Soybean prices surged higher, with some contracts gaining more than $0.50 per bushel, after the USDA released its World Agricultural Supply and Demand Estimates on May 10.
The big surprise was the estimate for new-crop ending stocks at 305 million bushels, which was much lower than the average trade estimate.
Here are the WASDE report highlights:
Soybeans: Soybean exports are forecast at close to 1.9 billion bushels, up 145 million from the revised 2015/16 projection. Sharply reduced stocks in South America this fall will limit competition during the first half of the marketing year. In addition, limited soybean production gains are projected for the 2016/17 South American harvest in early 2017. With forecasted global soybean import growth of 3.8 percent, the U.S. soybean export share is projected at 37 percent, up slightly from 2015/16 and near the 5-year average.
U.S. ending stocks for 2016/17 are forecast at 305 million bushels, down 95 million from the revised 2015/16 projection. The 2016/17 U.S. season-average soybean price range is forecast at $8.35 to $9.85 per bushel compared with $8.85 per bushel in 2015/16.
Corn: Production for 2016/17 is projected at 14.4 billion bushels, up 829 million from 2015/16 and 214 million higher than the previous record in 2014/15. A 5.6-million-acre increase in corn plantings more than offsets a small reduction in yield. The U.S. corn yield is projected at 168 million bushels per acre, down 0.4 bushels from 2015/16. Corn supplies for 2016/17 are projected at a record 16.3 billion bushels, up 886 million from 2015/16, which more than offsets projected declines for sorghum, barley and oats.
U.S. corn use for 2016/17 is projected at a record 14.1 billion bushels, 4 percent higher than for 2015/16. Feed and residual use for 2016/17 is projected 300 million bushels higher with higher production, lower expected prices, and further expansion in animal numbers. Corn used to produce ethanol is projected 50 million bushels higher than in 2015/16 with a reduction in sorghum use for ethanol and higher expected ethanol blending.
U.S. corn ending stocks for 2016/17 are projected at 2.2 billion bushels, up 350 million from the 2015/16 projection. If realized, stocks would be the highest since the mid-1980s; however, the stocks-to-use ratio remains far lower than in those years when domestic support policies ballooned stocks to more than 50 percent of annual usage. The season-average 2016/17 farm price is projected at $3.05 to $3.65 per bushel, down 25 cents at the midpoint from this month’s slightly higher outlook for 2015/16.
Wheat: U.S. wheat supplies for 2016/17 are projected up 6 percent from 2015/16 on higher beginning stocks and imports. All wheat production is projected at 1.998 billion bushels, down three per cent. The decrease is due to a sharp reduction in planted area that more than offsets increased yields. The all wheat yield is projected at 46.7 bushels per acre, up seven per cent from the previous year.
Total U.S. wheat use for 2016/17 is projected up seven per cent from the previous year on higher exports, feed and residual use and food uses. 2016/17 exports are projected at 875 million bushels, up 95 million bushels from the previous year’s low level but still well below average. Large supplies in several major competing countries will continue to limit U.S. exports.
U.S. ending stocks are projected to rise 51 million bushels from the elevated 2015/16 total to 1.029 billion, the highest since the 1987/88 crop year. The all wheat season average farm price is projected at $3.70 to $4.50 per bushel; the mid-point of this range is the lowest in 11 years.
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