302-934-1100

July Supply-Demand Summary


July S&D Highlights

July 12, 2018

Market Trend

Pre-Report Release Current (12:15)

Corn

CZ: -1 +2 +6

Soybeans

SX: unch -1 -1 1/2

Wheat

WU: +5 +6 +9

U.S. Carry-Out

June 17/18 July 17/18 July 17/18 June 18/19 July 18/19 July 18/19
USDA Trade Ave USDA USDA Trade Ave USDA

Soybeans

505 512 465 385 498 580

Corn

2,102 2,115 2,027 1,577 1,725 1,552

Wheat

1,080 1,100 1,100 946 985 985

Sorghum

29 NA 34 27 NA 35

Cotton

4.20 NA 4.00 4.70 NA 4.00

U.S. Production (mbu)/mil lb bales

July 17/18 USDA June 18/19 USDA July 18/19 Trade July 18/19 Range July 18/19 USDA

Corn

14,604 14,040 14,304 14,045-14,683 14,230

Soybeans

4,392 4,280 4,324 4,220-4,430 4,310

Sorghum

364 343 NA NA 356

Cotton

20.9 19.5 NA NA 18.50

U.S. Wheat Production

2017 Final Crop June USDA 2018 July Average Trade 18/19 Range July 18/19 USDA

All Wheat

1,741 1,827 1,860 1,769-1,923 1,881

Total Winter

1,269 1,198 1,199 1,178-1,224 1,193

Hard Red Winter

750 650 652 634-675 657

Soft Red Winter

292 316 316 305-334 303

White Winter

227 232 230 202-244 232

Other Spring

416 NA 600 568-646 614

Durum

55 NA 74 60-83 75

South America Production (MMT)

2017 June July Trade Trade Range of 2018 July June USDA 2019 July USDA 2019
Average Estimates

Corn-Argentina

33.0 32.7 32.0-33.0 33.0 41.0 41.0

Corn-Brazil

85.0 83.2 79.2-85.5 83.5 96.0 96.0

Brazil-CONAB

85.0 NA NA 82.9

SB-Argentina

37.0 36.7 35.5-37.5 37.0 56.0 57.0

SB-Brazil

119.0 118.9 117.0-120.0 119.5 118.0 120.5

Brazil-CONAB

118.0 NA NA 118.9 9.8

SB-Paraguay

10.0 NA NA 10.0 9.80

July Supply-Demand Summary

CORN: The report was friendly as the 18/19 production forecast came in at 14.23 bbu, 74 million below the trade average. The USDA left yield unchanged with the 190 mbu production increase from June coming as the result of more planted acres. Stocks for both old and new crop were below trade ideas: the 17/18 forecast declined 75 mbu to 2.027, 88 mbu BELOW the trade average and new crop fell 25 from LM to 1.552 bbu, 173 million LESS than the trade average. Export demand remains strong with the old crop forecast boosted 100 mbu to 2.4 billion and new crop, 125 million higher to 2.225 billion, reflecting reduced prospects from South America and Russia. Note that 18/19 c/o is already forecast some 23% smaller than LY and the crop is by no means, in the bin just yet.

SOYBEANS: China, China, China. Old crop U.S. balance sheet was somewhat friendly as stocks came in at 465 mbu, 40 less than the trade average. However, 18/19 inventories are expected to balloon 195 mbu from LM to 580. Main reason: Chinese soybean imports for the coming year were scaled back 294 mbu and U.S. export forecast fell 250 mbu from LM to 2.040 bbu. Additional competition can be expected from February forward: the USDA upped next spring’s S AM crops by 3 ½ MMT (129 mbu), along with ½ MMT higher revision to the recently harvested Brazil crop.

WHEAT: Initial survey-based estimate of U.S. HRS production was higher than expected at 584 mbu. Modest increase in crop size noted for U.S. HRW but SRW production declined from the June report. USDA indicates smaller competitor crops vs. last month in the EU (-4.4 MMT), FSU-12 (-2.5) and Australia (-2.0) will boost U.S. export prospects later in the crop year. Neutral to slightly supportive with the trade likely to quickly return to crop conditions in Russia, the EU and Australia.

