June S&D Highlights
|Soybeans||+3/4||+2||-1 to -2|
|Wheat||-2.5; -6.5; -4.5||-1.75; -6.25; -4||-5; -9; -4|
|2019 Final||2020 May USDA||2020 June Trade||2020 Trade Range||2020 June USDA|
|Corn||13,663||15,995||15,917||15,460 - 15,995||15,995|
|Soybeans||3,557||4,125||4,138||4,118 - 4,273||4,125|
|All Wheat||1,920||1,866||1,855||1,824 - 1,940||1,877|
|All Winter||1,344||1,255||1,239||1,211 - 1,290||1,266|
|HRW||833||733||720||680 - 775||743|
|SRW||239||298||297||284 - 305||297|
|WW||272||224||224||215 - 228||225|
|May 19/20 USDA||June 19/20 Trade||June 19/20 USDA||May 20/21 USDA||June 20/21 Trade||June 20/21 USDA|
South America Production
|May 18/19 USDA||May 19/20 USDA||June 19/20 Trade||June 19/20 USDA||May 20/21 USDA||June 20/21 USDA|
|Argentina||55.3||51.0||50.7 (50.0 - 51.5)||50.0||53.5||53.5|
|Brazil||117.0||124.0||123.0 (120.9 - 125.0)||124||131.0||331.0|
|Argentina||51.0||50.0||49.8 (49.0 - 50.0)||50.0||50.0||50.0|
|Brazil||101.0||101.0||99.5 (96.5 - 102.0)||101.0||106.0||107.0|
World Ending Stocks (MMT)
|June 18/19||May 19/20||June 19/20||May 20/21||June 20/21||June 20/21|
June Supply-Demand Summary
Corn: Changes to both old and new crop were minimal. 19-20 reserves were increased 5 to 2.103 billion; the trade average was 60 million higher. New crop ending stocks went up 5 from the May estimate to 3.323; the trade was expecting a 38 million increase. Old crop ethanol demand isn’t recovering quite as quickly as anticipated but the 50 mbu cut in that sector’s demand was mostly offset by a downward revision in last fall’s crop by 45 million. Call it a neutral report with the near-term weather picture somewhat supportive.
Soybeans: The trade was looking for a 2 mbu decrease in old crop carry-out to 578 bbu; the USDA went up 5 reflecting the net of a smaller export forecast and a slightly higher crush and a 5 mbu downward production revision. New crop ending stocks came in at 395; the trade average was 429. China imports were increased 2 MMT for 19-20 but unchanged for new crop. Versus the trade, slightly supportive old and new crop but the modestly negative Board action seems appropriate.
Wheat: U.S. winter wheat production was above the average trade estimate, while new-crop U.S. ending stocks were also above expectations. World ending stocks for 2020/21 were also projected at a record level. There continue to be mixed ideas, however, about U.S. winter wheat crop potential. Strong export competition is forecast to persist in 2020/2021, although there is also some uncertainty regarding crop size in the EU, Russia and Ukraine. Weaker, although the market will closely monitor U.S. winter wheat yields and competitor crop conditions.
- Nary a change, other than ending stocks which were increased 5 as the result of the old crop adjustment;
- The 20-21 stocks to use ratio is unchanged at 22.5%;
- The point estimate for producer prices continues at $3.20
- Production was lowered 45 million bushels from last month to 13.617 billion;
- Harvested acres were trimmed by 100 K to 81.3 million and yield was reduced 4/10’s bpa to 167.4;
- Ethanol grind was lowered 50 mbu to 4.900 bbu as ethanol demand has not recovered quite as quickly as expected;
- Exports continue to be forecast at 1.775 bbu;
- Feed/residual use remains estimated at 5.7 bbu;
- With supply down 45 million and use 50 million lower, ending stocks edged up 5 to 2.103 bbu for a 15.3% stx to use ratio and;
- The average producer price estimate for 19-20 remains at $3.60 per bushel.
- No changes on the production and demand sides;
- 5 mbu lower stocks to 26 mbu as a result of adjustments to 19-20;
- Stocks to use now at 7.3%;
- Producer price point estimate remans at $3.20.
- Exports increased 10 million to 210, presumably on continued optimism for Chinese buying;
- Feed/residual use was reduced 5 to 95 mbu;
- FSI/ethanol grind remains forecast at 70 mbu;
- Stocks 5 lower at 30 mbu;
- Stocks to use ratio declines from 9.5% in May to 8% this month and;
- Producer price point estimate remains at $3.25.
- No change in estimated crop size which continues at 4.125 billion;
- Acreage steady at 83.5 million planted/82.8 million harvest with a 49.8 bpa yield;
- Beginning stocks 5 million larger from above;
- Crush raised 15 to 2.145 bbu;
- Seed/residual use steady from last month at 135 mbu;
- Exports, unchanged at 2.050 billion;
- Carry-over down 10 from LM to 395;
- Stocks to use goes from 9.4% to 9.1%;
- Price forecast unchanged at $8.20;
- New crop SBM
- Production 300 K ST higher than LM’s estimate;
- Domestic demand seen 300 K higher at 37.8 million short tons;
- Exports steady at 13.1 MST;
- Price of 48% SBM steady at $295 per ST;
- Beginning stocks up 60;
- SBO production 175 higher at 24.86 billion;
- Domestic/biodiesel use steady vs LM at 23.0 and 8.0 billion;
- Exports raised 100 mil lbs to 2.2 billion;
- Average price continues at $.29 per pound.
