Goldman Sachs Group Inc. (NYSE:GS) said over the next 12 months they see energy as the top performer in the commodity sector, while they view agriculture as the weakest.
Energy is projected to rise at a 27 percent clip, followed by precious metals at 17 percent, and industrial metals at 15 percent. Agriculture on the other hand, is expected to plummet by 10 percent during the same time.
The analysts' report said, "For the more cyclical commodities, oil and copper, while continued indications of more supportive policy in the U.S. and China, better macro data in these key countries, and improving commodity data have pushed prices higher within their respective trading ranges, we continue to expect them to break out to the upside in coming months."
In the short term they do see some agriculture products doing well, as they raised their outlook on raw sugar, cotton, corn and arabica.
Showing posts with label Cotton. Show all posts
Showing posts with label Cotton. Show all posts
Monday, September 20, 2010
Tuesday, July 20, 2010
Monsanto (NYSE:MON) Closer to Commercializing New Soybean
Monsanto (NYSE:MON) said in a recent press release completed the latest submission to the U.S. Department of Agriculture for dicamba-tolerant soybeans.
The next steps will be to submit to the US Food and Drug Administration and other important global markets they plan on marketing the product to.
Roy Fuchs, global oilseeds lead for Monsanto, said, "We continue to identify and develop additional options to help soybean farmers protect and increase their yields and better control weeds and other soybean pests. This new biotech trait, combined with the Genuity Roundup Ready 2 Yield trait, would offer growers a flexible and effective weed management system for soybeans along with greater yield opportunity."
There is very little weed resistance to dicamba, with only two know species of weeds in the United States showing any resistance, and concerning soybeans, they exist primarily outside the most important production regions.
Monsanto is also working on gaining approval for a cotton product which would be dicamba tolerant as well.
The next steps will be to submit to the US Food and Drug Administration and other important global markets they plan on marketing the product to.
Roy Fuchs, global oilseeds lead for Monsanto, said, "We continue to identify and develop additional options to help soybean farmers protect and increase their yields and better control weeds and other soybean pests. This new biotech trait, combined with the Genuity Roundup Ready 2 Yield trait, would offer growers a flexible and effective weed management system for soybeans along with greater yield opportunity."
There is very little weed resistance to dicamba, with only two know species of weeds in the United States showing any resistance, and concerning soybeans, they exist primarily outside the most important production regions.
Monsanto is also working on gaining approval for a cotton product which would be dicamba tolerant as well.
Monday, March 8, 2010
Brazil, U.S. Cotton War
Cotton War Between U.S. and Brazil
After winning a case against the U.S. last year at the WTO for government subsidies to U.S. cotton farmers, Brazil has struck back legally after the U.S. continued its policies after the decision by the WTO.
Cotton farmers in the U.S. receive subsidies from the U.S. government when prices fluctuate, along with loan guarantee program for foreign buyers of cotton produced in the U.S.
In retaliation for not changing its policies, Brazil will start to impose larger tariffs against a number of American products in response. The tariffs will take effect in April if negotiations don't settle anything.
Tariffs on cotton could be taxed at 100 percent based on the Brazilian plan put forth. Other major American products could also be hit with major tariffs like household appliances and major consumer electronics like TV sets, which reportedly could double. Automobiles would also be hit hard, with duties up to 50 percent imposed on them.
This isn't even near the end of what Brazil is allowed to do under the ruling of the WTO case it won, as it could also hit American intellectual property rights, including the breaking of patents in areas like media, technology and pharmaceuticals.
It's incredible to me that the U.S. has continued to disregard the ruling of the World Trade Organization, while disrespecting one of their more important trading partners. This has been brewing and battled over for over eight years, and the U.S. should have responded with concrete action; not saying they wished they could have negotiated something. The fact that the U.S. refused to negotiate something is the problem. That and the babying of the U.S. cotton industry, which should stop being subsidized and compete on the global market.
Some say this would force changes in U.S. farm bill, and that would be a hard sell to politicians. Who cares? That farm bill needs to be thrown out and farmers in the U.S. forced to compete against their global counterparts. It's ridiculous for American farmers to need subsidies in light of the advantages they already have with capital and equipment over their foreign competitors.
Cotton War Between U.S. and Brazil
After winning a case against the U.S. last year at the WTO for government subsidies to U.S. cotton farmers, Brazil has struck back legally after the U.S. continued its policies after the decision by the WTO.
Cotton farmers in the U.S. receive subsidies from the U.S. government when prices fluctuate, along with loan guarantee program for foreign buyers of cotton produced in the U.S.
In retaliation for not changing its policies, Brazil will start to impose larger tariffs against a number of American products in response. The tariffs will take effect in April if negotiations don't settle anything.
Tariffs on cotton could be taxed at 100 percent based on the Brazilian plan put forth. Other major American products could also be hit with major tariffs like household appliances and major consumer electronics like TV sets, which reportedly could double. Automobiles would also be hit hard, with duties up to 50 percent imposed on them.
This isn't even near the end of what Brazil is allowed to do under the ruling of the WTO case it won, as it could also hit American intellectual property rights, including the breaking of patents in areas like media, technology and pharmaceuticals.