DOMESTIC

Corn

Old Crop:

  • Feed/Residual use revised 50 million lower to 5.45 bbu based on lower than 3rd quarter disappearance as indicated from the June 1 stocks report;
  • Ethanol grind increased 25 to 5.6 bbu with other FSI reduced by 5 mbu;
  • Exports increased 100 to 2.4 billion;
  • Imports reduced by 5 to 40 mbu;
  • The net impact was to reduce ending stocks by 75 million to 2.027 bbu;
  • Average producer price range narrows in from $3.25-$3.55 in June, to $3.30-$3.50.

New Crop:

  • Beginning stocks down 75 mbu from above;
  • Harvested area increased 1.1 million from data in the June Acreage Report;
  • The above with yield unchanged at 174.0 adds 190 mbu to production for a 14.230 bbu crop;
  • With imports unchanged at 50 mbu; supply is therefore 115 mbu greater this month at 16.370 billion (but 630 mbu LESS than LY);
  • 18/19 ethanol use trimmed back 50 million;
  • Feed/residual use increased 75, reflecting reduced ethanol grind/production of DDGs and a modest decline in the expected average farm price;
  • Less export competition (especially Russia) as well as from Brazil’s current crop lifts export forecast 125 mbu higher to 2.225 billion;
  • Carry-out edges 25 lower to 1.552 (10.5% stx/use, versus 13.6% for the current year)
  • Expected producer price range slips 10 cents to $3.30-$3.40/bushel.

Milo

Old Crop:

  • Feed/residual use reduced by 5 mbu to 85;
  • Exports unchanged at 230;
  • FSI use steady at 50;
  • Carry-out increased 5 to 34 mbu;
  • Producer price range narrows in $.05 to $3.15-$3.25/bushel.

New Crop:

  • 200 K increase in harvested acres to 5.3 million;
  • Yield steady at 67.3 (72.1 LY);
  • Production up 13 to 356;
  • Beginning stocks 5 higher;
  • Usage side of the balance sheet 10 higher, reflecting 50 greater ethanol grind and 40 mbu drop in exports;
  • Ending stocks rise 8 mbu, from 27 LM to 35 million;
  • $3.10-$4.10 average producer price range, down 10 cents from June.

Soybeans/Products

Old Crop:

  • Imports reduced 3 to 22;
  • Residual use up 2 to 32;
  • Seed use 1 higher at 104 mbu;
  • Exports increased 20 to 2.085 bbu;
  • Crush 15 higher on increases to both domestic and export meal demand;
  • Net is a 40 mbu reduction in 17/18 carry-out to 465 mbu;
  • Average producer price estimate $.05 lower this month at $9.35
  • Meal:
    • Production up 600 K ST;
    • Domestic meal use increased 100 K;
    • Exports increased 400 K;
    • Ending stocks 100 K ST greater at 400 K;
    • Average price of 48% protein falls $10 to $350.
  • SBO
    • Production increased 290 million pounds;
    • Domestic use forecast raised 100 million pounds, all in biodiesel;
    • Exports raised 50 Mil lbs to 2.45 billion;
    • Ending stocks rise 140 mil lbs to 2.316 billion;
    • Average price of crude SBO, fob Decatur slipped ¼ cent per pound to $.3025.

New Crop:

  • Harvested area up 700 K acres, as indicated from the June Acreage report — yield holds steady at 48.5 bpa — production up 30 million to 4.310;
  • Beg stx down 40 mbu as above;
  • New crop crush 45 higher at 2.045 bbu;
  • Exports sliced 250 mbu to 2.045 bbu as the result of the recently 25% import duty imposed by China on U.S. soybean imports;
  • Ending stocks rise 195 mbu from LM to 580 million;
  • Average producer price range falls $.75 this month to $8.00-$10.50/bushel;

Products:

  • SBO beginning stocks increased 140 lbs to 2.316 billion;
  • Production 520 greater at 23.62 billion;
  • Imports steady at 300 million;
  • Domestic SBO use 500 mbu greater at 21.8, all due to biodiesel up 500;
  • Exports increased 100 mill lbs to 2.2 billion;
  • Endings stocks rise 60 mil lbs to 2.236 billion;
  • Average price range declines from $.2950-$.3350 to $.2800-$.3200;
  • SBM stocks increased 100 K to 400 K;
  • Meal production 1 million short tons larger at 48.45;
  • Domestic meal use forecast raised 300 K ST to 35.7 MST;
  • Exports boosted 700 K to 13.1 MST;
  • Expected price range reduced from $330-$370, to $315-$355.