- Production 5 lower at 3.552 bbu;
- Crush 15 million higher to 2.140 bbu—greater domestic meal demand;
- Exports reduced 25 due to “greater competition from South America”, no mention of sluggish Chinese buying;
- Total use 10 lower;
- Ending stocks were 5 higher from last month at 585 mbu;
- Stx/use ratio rises from 14.9% LM to 16.3%;
- Producer price estimate unchanged at $8.50;
- As for the products,
- SBO production increased 110 million to 24.590 billion pounds;
- Domestic SBO use was reduced by 100 million pounds, due entirely to smaller expected biodiesel use, now at 7.4 billion;
- Exports increased 150 to 2.7 billion;
- Ending stocks increased from May by 60 million to 1.940 billion;
- Decatur SBO price continues to be estimated at $.2850 per pound
- SBM—SBM production increased 350 K ST to 50.323 MST;
- Domestic SBM use forecast boosted 400 K to 37.5 million;
- Export forecast holds at 13.45 MST and;
- Price of 48% protein Decatur SBM eases $5 to $295 per ST.
Winter Wheat Production—20/21
- Updated survey based estimate pegs new-crop winter wheat production at 1.266 bbu, which was 2% above the avg. trade guess but 3% lower than 2019;
- Harvested acreage pegged at 24.3 mil, which is unchanged from last month but fractionally below last year. Avg. yield is forecast at 52.1 bpa vs. the May est. of 51.7;
- HRW forecast at 0.743 bbu vs. avg. guess of 0.720; SRW pegged at 0.298, which is in line with the avg. guess; and White at 0.225 vs. avg. guess of 0.224;
- Implied Other Spring/Durum production pegged at 0.611 bbu vs. 0.616 for last year.
U.S. All Wheat Supply/Demand—20/21
- Updated forecast of new-crop puts all wheat production at 1.877 bbu, which is down 2% from 19/20, with total supply down 3% at 3.000 bbu;
- Usage—Food/seed up 3 mbu vs. 19/20; feed/residual down 35 mil to 100; exports down 15 to 950; total usage of 2.075 bbu is down 2% vs. 19/20;
- Net result is ending stocks for 20/21 of all wheat are pegged at 0.925 bbu, which was above the average trade guess of 0.901;
- Average farm price forecast at $4.60 with ending stocks-to-use ratio of 44.6% Note: Wheat-by-class projections for 2020/21 will first be published by the USDA in July.
U.S. All Wheat Supply/Demand—19/20
- Domestic use unchanged;
- Exports were lowered 5 million to 965 mbu;
- Carryout for 19/20 of all wheat was increased 5 mbu to 0.983 bbu, which was 3 million above the average trade guess of 0.980 and;
- Avg. farm price forecast at $4.60, which is unchanged versus May; stocks-to-use at 46.3% compared to 46.0% in May and 53.0% in 18/19.
- 20/21 beginning coarse grain stocks down 2.15 from LM to 343.7;
- 20/21 beginning corn stocks 1.8 MMT lower at 312.9 million;
- No adjustments to 19-20 competing exporter production; exports steady as well at 108.7 MMT;
- USDA lowers 19-20 foreign wheat feeding by 1.2 MMT to 138.5; 20-21 1 MMT lower at 133.75;
- 20-21 Brazil corn crop estimate raised 1 to 107 (101 TY); export steady at 38.0 (35.0 TY);
- Foreign corn import demand bumped up 350 K to 175.9 MMT, up 7.5 MMT versus 19-20;
- Competing 20-21 exports unchanged at 111.7, and up 3 MMT versus 19-20;
- China old crop feed use 1 MMT higher at 186; imports steady at 7 MMT and;
- China new crop feed consumption also up 1; imports unchanged at 7; ending stocks 2 MMT lower from LM to 198.1 for a 9 MMT drop.
- 19-20 S AM crop size unchanged from LM at 50 for Argentina and 124.0 for Brazil but, exports for each raised by 1 to 9.0 and 85.0;
- China 19-20 SB imports increased by 2 to 94.0 and crush increased by 1 MMT to 87.5;
- No changes to the 20-21 S AM production/export numbers: 53.5/131.0 and 6.5/83.0;
- China imports unchanged from LM in 20-21 at 96 MMT; crush increased by ½ MMT and;
- Global ending stocks expected to decline 2.9 MMT in 20-21 to 96.3 million.
- World production for 20/21 pegged at a record 773.4 MMT, which is up 4.9 MMT compared to May and 9.0 MMT above the 19/20 total;
- NOTE: With 2020/21 production estimates for some of the major world competitors up significantly from 2019/2020 (e.g. Australia), there appears to be ample export competition for U.S. origin if forecasted production levels are realized;
- Russia production forecast is unchanged from last month at 77.0 MMT, although the export forecast is up 1.0 MMT to 36.0 MMT (v. 33.5 in 2019/20);
- Ukraine production forecast is reduced 1.5 MMT to 26.5 MMT—down 9% from the 2019/20 level of 29.2. Exports are forecast at 17.5 MMT, which is down 1.5 MMT from May and down 3.0 MMT compared to 20.5 in 2019/20;
- Additional decline in European Union production is forecast—141.0 MMT v. 143.0 in May; exports are pegged at 28.5 vs. 28.0 last month (v. 36.5 in 19/20);
- Canada production estimate is unchanged at 34.0 (32.3 LY), and export forecast is steady at 24.5 MMT (23.0 LY);
- Australia crop est. is increased 2.0 MMT to 26.0 MMT (15.2 LY), with exports also projected 2.0 MMT higher at 17.0 vs. 9.2 for 19/20;
- Argentina crop forecast is steady at 21.0 (19.5 LY), and exports forecast at 14.5 vs. 13.5 for 19/20;
- World ending stocks for 20/21 estimated at a record 316.1 MMT vs. 295.8 for 19/20 and;
- Ending stock-to-use ratio for 20/21 pegged at 42.0% vs. 41.2% in May and 39.5% for 19/20.
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