It's incredible to me that the U.S. has continued to disregard the ruling of the World Trade Organization, while disrespecting one of their more important trading partners. This has been brewing and battled over for over eight years, and the U.S. should have responded with concrete action; not saying they wished they could have negotiated something. The fact that the U.S. refused to negotiate something is the problem. That and the babying of the U.S. cotton industry, which should stop being subsidized and compete on the global market.
Some say this would force changes in U.S. farm bill, and that would be a hard sell to politicians. Who cares? That farm bill needs to be thrown out and farmers in the U.S. forced to compete against their global counterparts. It's ridiculous for American farmers to need subsidies in light of the advantages they already have with capital and equipment over their foreign competitors.
Cotton War Between U.S. and Brazil
Friday, February 26, 2010
Cotton Acreage Up This Year?
Cotton Planting and Cotton Prices 2010
Reports from the Mid-South Farm and Gin Show revealed that cotton acres planted could come to an estimated 10.1 million in 2010, according to the National Cotton Council.
Estimates are cotton consequently could sell for about $1 a pound if projections hold, as stocks would tighten up.
Other consequences could be less acreage planted in soybeans.
Cotton Planting and Cotton Prices 2010
Reports from the Mid-South Farm and Gin Show revealed that cotton acres planted could come to an estimated 10.1 million in 2010, according to the National Cotton Council.
Estimates are cotton consequently could sell for about $1 a pound if projections hold, as stocks would tighten up.
Other consequences could be less acreage planted in soybeans.
Cotton Planting and Cotton Prices 2010
Tuesday, January 5, 2010
Cotton Futures Prices Not Manipulated
Cotton Futures Prices Not Manipulated
After a 20-month study, the Commodity Futures Trading Commission concluded there was no market manipulation which resulted in the huge spike in cotton prices in 2008.
The CFTC could find no one reason for the large increase in cotton prices, but said it was probably a great number of factors which ended in the failure of two of the top cotton producers in America.
At the time of the crazy price swings, cotton contracts were traded on the IntercontinentalExchange's Futures U.S., which used to be called the New York Board of Trade.
This was good to hear as the government can't protect grownups from losing money when they invest, and it shouldn't have wasted all this time checking into this when you consider that a lot of commodities surged in price during that time period such as copper, oil and wheat. It's called supply and demand.
Here were some of the conclusions of the CFTC:
- The trading activity of the largest longs was not consistent with activity that would cause an increase in the price of cotton futures or options.
- Many market participants active in the futures and option markets before futures prices reached limit up were cotton merchants, who held significant short positions. They would not benefit financially from manipulating the price of cotton.
- During critical time periods before futures prices reached limit up, no participant in the option market had a significant long position or sold a significant existing option position.
- The merchants with large short positions were hedged, holding sufficient physical cotton to deliver against their contracts. There was no shortage of physical cotton, certificated stocks were rising. Little interest in March contract.
Per the report, some of the reasons for the increase in prices included the increase in commodity prices, tight credit, migration to electronic trading from pit trading, large market participants and limits on cotton market prices.
Cotton Futures Prices Not Manipulated
After a 20-month study, the Commodity Futures Trading Commission concluded there was no market manipulation which resulted in the huge spike in cotton prices in 2008.
The CFTC could find no one reason for the large increase in cotton prices, but said it was probably a great number of factors which ended in the failure of two of the top cotton producers in America.
At the time of the crazy price swings, cotton contracts were traded on the IntercontinentalExchange's Futures U.S., which used to be called the New York Board of Trade.
This was good to hear as the government can't protect grownups from losing money when they invest, and it shouldn't have wasted all this time checking into this when you consider that a lot of commodities surged in price during that time period such as copper, oil and wheat. It's called supply and demand.
Here were some of the conclusions of the CFTC:
- The trading activity of the largest longs was not consistent with activity that would cause an increase in the price of cotton futures or options.
- Many market participants active in the futures and option markets before futures prices reached limit up were cotton merchants, who held significant short positions. They would not benefit financially from manipulating the price of cotton.
- During critical time periods before futures prices reached limit up, no participant in the option market had a significant long position or sold a significant existing option position.
- The merchants with large short positions were hedged, holding sufficient physical cotton to deliver against their contracts. There was no shortage of physical cotton, certificated stocks were rising. Little interest in March contract.
Per the report, some of the reasons for the increase in prices included the increase in commodity prices, tight credit, migration to electronic trading from pit trading, large market participants and limits on cotton market prices.
Cotton Futures Prices Not Manipulated
Saturday, December 13, 2008
Commodities: World Agricultural Supply + Demand
Commodity Grain Stocks Rise Significantly in 2008 - 2009
World Agricultural Supplyand Demand EstimatesUnited States Department of AgricultureAgricultural Marketing Service Economic Research ServiceFarm Service Agency Foreign Agricultural ServiceWASDE-465 Approved by the World Agricultural Outlook Board December 11, 2008
WHEAT:
Projected U.S. wheat ending stocks for 2008/09 are raised 20 million bushels this month onhigher imports and lower food use. Wheat imports are projected 10 million bushels higher as abundant foreign supplies of feed quality wheat and extremely low ocean freight rates provide incentives toimport wheat for domestic feeding. Wheat food use is projected 10 million bushels lower based on thelatest mill-grind data from the U.S. Bureau of Census. High flour extraction rates are limiting year-toyear growth in wheat-milling use. By-class changes to imports and exports are also made this month reflecting the pace of shipments to date. The all-wheat season-average farm price is projected 15cents lower on both ends of the range to $6.40 to $7.00 per bushel. Global 2008/09 wheat production is projected at 684.0 million tons, up 1.6 million from last month. Increases for Canada, Brazil, EU-27, and Serbia more than offset a reduction for Argentina. Production for Canada is raised 1.3 million tons in line with the latest estimates from Statistics Canada. Brazil production is raised 0.4 million tons based on recent government estimates that indicate higher production despite excessive rains during harvest.