Wheat

  • Initial survey pegs other spring wheat production at 0.614 bbu, which is slightly above the avg. trade guess of 0.600 and well above last year’s 0.416;
  • Harvested acreage was estimated at 12.9 million in line with the recent USDA Acreage report. National avg. yield forecast is 47.6 bpa (vs. 41.0 in 2017);
  • HRS forecast at 0.584 bbu, or 0.199 bbu above the 2017 estimate of 0.385 bbu. Major increase noted in North Dakota—average yield at 48.0 bpa vs. last year’s 41.0—with production up 0.104 bbu. Production increases relative to a year ago were also noted in Montana (+46 mbu); Minnesota (+29); and South Dakota (+21).

Winter Wheat Production – 18/19

  • Update pegs winter wheat production at 1.193 bbu, which is slightly below the avg. trade guess of 1.199 but within the trade range (1.178-1.224);
  • Harvested acreage increased 62,000 acres to 24.8 mil in line with the USDA Acreage report. National avg. yield est. decreased 0.4 bushels to 48.0 bpa (vs. 50.2 in 2017);
  • HRW forecast at 0.657 bbu, 7 million bushels above the June estimate of 0.650 bbu and above the avg. guess of 0.652. Increase seen in Kansas—average yield at 38.0 bpa (up 1 bushels from June) propelled production to 277 mbu, or up 7 million from last month. Alternatively, SRW output is pegged at 0.303 bbu vs. avg. guess of 0.316 and 0.316 last month with lower yields noted in Kentucky (-15.0 bpa); Tennessee (-12); Illinois (-6.0); Michigan (-5.0); and Indiana (-2.0). White wheat production pegged at 0.232 bbu vs. the avg. of 0.230 & unchanged vs. last month

U.S. All Wheat Supply/Demand—18/19

  • The increase in all wheat production to 1.881 bbu primarily reflects projections for larger output of HRS. Total supply of 3.117 bbu is up 1.2% vs. last year;
  • Usage—No change to food/seed vs. last month; feed/residual increased 10 mbu to 130 due to the larger crop; and exports boosted 25 million to 975 mbu on smaller competitor crops. Total use of 2.132 bbu is up 7.8% vs. 17/18;
  • Ending stocks of all wheat are forecast at 0.985 bbu, which was in line with the average trade guess; average farm price forecast at $4.50-$5.50, which is $0.10 lower on both ends vs. June. The ending stocks-to-use ratio is forecast at 46.2% vs. 45.1% last month and 55.6% in 17/18.

U.S. All Wheat Supply/Demand—17/18

  • Imports up 2 million to 157 mbu;
  • Feed/residual was lowered 20 million to 50 mbu;
  • Exports up 1 mbu;
  • Carryout up 20 mbu per the recent USDA Grain Stocks report to 1.100 bbu

U.S. Supply/Demand by Class—18/19

  • Hard Red Winter
    • Beginning stocks pegged at 581 compared to 541 last month due to lower 17/18 final domestic use;
    • First look at new-crop domestic use is 472 mbu, up 78 mil (20%) vs. last year;
    • Exports forecast at 365 mbu, down 6 million (2%) vs. 17/18;
    • Carry-out projected at 417 mbu vs. 581 last year (-28%);
    • Stocks-to-use forecast at 49.8% vs. 75.9% for 17/18
  • Soft Red Winter
    • Beginning stocks pegged at 205 vs. 223 in June due to higher 17/18 final domestic use;
    • Domestic use for 18/19 pegged at 229 mbu, unchanged vs. last year;
    • Exports forecast at 125 mbu—up 35 million (39%) from 17/18 total of 90;
    • Ending stocks forecast at 169 million vs. 205 for 17/18 (-18%);
    • Stocks-to-use estimated at 47.7% vs. 64.3% for 17/18
  • Hard Red Spring
    • Beginning stocks pegged at 191 vs. 200 in June due to higher 17/18 dom use;
    • Crop size of 584 mbu is up 52% from last year, with total supply up 19%;
    • First forecast of domestic use for 18/19 is 277 mbu, up 1% vs. last year;
    • Exports projected at 270 mbu vs. 228 in 17/18 (+18%);
    • Carry-out projected at 283 mbu vs. 191 in 17/18 (+48%);
    • Stocks-to-use pegged at 51.7% vs. 37.9% for last year

