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November Supply-Demand Summary


November S&D Highlights

November 8, 2018

NOTE: Production, domestic consumption, and ending stocks of corn for China are revised beginning with the 2007/08 marketing year. USDA’s estimates of corn stocks are based on official production estimates by NBS, trade data as reported by China Customs, and other related utilization data. For the time period encompassing the 2007/08 to 2017/18 marketing years, NBS increased corn total production by an unprecedented 266 million metric tons. USDA raises estimates of domestic disappearance, resulting in higher stock levels that sum to an additional 149 million tons of ending stocks for the 2018/19 marketing year.

Market Trend

Pre-Report At Release Current (12:30)

Corn

+3 +5 +2

Soybeans

-2 3/4 -3 Unch

Wheat

+3/4; -1 1/2 +4 +12/-2

U.S. Production

Oct 17/18 USDA Oct 18/19 USDA Nov 18/19 Trade Nov 18/19 Range Nov 18/19 USDA

Soybeans

4,411 4,690 4,676 4,637-4,698 4,600

Yield

49.3 53.1 52.9 52.5-52.5 52.1

Harv

89.5 88.3 88.3 87.9-88.35 88.3

Corn

14,604 14,778 14,721 14,576-14,806 14,626

Yield

176.6 180.7 180.0 178.2-181.0 178.9

Harv

82.7 81.8 81.7 81.5-81.8 81.8

Sorghum

364 382 NA NA 364

Cotton

20.92 19.76 NA NA 18.41

U.S. Carry-Out

Oct 17/18 USDA Nov 17/18 USDA Oct 18/19 USDA Nov 18/19 Trade Avg Nov 18/19 Trade Range Nov 18/19 USDA

Soybeans

438 438 885 898 833-1,010 955

Corn

2,140 2,140 1,813 1,733 1,688-1,841 1,736

Wheat

1,099 1,099 956 958 925-981 949

Sorghum

35 35 37 NA NA 39

Cotton

4.30 4.30 5.00 NA NA 4.30

South American Production

Oct 17/18 Nov 18/19 Oct 18/19 Nov 18/19

Arg Corn

32.0 32.0 41.0 42.5

Brazil Corn

82.0 82.0 94.5 94.5

Conab Corn

80.4 90.4 90.4 90.5

Arg SB

37.8 37.8 57.0 55.5

Brazil SB

119.8 119.8 120.5 120.5

Conab SB

119.3 118.2 118.2 118.0

World Ending Stocks (MMT)

Commodity Oct 17/18 USDA Nov 17/18 USDA Oct 18/19 USDA Nov 18/19 Trade Nov 18/19 USDA

Wheat

274.9 279.0 260.2 259.5 266.7

Corn

198.2 340.9 159.4 158.8 307.5

Soybeans

96.7 99.7 110.0 110.9 112.1

November Supply-Demand Summary

CORN: Markets lower as USDA adopts China’s upward revision in corn production/stocks, dashing hopes the country could be a significant importer in 2-3 years. Closer to home, revised yield of 178.9 (down 1.8 bpa from LM) narrowly below the low end of the trade range and takes 152 mbu off the production total. However, this is partially countered by a 50 mbu reduction in feed/residual and 25 in export demand. Net is stocks fall 77 mbu from LM to 1.736 or about 40 mbu below the trade average. Market had been down as much as 5-6 but has moved to 2-3 higher as the day unfolded.

SOYBEANS: Well, do we buy the USDA’s China bean numbers or, the Attache’? Former sees bean imports down just 4 MMT this month, the latter thinks it is more like 9 MMT. In any event, yield was cut 52.1 and the 90 mbu drop in production were a little more than expected by the trade. But, so was the 160 mbu reduction in exports with carry-out now pegged at 955 mbu, 50 or so above the trade average. USDA sees higher bean imports by Argentina, which keeps U.S ending stocks from topping the 1 bbu mark. Beans may continue to struggle to work higher in choppy trading.

WHEAT: Neutral to negative due to increase in China stocks. World ending stocks of wheat were above expectations due primarily to updated revisions to China’s production and carry-out. U.S. carry-out was actually below the average trade estimate as the USDA held exports steady and increased seed use. Australia crop size was lowered 1.0 MMT, though there are ideas production could decline further in future reports. Russian exports were unchanged at 35.0 MMT. Choppy trading likely to continue as market monitors final production from Australia and Argentina and export trends from Russia.

