USDA’s May reports include the third initial look at new-crop 2016-2017 estimates, numbers that will be measured against February’s Outlook Forum and supply and demand tables concocted following the March 31 Prospective Plantings report.
USDA will release its latest Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports at 11 a.m. CDT Tuesday.
With so many numbers to discuss, let’s break it down by crop starting (as usual) with corn. The average pre-report estimate for old-crop (2015-2016) ending stocks came in at 1.825 billion bushels, down slightly from April’s 1.862 bb. However, DTN’s analysis following the March 30 Quarterly Stocks report suggested old-crop ending stocks could finish above 2.0 bb. Demand through March and April has been average at best, with exports still slightly behind pace to meet USDA’s April estimate of 1.650 bb. With that in mind, the 1.825 bb could be a bit optimistic.
More attention will be paid to USDA’s “initial” new-crop estimates. The average pre-report estimate for production came in at 14.151 bb, what would be the second-largest crop on record. Ending stocks are expected to breach the 2.0 bb level, with the average pre-report estimate coming in at 2.228 bb. These numbers are both below DTN’s estimates following the March 31 Prospective Plantings report that pegged corn at 93.6 million acres. At the time, DTN calculated production at 14.372 bb and ending stocks at a whopping 2.764 bb. Look for USDA to stick with its March 31 planted acreage estimate, with any change coming in its trendline yield projection of 168 bushels per acre. However, notice that there is a 900-millon-bushel-plus difference between the high and low estimates.
Old-crop world corn ending stocks are expected to decrease slightly, from April’s 208.91 million metric tons to an average pre-report estimate of 206.2 mmt. If realized, it could be due to a decrease in both Brazilian and Argentine production. Brazil’s crop is expected to be trimmed to 80.2 mmt from April’s WASDE report of 84.0 mmt, while Argentine production dips to 27.4 mmt from last month’s 28 mmt. New-crop ending stocks are expected to be trimmed further to 210.4 mmt, with the low end of estimates coming in below 200 mmt.
New-crop (2016-2017) domestic production is expected to come in at 3.788 bb, down from the previous year’s record estimate of 3.929 bb. Despite the 140 mb smaller crop (expected) the average pre-report estimates for both old-crop and new-crop ending stocks are nearly the same at 428 mb and 427 mb. This would suggest that estimators are expecting USDA to once again understate total demand. In its post-March 31 Quarterly Stocks report analysis, DTN calculated 2015-2016 ending stocks at 360 mb. Based on USDA’s Prospective Plantings estimate of 82.2 ma, down from the previous year’s 82.7 ma, DTN pegged new-crop ending stocks at 340 mb, down 100 mb from USDA’s Annual Outlook figure of 440 mb. An interesting note: The range of guesses for new-crop ending stocks is 748 mb to 248 mb — a range of 500 mb, or half-a-billion. In other words, like USDA, estimators have no idea when it comes to soybeans.
World ending stocks are expected to decrease from 79 mmt to roughly 76 mmt for 2015-16. As with corn, if this occurs, it will likely be due to an expected decrease in both Brazilian and Argentine production. Brazil’s crop is estimated to come in at “only” 99.1 mmt, as compared to April’s 100 mmt, while Argentine production could be trimmed to 55.5 mmt from the previous 59.0 mmt. New-crop global ending stocks are expected to start at 73.4 mmt.
Wheat numbers in general are expected to be bearish, with old-crop ending stocks expected to increase slightly to 978 mb. However, the high end of pre-report estimates came in at 1.014 bb. Given the continued slow pace of exports as the marketing year nears its end, a USDA estimate closer to the 1.0 level should not be viewed as surprising. New-crop ending stocks are expected to creep even closer, with the average pre-report estimate coming in at 991 mb. This is in line with USDA’s February Outlook ending stocks figure of 989 mb, based on total 2016 production of 1.911 bb. However, February’s table also used beginning stocks of 966 mb, meaning there’s a chance new-crop ending stocks could come in above 1.0 bb.
Global ending stocks are expected to remain burdensome, with old-crop pegged at 239.6 mmt as compared to April’s 239.26 mmt, and new-crop starting at 243.60 mmt. Global production numbers could see a similar increase from 2015-2016 to 2016-2017.
|2015-16 U.S. ENDING STOCKS (Billion Bushels)|
|2016-17 U.S. ENDING STOCKS (Billion Bushels)|
|2016-17 U.S. PRODUCTION (Billion Bushels)|
|2016-17 WINTER WHEAT PRODUCTION (Billion Bushels)|
|All Winter Wheat||1.378||1.445||1.297||1.370|
|2015-16 WORLD ENDING STOCKS (million metric tons)|
|2016-17 WORLD ENDING STOCKS (million metric tons)|
|WORLD PRODUCTION (Million Metric Tons)|
|European Union Wheat||160.0|