Production is raised 0.3 million tons for EU-27 with an increase for the United Kingdom which also experienced heavy harvest time rains that raised uncertainty about final yields. Production is raised 0.1 million tons for Serbia. Production for Argentina is cut 0.5 million tons asharvest results indicate substantial yield variability and reductions caused by extended dryness overthe past few months. World wheat imports and exports for 2008/09 are both lowered slightly this month. Imports are lowered as the increase in U.S. imports is more than offset by 0.2- million- ton reductions for both Malaysia and Vietnam. Exports are lowered as a 0.5-million-ton increase for Canada is more than offset by 0.5 million ton reductions for both Argentina and Australia. Exports are also lowered 0.1 million tons for Malaysia as reduced imports lower flour export prospects. World wheat consumption for 2008/09 is lowered this month mostly reflecting the reduction in U.S.wheat food use. Global wheat feeding is increased 0.3 million tons with increases for Australia and Brazil. Untimely harvest rains in eastern Australia and Brazil have reduced wheat quality in bothcountries. Partly offsetting is a reduction in expected wheat feed use in Vietnam with reduced imports.Global ending stocks are raised 2.1 million tons this month.
Nearly two-thirds of the increase is in North America with Canada and U.S. stocks projected 0.8 million tons and 0.5 million tons higher,respectively.
COARSE GRAINS:
Projected U.S. feed grain ending stocks for 2008/09 are raised this month withincreases for corn, barley, and oats. Corn use is projected lower with increased feed and residual usemore than offset by reductions in ethanol use and exports. Ethanol use is projected 300 million bushels lower this month as prospects for blending above federally mandated levels decline. Financialproblems for ethanol producers are reducing plant capacity utilization for existing plants and delaying plant openings for those facilities still under construction. Falling gasoline prices have also resulted in high relative prices for ethanol, reducing blender incentives. Despite reductions in expected meatproduction, corn feed and residual use is raised 50 million bushels as lower ethanol production reduces the availability of distillers grains. Corn exports are projected 100 million bushels lower reflecting strong competition from larger foreign grain supplies and the slow pace of sales to date. Projected ending stocks are raised 350 million bushels. The season-average farm price is projected at $3.65 to$4.35 per bushel, down on both ends of the range from last month’s $4.00 to $4.80 per bushel.Other U.S. feed grain changes this month reflect reduced prospects for exports and increased prospects for imports that are only partly offset by increased domestic use. Sorghum exports arereduced 10 million bushels based on the slow pace of sales and shipments. Sorghum feeding is raised an offsetting 10 million bushels. Barley imports are raised 5 million bushels and exports reduced 5 million bushels, adding 10 million bushels to ending stocks. Oats imports are raised 5 million bushels increasing projected ending stocks the same amount. The sorghum farm price is projected lower at$3.00 to $3.60 per bushel compared with $3.40 to $4.20 per bushel last month. The projected rangefor the oats farm price is narrowed 10 cents on both ends to $2.80 to $3.00 per bushel. The barley farm price range is raised 15 cents on each end of the range to $4.85 to $5.45 per bushel. The allbarley farm price continues to be supported by high pre-planting contract prices for 2008 malting barley. Global coarse grain supples for 2008/09 are projected 7.3 million tons higher this month with beginning stocks raised 1.6 million tons and production raised 5.7 million tons. Beginning stocks are increased partly reflecting upward revisions to 2007/08 production for Australia and Brazil sorghum and South Africa corn. Increased 2008/09 global coarse grain output is driven by higher projected corn production for China, EU-27, Canada, and Ukraine; higher projected barley production for Canada; and higher sorghum production for countries of Sub-Saharan Africa. China corn production is raised 4 million tons based on early provincial reports. EU-27 corn production is raised 1.4 million tons based on the latest reported data. Canada corn production is raised 0.7 million tons and barley production is raised 0.6 million tons based on the latest Statistics Canada estimates. Ukraine corn production is raised 0.5 million tons in line with yield indications from the final stages of harvesting. Partly offsetting is a reduction of 1.5 million tons for Brazil corn output on early season dryness for the first crop and lower expected area for the second crop. Corn production is also lowered 1.0 million tons for South Africa reflecting reduced area as indicated by planting intentions. Oats production for Australia is lowered 0.2 million tons based on the latest government estimate.World coarse grain imports and exports for 2008/09 are both lowered this month. Global exports are projected 2.3 million tons lower mostly reflecting this month’s reduction in U.S. corn exports. India corn exports are also reduced 0.5 million tons. Partly offsetting are increases for Brazil, Serbia, Canada, and Russia. Global coarse grain feeding is projected up 0.3 million tons as the 1.2-million-ton increase in U.S. corn is mostly offset by reductions in a number of countries. Global coarse grain consumption is projected 7.4 million tons lower mostly on lower expected U.S. ethanol corn use. Global coarse grain stocks for 2008/09 are projected at 165.5 million tons, up 14.6 million from last month, and the highest since 2004/05.