 

GLOBAL

Coarse Grains/Corn

  • 18/19 ending global coarse grain stocks reduced 1.8 MMT to 179.8 (221 LY);
  • Foreign wheat feeding reduced 600 K MT in 18/19 to 138.8 million and the 17/18 forecast was trimmed back 300 K to 143.3—4.5 MMT of additional corn/coarse grain demand in 18/19?;
  • Foreign 18/19 coarse grain production revised 5.2 MMT lower to 961.8 (930/9 LY);
  • FSU corn crop reduced 3 MMT in 18/19 to 47.5 (42.1 LY); No change in S AM estimates for 18/19 as well as RSA; Europe production up ½ MMT from LM to 61.5 (62.2 LY);
  • 17/18 Argentine corn crop unchanged at 33 MMT; Brazil’s crop reduced 1 ½ MMT to 83.5;
  • Boost to 17/18 U.S. corn exports to 2.4 bbu in part due to reduced exports from S AM with Argentina down 1 to 24.0 and Brazil 3 MMT lower to 26;
  • Slightly better old crop demand from LM with South Korea’s imports raised 100 K and Canada, 300 K
  • World ending corn stocks for 18/19 decline 2.7 MMT from June to 152.0 (191.7 LY—NOTE)

Soybeans

  • USDA reduced 17/18 China crush by 3 MMT to 92.0; imports steady from LM at 97.0; ending stocks rise 2.8 MMT to 23.44;
  • China’s 18/19 SB import forecast reduced 8 MMT to 95.0; stocks are expected to be drawn down 4.25 MMT with crush 5.5 MMT lower from LM at 96.5;
  • Global beginning 18/19 SB stocks are now 3 ½ MMT larger at 96.0; ending 18/19 global inventories are expected to climb 11.25 MMT (13%) to 98.3 million;
  • Production changes to old crop were limited to a ½ MMT increase in the Brazil crop to 119.5;
  • New crop changes found the USDA upping Argentine production 1 MMT to 57.0 (37.0 TY) and Brazil’s by 2.5 to 120.5(119.5 TY);
  • Old crop Competitor exports: Argentina 400 K lower from LM to 3.1; Brazil steady at 74.65; Paraguay unchanged at 6.25;
  • 18/19 exports: Argentina steady at 8.0; Brazil 2 MMT larger at 75.0;
  • PRC SBM demand seen flat in 18/19 at 75.6 MMT; non-PRC/NON-U.S. demand growth to rise from TY’s 8.76 MMT increase to a 9.5 MMT gain.

Wheat

  • Production for 18/19 decreased 8.4 MMT to 736.3 MMT;
  • Carryout for 18/19 declines 5.3 MMT vs. last month although still historically high at 260.9 MMT;
  • World ending stocks-to-use ratio for 18/19 now at 34.8% vs. 35.4% in June;
  • FSU-12 production forecast down 2.5 MMT from last month due to decreases in Russia (1.5 MMT) and Ukraine (1.0). Total FSU-12 exports estimate lowered 1.0 MMT to 60.0 MMT with decreases for Russia (1.0) and Ukraine (0.5) offsetting an increase in Kazakhstan (0.5). The 18/19 export estimate is 12% below the 17/18 record of 68.1 but above the 16/17 total of 54.4;
  • EU-27 crop lowered 4.4 MMT to 145.0 with exports reduced by 1.5 MMT to 27.5;
  • Australia crop lowered 2.0 MMT to 22.0 and exports lowered 1.0 to 16.0;
  • Canada production unchanged at 32.5 but exports increased 1.0 to 24.5 MMT;
  • Argentina production and exports were steady at 19.5 and 14.2, respectively
  • Combined exports from the EU, Australia, Canada and Argentina are lowered 1.5 MMT from last month to 82.2, although that is still up 12% vs. last year

Close

Your browser is out-of-date!

Update your browser to view this website correctly.

Get More Information