DOMESTIC

Corn

New Crop:

  • Corn production revised 152 million lower to 14.626 bbu on a 1.8 bpa drop in yield;
  • Feed/residual use reduced 50 million due to smaller crop and expected higher corn prices;
  • Exports trimmed back 25 million on heightened competition from the Ukraine;
  • FSI/ethanol grind unchanged from October at 7.13 bbu and 5.65 bbu;
  • Ending stocks revised 77 million lower at 1.736 billion
  • USDA ups the lower end of the expected average farm price, from $3.00-$4.00, to $3.20-$4.00
  • Stx/use ratio falls a ½ point, from 12.0% LM to 11.5% and versus 14.5% LY

Old Crop:

  • Some minor tweaking with feed/residual use down 4 to 5.298 and FSI up a like amount to 7.058 billion
  • Endings stocks remain at 2.14 bbu
  • 17/18 average farm price unchanged at $3.36

Milo

  • Yield down 3.6 bpa to 71.4 bpa;
  • Production declines 18 to 364 million;
  • Lack of export demand pushes 30 mbu into domestic feed channels, now at 135;
  • Feed/residual use increased 30 to 135 mbu;
  • Exports sliced 50 to 100 million;
  • FSI/Ethanol grind remains at 125 mbu;
  • Ending 18/19 stocks up 2 from LM to 39 mbu;
  • Producer price upped from $2.80-$3.80 to $3.00-$3.80

Yield adjustments from October: MN, down 7; SD, down 6; IA, down 6; IL, 2 lower; NE, unchanged; IN, unchanged; Ohio, up 3.

Soybeans & Products

  • Yield down 1 bpa to 52.1;
  • Production 90 mbu lower to 4.600 billion;
  • Crush increased 10 to 2.080 bbu (2.055 LY);
  • Exports SLICED 160 mbu to 1.9 bbu;
  • Seed use reduced 7 to 96 (104 LY);
  • Residual use cut 2 mbu from LM to 32 (8 LY)
  • Carry-out increases 70 to 955 mbu;
  • Despite larger carry-out, USDA narrows producer price range from $7.35-$9.85 to $7.60-$9.60
  • SBM
    • Beginning stocks boosted 33%/153 K ST to 553 K (NASS Crush Report);
    • 197 K ST increase in production with 10 mbu larger crush;
    • Added 500 K ST to domestic meal estimate (now at 35.85 MST);
    • Old crop domestic use reduced by 267 K ST to 34.733 (September NASS crush);
    • 18/19 meal export forecast increased 250 K ST to 13.75;
    • 17/18 SBM exports reduced 74 K to 14.826 MST (Census):
    • Average price of 48% SBM holds in a $290-$330 per ST range.
  • SBO:
    • Beginning stocks down 216 million pounds to 1.990 billion;
    • Domestic SBO use up 100 mil lbs to 22.2 billion; no change in biodiesel at 7.8 billion
    • Old crop use revised 176 million pounds higher at 21.376;
    • 18/19 SBO exports continue at 2.2 billion; LY’s reduced by 3 to 2.447 billion;
    • 18/19 SBO ending stocks estimated 201 million pounds lower at 1.915 billion;
    • Estimated price of SBO for 17/18 continues at $.3004; 18/19 range unchanged at $.28-$.32

Soybean yield changes: GA, -3; IA, -3; AL, -2; IL, -2; MO, -2; LA, no change; IN, no change; MS, no change; ND, no change; 1 bpa lower includes NE, OH, SD and WI.

Wheat

U.S. All Wheat Supply/Demand – 18/19

  • Updated production estimates from the USDA Small Grains Summary report released on Sep. 28 will be incorporated until the final report in January;
  • Total supply of 3.123 bbu is unchanged from last month but up 1.5% vs. last year;
  • Usage—Food, feed/residual and exports unchanged vs. last month; however, seed use was increased 6 mbu to 69 mbu. Total use of 2.174 bbu is up 9.9% vs. 17/18;
  • Ending stocks of all wheat are forecast at 0.949 bbu, which was below the average trade guess of 0.969; average farm price forecast at $4.90-$5.30 vs. $4.80-$5.40 in October. The ending stocks-to-use ratio is forecast at 43.7% is down from 44.1% last month and below 55.5% in 17/18.