RICE:
Projected U.S. rice beginning stocks and production for 2008/09 are unchanged from a month ago; however, imports are lowered 3 million cwt to 22.5 million. The reduction in the import projectionis due to a slower-than-expected pace of imports early in the marketing year from key suppliers including Thailand and India, and the expectation that the pace will remain depressed the remainder of the marketing year. Long-grain imports are lowered 2 million cwt, while combined medium- and shortgrain imports are lowered 1 million. Although all rice domestic and residual use is unchanged from a month ago, the by-class projections are changed slightly with long-grain raised 1 million cwt and offset by a reduction of 1 million for combined medium- and short-grain. All rice exports are lowered 1 million cwt to 106 million, all in long-grain. Rough rice exports are raised 1 million cwt to 39 million, while combined milled- and brown-exports (on a rough-equivalent basis) are lowered 2 million cwt to 67.0 million. All rice ending stocks are projected at 23.4 million cwt, 2 million cwt below last month, with the reduction all in long-grain. The all rice season-average farm price is forecast at $15.15 to $16.15 per cwt, up 65 cents per cwt on both ends of the range. The long-grain season-average farm price range is projected at $14.50 to $15.50 per cwt, up 65 cents per cwt on each end of the range. The combined medium- and short-grain farm price range is projected at $18.00 to $19.00 per cwt, up $1.00 per cwt on each end. Although global rice prices have trended downward since the beginning of the marketing year, they are declining at a slower-than-expected rate. Government policies in Thailand (intervention program) combined with continued export bans by India and Egypt are affecting global prices. Additionally, monthly farm prices reported by the National Agricultural Statistics Service through November (preliminary) indicate that the season-average price will be higher than projected a month ago, particularly for medium-grain rice. World 2008/09 rice supply and use are changed little from a month ago. Global production is raised slightly because of small increases for South Korea and Uruguay. World imports are raised due to increases for Iran, Iraq, and Venezuela, which are partially offset by a reduction for the United States. Global ending stocks for 2008/09 are projected at 80.8 million tons, up slightly from last month, and 2.3 million tons above 2007/08. Stocks are raised for Iran, Iraq, Venezuela, and Uruguay; and lowered for Australia and the United States.
OILSEEDS:
U.S. oilseed production for 2008/09 is projected at 88.2 million tons, up slightly due to increased cottonseed production. Soybean exports are raised 30 million bushels to 1.05 billion bushels reflecting strong early season shipments and sales, especially to China. Soybean crush is reduced 30million bushels to 1.715 billion, reflecting weak domestic soybean meal consumption and lower soybean meal export prospects, especially to Canada. Projected soybean ending stocks are unchanged at 205million bushels. Soybeans and soybean product prices for 2008/09 are projected lower this month. The U.S. season average soybean price range for 2008/09 is projected at $8.25 to $9.75, down $0.85 on both ends. The soybean meal price is projected at $240 to $300 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 31 to 35 cents per pound, down 6.5 cents on both ends. Global oilseed production for 2008/09 is projected at a record 418.3 million tons, up 0.4 million tons from last month. Foreign crops account for nearly all of the change with higher estimates for rapeseed and peanuts only partly offset by lower soybean, sunflowerseed, and cottonseed production estimates. Projected soybean production for India increased 0.5 million tons from last month to a record 9.7 million. The change reflects higher yields resulting from this year’s harvest. Paraguay soybean production is reduced 0.7 million tons to 6.5 million tons due to lower planted area. Brazil soybean production is reduced 1 million tons to 59 million due to lower projected area. The reduction reflects recent government surveys that indicate area is expected to be unchanged from 2007/08. Canada rapeseed production is raised 1.7 million tons to a record 12.6 million tons based on the latest survey results from Statistics Canada. Canada’s soybean crop is also increased this month based on the survey. Argentina sunflowerseed production was reduced this month as unusually dry weather prevented producers from meeting earlier expectations. Sunflowerseed production was also reduced for India. Other changes include reduced cottonseed production for Brazil and Uzbekistan, and higher peanut production for India. Global oilseed crush for 2007/08 is reduced 0.5 million tons this month to 348 million due mainly tolower soybean crush for Brazil, Argentina, and the United States. Partly offsetting are increases insoybean crush for India, higher rapeseed crush for Canada and China, and higher sunflowerseed crush for EU-27. Global trade changes include reduced soybean exports for Argentina, Brazil, and Paraguay; Higher rapeseed exports for Canada; and higher rapeseed imports for China.Global oilseed ending stocks for 2007/08 are raised 0.8 million tons to 65.4 million mainly reflecting higher rapeseed stocks in Canada.
