up 32.95 million tonnes, or 11%, from 313.02 million tonnes last year. The increase was in part the result of forecast higher production in Brazil at a record 111 million tonnes, along with increases in Argentina, Paraguay and Mexico. Global soybean ending stocks were forecast at 87.41 million tonnes, up 4.59 million, or 6%, from March and up 10.28 million, or 13%, from 2015-16.

Brazil’s agricultural statistics agency, CONAB, on April 11 raised its forecast of 2016-17 soybean production in Brazil to 110.2 million tonnes. It was the fourth forecast increase from CONAB this year. The current soybean harvest was nearing completion in Brazil.

The carryover of corn on Sept. 1, 2017, was forecast at 2.320 billion bushels, unchanged from March but up 583 million bushels, or 34%, from 1.737 billion bushels in 2016 as a 50-million-bushel reduction in feed and residual use of corn was offset by a like increase in corn used for ethanol. The USDA forecast was below the average but within the full range of trade expectations.

“The pace of weekly ethanol production during March as indicated by Energy Information Administration data has been above expectations,” the USDA said, noting also that corn used to produce ethanol during the December-February period was record high.

The forecast total supply of corn in 2016-17 was unchanged from March at 16.940 billion bushels. Feed and residual use of corn was forecast at 5.500 billion bushels, down 50 million from March. The use of corn to make ethanol was forecast at 5.450 billion bushels, up 50 million from March. Food, seed and industrial use (excluding ethanol) was unchanged from March at 1.445 billion bushels, and exports were unchanged at 2.225 billion bushels. The average price of corn paid to farmers this year was forecast at $3.25 to $3.55 a bushel, compared with $3.20 to $3.60 a bushel forecast in March and $3.61 a bushel last year.

Global corn ending stocks were forecast at 222.98 million tonnes, up 2.3 million from March and up 11.15 million, or 5%, from 2015-16 as higher beginning stocks and production more than offset higher domestic use and exports.


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