U.S. Supply/Demand by Class—18/19

  • Hard Red Winter
    • Imports decreased 2 mbu vs. October;
    • Domestic use is up 1 mbu at 460 mbu;
    • Exports forecast at 360 mbu, down 5 million vs. October;
    • Carry-out projected at 426 mbu, up 2 million vs. last month;
    • Stocks-to-use forecast at 52.0% vs. 51.5% in October and 75.9% for 17/18
  • Soft Red Winter
    • Domestic use up 1 mbu from last month to 210;
    • Exports forecast at 120 mbu—steady vs. October;
    • Ending stocks forecast at 169 million, down 1 mbu vs. last month;
    • Stocks-to-use estimated at 51.2% vs. 51.7% in October and 67.0% for 17/18
  • Hard Red Spring
    • Imports increased 2 mbu vs. October;
    • Domestic use up 3 mbu from last month at 295 mbu;
    • Exports projected at 295 mbu, unchanged from October;
    • Carry-out projected at 260 mbu vs. 261 in October;
    • Stocks-to-use pegged at 44.1% vs. 44.5% last month and 37.0% for last year

GLOBAL

Coarse Grains/Corn

  • World ending coarse grain stocks up 148.3 MMT to 334.2, mostly due to China revision;
  • 17/18 ending stocks 142 MMT larger at 369.8
  • World ending corn stocks increased 148.2 MMT to 307.5; 17/18 carry-out up 142.7 to 340.9;
  • China corn beginning corn stocks go from 79.6 LM, to 222.5 TM (+143.0); ending stocks rise 149 MMT to 207.5 — so, China has a bit more cushion at the end of this year?
  • Production increases (corn): Argentina, +1.50 to 42.5; Ukraine, +2.5 to 33.50. Production decreases: EU, lowered 1 ½ MMT to 59.5 (62.1 LY);
  • Exports: Argentina raised 1 to 28.0 (23.0 LY); Brazil continues at 29.0 (22.0 LY); Ukraine, +2 to 27.0 (18.50 LY);
  • Foreign corn exports now at 103.4, up 3.3 from LM and up 3.3 from LY;
  • EU imports increased 1.5 MMT to 21.0 (18.0 LY) and USDA sees slight (1/2 MMT expansion) in SE Asia imports to 16.0(14.2 LY)

Soybeans

  • USDA not giving up the Chinese ghost just yet . . . reduced PRC sb imports 4 MMT to 90.0; Attache’ last week differed . . . thinks 85.0 MMT is more likely. USDA sees Chinese SBM use down 792 K from LM to 72.4. AND, up 2.1 MMT from 17/18. To be continued . . .
  • No change in 17/18 S Am bean crop size;
  • 18/19 estimate has Argentina 1 ½ MMT lower from LM at 55.5; noted that this year’s SB imports were raised 1.8 MMT to 4.4 million—expect more buying of U.S. beans between now and Feb/Mar;
  • Ending 18/19 world soybean stocks estimate increased 2.04 MMT to 112.1 (versus 99.7 for 17/18)

World Wheat

  • Production for 18/19 increased 2.6 MMT to 733.5 MMT—down 3.9% compared to last year’s record of 763.1;
  • Carry-out for 17/18 increases 4.2 MMT vs. last month to 279.0 MMT due primarily to historical revisions for China (up 4.4 MMT);
  • World ending stocks for 18/19 now pegged at 266.7 MMT (260.2 last month) with the stocks-to-use ratio at 35.8% vs. 34.9% in October and 37.4% in 17/18;
  • FSU-12 production forecast was lowered 560,00 MT from last month due primarily to a decrease in Ukraine (-500,000 to 25.0 MMT). Output in Russia was steady at 70.0 MMT. Total FSU-12 exports estimate was steady at 61.0 MMT compared to last year’s record of 69.1 MMT;
  • Australia crop was lowered 1.0 MMT to 17.5, though there are ideas production could decline further in future reports. Exports were reduced by 1.5 MMT to 11.5 MMT (14.0 last year); further reductions are possible if crop size shrinks;
  • EU-27 crop increased 100,000 MT to 137.6 but exports were steady at 23.0 MMT (23.3 last year);
  • Canada production steady at 31.5 with exports unchanged at 24.0 (22.0 last year);
  • Argentina production steady at 19.5 MMT and exports were unchanged at 14.2 (12.0 last year)

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