SUGAR:
Projected 2008/09 U.S. sugar supply is decreased 26,000 short tons, raw value, from last month, due to revised lower beginning stocks. Imports from Mexico are raised 80,000 tons and offsetby a reduction in imports under the re-export programs, while exports are lowered 80,000 tons to reflect the stronger U.S. dollar exchange rate relative to the Mexican peso. Ending stocks are raised 54,000 tons from last month to 961,000 tons, down 703,000 tons from 2007/08.For 2007/08, imports from Mexico are increased 159,000 tons to reflect additional information from U.S. Customs; and with the revision in ending stocks, the residual statistical discrepancy is lowered to -71,000 tons. For Mexico, estimated ending stocks for 2007/08 (Oct-Sep) are lowered 172,000 metric tons from last month mainly due to the increase in exports. Production and domestic use of sugar in Mexico for 2008/09 are unchanged from last month. With the changes in U.S.-Mexico trade, Mexico’s ending stocks for 2008/09 are lowered 322,000 tons to 1.03 million, down 355,000 tons from 2007/08.
LIVESTOCK, POULTRY, AND DAIRY:
Total U.S. meat production forecasts for 2008 and 2009 arereduced from last month. Forecasts for 2008 for all meats are lowered, reflecting a slowdown in outputduring the fourth quarter to date. The pork production forecast for 2009 is raised as lower feed costs result in slightly heavier weights, but this gain is more than offset by lower forecasts of beef and poultry. Cattle placements for the remainder of 2008 are expected to be lower which will result in reduced beef production in the first half of 2009. Poultry production is forecast lower as poor returns are expected to result in a continuation of production declines for the first part of 2009. Lower feed prices and higher broiler and turkey prices may stabilize production in the latter part of the year.Export forecasts for beef are little changed from last month, reflecting actual third-quarter data. Pork and broiler export forecasts are reduced for 2008 and 2009. Demand is expected to remain relatively weak due to economic uncertainty, and a stronger U.S. dollar may further dampen sales.Cattle, broiler, and turkey price forecasts for both 2008 and 2009 are lowered as demand is weaker than expected. Forecast hog prices are reduced slightly in 2008, but are unchanged for 2009 assupplies of competing meats are lowered. Egg prices are little changed. Milk production forecasts for 2008 and 2009 are reduced slightly from last month. The cow number forecasts are unchanged. Forecast milk per cow for both years is reduced reflecting the continued slowrate of growth in output per cow. Commercial export forecasts for 2008 are raised as export datapoints towards stronger-than-expected sales, especially on a fat basis. However, the forecasts for2009 are unchanged as weaker international demand is expected to limit exports. Fat basis imports for2008 are reduced due to weaker demand but skim-solids imports are adjusted to reflect higher-than expected third-quarter imports. Weakness in demand for fat basis imports is expected to carry into 2009, thus the fat basis import forecast for 2009 is lowered. Sales of nonfat dry milk (NDM) to the CCC are forecast for higher 2008 and 2009. The Class III price for 2008 is raised due to higher cheese prices, but the Class IV price forecast is lower due to lower butter and NDM price forecasts. Class III and Class IV prices for 2009 are reduced from last month as most product price forecasts are lowered. Demand both domestically and in international markets will likely be affected by economic weakness. Although relative product values may encourage milk to shift to cheese production, butter and NDM prices will be pressured by relatively weak demand for much of the year. Cheese prices are forecast weaker as domestic demand lags in a weak economy. Although the whey price is unchanged from last month, weaker cheese prices will push the Class III price lower while lower butter and NDM prices will result in a reduced Class IV price. The 2008 all milk price forecast is unchanged this month, averaging $18.30 to $18.40 per cwt, but the 2009 forecast is lowered to $14.95 to $15.75 per cwt.
COTTON:
The U.S. cotton estimates for 2008/09 show lower domestic mill use and exports compared with last month, resulting in higher ending stocks. Production is raised slightly. Domestic mill use is reduced 100,000 bales, reflecting a marginal decline from the level of recent months. Exports are reduced 750,000 bales, as sharply lower world consumption is anticipated to limit demand for U.S.cotton. Accordingly, ending stocks are raised nearly 15 percent from last month to 7.1 million bales.The forecast range of 41 to 51 cents per pound for the marketing year average farm price is 4 cents lower on both ends of the range. This month’s world cotton forecasts include lower production, consumption, and trade. World production is reduced 1.4 million bales from last month’s estimate, as lower production for India, Brazil, Egypt, and others is partially offset by an increase for Pakistan. World consumption is reduced sharply for the second consecutive month, as deteriorating economic conditions continue to fade demand prospects. Consumption is lowered 2.7 million bales to 116.6 million, with China, India, Pakistan, and Turkey accounting for most of the decrease. The revised world consumption estimate is 5.5 percent lower than 2007/08, which is the largest year-to-year percentage reduction since 1943/44. Consistent with lower world consumption, world trade is reduced 7 percent this month, due mainly to lower imports by China, Pakistan, and Turkey. India, the United States, and Uzbekistan account for most of the reduction in world exports. World stocks are raised 2.4 percent, but are still 2.6 million bales below the beginning level.
Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.
APPROVED BY: EDWARD T. SCHAFER SECRETARY OF AGRICULTURE
Commodity grain stocks report
World Agricultural Supplyand Demand EstimatesUnited States Department of AgricultureAgricultural Marketing Service Economic Research ServiceFarm Service Agency Foreign Agricultural ServiceWASDE-465 Approved by the World Agricultural Outlook Board December 11, 2008
WHEAT:
Projected U.S. wheat ending stocks for 2008/09 are raised 20 million bushels this month onhigher imports and lower food use. Wheat imports are projected 10 million bushels higher as abundant foreign supplies of feed quality wheat and extremely low ocean freight rates provide incentives toimport wheat for domestic feeding. Wheat food use is projected 10 million bushels lower based on thelatest mill-grind data from the U.S. Bureau of Census. High flour extraction rates are limiting year-toyear growth in wheat-milling use. By-class changes to imports and exports are also made this month reflecting the pace of shipments to date. The all-wheat season-average farm price is projected 15cents lower on both ends of the range to $6.40 to $7.00 per bushel. Global 2008/09 wheat production is projected at 684.0 million tons, up 1.6 million from last month. Increases for Canada, Brazil, EU-27, and Serbia more than offset a reduction for Argentina. Production for Canada is raised 1.3 million tons in line with the latest estimates from Statistics Canada. Brazil production is raised 0.4 million tons based on recent government estimates that indicate higher production despite excessive rains during harvest.
Production is raised 0.3 million tons for EU-27 with an increase for the United Kingdom which also experienced heavy harvest time rains that raised uncertainty about final yields. Production is raised 0.1 million tons for Serbia. Production for Argentina is cut 0.5 million tons asharvest results indicate substantial yield variability and reductions caused by extended dryness overthe past few months. World wheat imports and exports for 2008/09 are both lowered slightly this month. Imports are lowered as the increase in U.S. imports is more than offset by 0.2- million- ton reductions for both Malaysia and Vietnam. Exports are lowered as a 0.5-million-ton increase for Canada is more than offset by 0.5 million ton reductions for both Argentina and Australia. Exports are also lowered 0.1 million tons for Malaysia as reduced imports lower flour export prospects. World wheat consumption for 2008/09 is lowered this month mostly reflecting the reduction in U.S.wheat food use. Global wheat feeding is increased 0.3 million tons with increases for Australia and Brazil. Untimely harvest rains in eastern Australia and Brazil have reduced wheat quality in bothcountries. Partly offsetting is a reduction in expected wheat feed use in Vietnam with reduced imports.Global ending stocks are raised 2.1 million tons this month.
Nearly two-thirds of the increase is in North America with Canada and U.S. stocks projected 0.8 million tons and 0.5 million tons higher,respectively.
COARSE GRAINS:
Projected U.S. feed grain ending stocks for 2008/09 are raised this month withincreases for corn, barley, and oats. Corn use is projected lower with increased feed and residual usemore than offset by reductions in ethanol use and exports. Ethanol use is projected 300 million bushels lower this month as prospects for blending above federally mandated levels decline. Financialproblems for ethanol producers are reducing plant capacity utilization for existing plants and delaying plant openings for those facilities still under construction. Falling gasoline prices have also resulted in high relative prices for ethanol, reducing blender incentives. Despite reductions in expected meatproduction, corn feed and residual use is raised 50 million bushels as lower ethanol production reduces the availability of distillers grains. Corn exports are projected 100 million bushels lower reflecting strong competition from larger foreign grain supplies and the slow pace of sales to date. Projected ending stocks are raised 350 million bushels. The season-average farm price is projected at $3.65 to$4.35 per bushel, down on both ends of the range from last month’s $4.00 to $4.80 per bushel.Other U.S. feed grain changes this month reflect reduced prospects for exports and increased prospects for imports that are only partly offset by increased domestic use. Sorghum exports arereduced 10 million bushels based on the slow pace of sales and shipments. Sorghum feeding is raised an offsetting 10 million bushels. Barley imports are raised 5 million bushels and exports reduced 5 million bushels, adding 10 million bushels to ending stocks. Oats imports are raised 5 million bushels increasing projected ending stocks the same amount. The sorghum farm price is projected lower at$3.00 to $3.60 per bushel compared with $3.40 to $4.20 per bushel last month. The projected rangefor the oats farm price is narrowed 10 cents on both ends to $2.80 to $3.00 per bushel. The barley farm price range is raised 15 cents on each end of the range to $4.85 to $5.45 per bushel. The allbarley farm price continues to be supported by high pre-planting contract prices for 2008 malting barley. Global coarse grain supples for 2008/09 are projected 7.3 million tons higher this month with beginning stocks raised 1.6 million tons and production raised 5.7 million tons. Beginning stocks are increased partly reflecting upward revisions to 2007/08 production for Australia and Brazil sorghum and South Africa corn. Increased 2008/09 global coarse grain output is driven by higher projected corn production for China, EU-27, Canada, and Ukraine; higher projected barley production for Canada; and higher sorghum production for countries of Sub-Saharan Africa. China corn production is raised 4 million tons based on early provincial reports. EU-27 corn production is raised 1.4 million tons based on the latest reported data. Canada corn production is raised 0.7 million tons and barley production is raised 0.6 million tons based on the latest Statistics Canada estimates. Ukraine corn production is raised 0.5 million tons in line with yield indications from the final stages of harvesting. Partly offsetting is a reduction of 1.5 million tons for Brazil corn output on early season dryness for the first crop and lower expected area for the second crop. Corn production is also lowered 1.0 million tons for South Africa reflecting reduced area as indicated by planting intentions. Oats production for Australia is lowered 0.2 million tons based on the latest government estimate.World coarse grain imports and exports for 2008/09 are both lowered this month. Global exports are projected 2.3 million tons lower mostly reflecting this month’s reduction in U.S. corn exports. India corn exports are also reduced 0.5 million tons. Partly offsetting are increases for Brazil, Serbia, Canada, and Russia. Global coarse grain feeding is projected up 0.3 million tons as the 1.2-million-ton increase in U.S. corn is mostly offset by reductions in a number of countries. Global coarse grain consumption is projected 7.4 million tons lower mostly on lower expected U.S. ethanol corn use. Global coarse grain stocks for 2008/09 are projected at 165.5 million tons, up 14.6 million from last month, and the highest since 2004/05.
RICE:
Projected U.S. rice beginning stocks and production for 2008/09 are unchanged from a month ago; however, imports are lowered 3 million cwt to 22.5 million. The reduction in the import projectionis due to a slower-than-expected pace of imports early in the marketing year from key suppliers including Thailand and India, and the expectation that the pace will remain depressed the remainder of the marketing year. Long-grain imports are lowered 2 million cwt, while combined medium- and shortgrain imports are lowered 1 million. Although all rice domestic and residual use is unchanged from a month ago, the by-class projections are changed slightly with long-grain raised 1 million cwt and offset by a reduction of 1 million for combined medium- and short-grain. All rice exports are lowered 1 million cwt to 106 million, all in long-grain. Rough rice exports are raised 1 million cwt to 39 million, while combined milled- and brown-exports (on a rough-equivalent basis) are lowered 2 million cwt to 67.0 million. All rice ending stocks are projected at 23.4 million cwt, 2 million cwt below last month, with the reduction all in long-grain. The all rice season-average farm price is forecast at $15.15 to $16.15 per cwt, up 65 cents per cwt on both ends of the range. The long-grain season-average farm price range is projected at $14.50 to $15.50 per cwt, up 65 cents per cwt on each end of the range. The combined medium- and short-grain farm price range is projected at $18.00 to $19.00 per cwt, up $1.00 per cwt on each end. Although global rice prices have trended downward since the beginning of the marketing year, they are declining at a slower-than-expected rate. Government policies in Thailand (intervention program) combined with continued export bans by India and Egypt are affecting global prices. Additionally, monthly farm prices reported by the National Agricultural Statistics Service through November (preliminary) indicate that the season-average price will be higher than projected a month ago, particularly for medium-grain rice. World 2008/09 rice supply and use are changed little from a month ago. Global production is raised slightly because of small increases for South Korea and Uruguay. World imports are raised due to increases for Iran, Iraq, and Venezuela, which are partially offset by a reduction for the United States. Global ending stocks for 2008/09 are projected at 80.8 million tons, up slightly from last month, and 2.3 million tons above 2007/08. Stocks are raised for Iran, Iraq, Venezuela, and Uruguay; and lowered for Australia and the United States.
OILSEEDS:
U.S. oilseed production for 2008/09 is projected at 88.2 million tons, up slightly due to increased cottonseed production. Soybean exports are raised 30 million bushels to 1.05 billion bushels reflecting strong early season shipments and sales, especially to China. Soybean crush is reduced 30million bushels to 1.715 billion, reflecting weak domestic soybean meal consumption and lower soybean meal export prospects, especially to Canada. Projected soybean ending stocks are unchanged at 205million bushels. Soybeans and soybean product prices for 2008/09 are projected lower this month. The U.S. season average soybean price range for 2008/09 is projected at $8.25 to $9.75, down $0.85 on both ends. The soybean meal price is projected at $240 to $300 per short ton, down $15 on both ends of the range. The soybean oil price range is projected at 31 to 35 cents per pound, down 6.5 cents on both ends. Global oilseed production for 2008/09 is projected at a record 418.3 million tons, up 0.4 million tons from last month. Foreign crops account for nearly all of the change with higher estimates for rapeseed and peanuts only partly offset by lower soybean, sunflowerseed, and cottonseed production estimates. Projected soybean production for India increased 0.5 million tons from last month to a record 9.7 million. The change reflects higher yields resulting from this year’s harvest. Paraguay soybean production is reduced 0.7 million tons to 6.5 million tons due to lower planted area. Brazil soybean production is reduced 1 million tons to 59 million due to lower projected area. The reduction reflects recent government surveys that indicate area is expected to be unchanged from 2007/08. Canada rapeseed production is raised 1.7 million tons to a record 12.6 million tons based on the latest survey results from Statistics Canada. Canada’s soybean crop is also increased this month based on the survey. Argentina sunflowerseed production was reduced this month as unusually dry weather prevented producers from meeting earlier expectations. Sunflowerseed production was also reduced for India. Other changes include reduced cottonseed production for Brazil and Uzbekistan, and higher peanut production for India. Global oilseed crush for 2007/08 is reduced 0.5 million tons this month to 348 million due mainly tolower soybean crush for Brazil, Argentina, and the United States. Partly offsetting are increases insoybean crush for India, higher rapeseed crush for Canada and China, and higher sunflowerseed crush for EU-27. Global trade changes include reduced soybean exports for Argentina, Brazil, and Paraguay; Higher rapeseed exports for Canada; and higher rapeseed imports for China.Global oilseed ending stocks for 2007/08 are raised 0.8 million tons to 65.4 million mainly reflecting higher rapeseed stocks in Canada.
SUGAR:
Projected 2008/09 U.S. sugar supply is decreased 26,000 short tons, raw value, from last month, due to revised lower beginning stocks. Imports from Mexico are raised 80,000 tons and offsetby a reduction in imports under the re-export programs, while exports are lowered 80,000 tons to reflect the stronger U.S. dollar exchange rate relative to the Mexican peso. Ending stocks are raised 54,000 tons from last month to 961,000 tons, down 703,000 tons from 2007/08.For 2007/08, imports from Mexico are increased 159,000 tons to reflect additional information from U.S. Customs; and with the revision in ending stocks, the residual statistical discrepancy is lowered to -71,000 tons. For Mexico, estimated ending stocks for 2007/08 (Oct-Sep) are lowered 172,000 metric tons from last month mainly due to the increase in exports. Production and domestic use of sugar in Mexico for 2008/09 are unchanged from last month. With the changes in U.S.-Mexico trade, Mexico’s ending stocks for 2008/09 are lowered 322,000 tons to 1.03 million, down 355,000 tons from 2007/08.
LIVESTOCK, POULTRY, AND DAIRY:
Total U.S. meat production forecasts for 2008 and 2009 arereduced from last month. Forecasts for 2008 for all meats are lowered, reflecting a slowdown in outputduring the fourth quarter to date. The pork production forecast for 2009 is raised as lower feed costs result in slightly heavier weights, but this gain is more than offset by lower forecasts of beef and poultry. Cattle placements for the remainder of 2008 are expected to be lower which will result in reduced beef production in the first half of 2009. Poultry production is forecast lower as poor returns are expected to result in a continuation of production declines for the first part of 2009. Lower feed prices and higher broiler and turkey prices may stabilize production in the latter part of the year.Export forecasts for beef are little changed from last month, reflecting actual third-quarter data. Pork and broiler export forecasts are reduced for 2008 and 2009. Demand is expected to remain relatively weak due to economic uncertainty, and a stronger U.S. dollar may further dampen sales.Cattle, broiler, and turkey price forecasts for both 2008 and 2009 are lowered as demand is weaker than expected. Forecast hog prices are reduced slightly in 2008, but are unchanged for 2009 assupplies of competing meats are lowered. Egg prices are little changed. Milk production forecasts for 2008 and 2009 are reduced slightly from last month. The cow number forecasts are unchanged. Forecast milk per cow for both years is reduced reflecting the continued slowrate of growth in output per cow. Commercial export forecasts for 2008 are raised as export datapoints towards stronger-than-expected sales, especially on a fat basis. However, the forecasts for2009 are unchanged as weaker international demand is expected to limit exports. Fat basis imports for2008 are reduced due to weaker demand but skim-solids imports are adjusted to reflect higher-than expected third-quarter imports. Weakness in demand for fat basis imports is expected to carry into 2009, thus the fat basis import forecast for 2009 is lowered. Sales of nonfat dry milk (NDM) to the CCC are forecast for higher 2008 and 2009. The Class III price for 2008 is raised due to higher cheese prices, but the Class IV price forecast is lower due to lower butter and NDM price forecasts. Class III and Class IV prices for 2009 are reduced from last month as most product price forecasts are lowered. Demand both domestically and in international markets will likely be affected by economic weakness. Although relative product values may encourage milk to shift to cheese production, butter and NDM prices will be pressured by relatively weak demand for much of the year. Cheese prices are forecast weaker as domestic demand lags in a weak economy. Although the whey price is unchanged from last month, weaker cheese prices will push the Class III price lower while lower butter and NDM prices will result in a reduced Class IV price. The 2008 all milk price forecast is unchanged this month, averaging $18.30 to $18.40 per cwt, but the 2009 forecast is lowered to $14.95 to $15.75 per cwt.
COTTON:
The U.S. cotton estimates for 2008/09 show lower domestic mill use and exports compared with last month, resulting in higher ending stocks. Production is raised slightly. Domestic mill use is reduced 100,000 bales, reflecting a marginal decline from the level of recent months. Exports are reduced 750,000 bales, as sharply lower world consumption is anticipated to limit demand for U.S.cotton. Accordingly, ending stocks are raised nearly 15 percent from last month to 7.1 million bales.The forecast range of 41 to 51 cents per pound for the marketing year average farm price is 4 cents lower on both ends of the range. This month’s world cotton forecasts include lower production, consumption, and trade. World production is reduced 1.4 million bales from last month’s estimate, as lower production for India, Brazil, Egypt, and others is partially offset by an increase for Pakistan. World consumption is reduced sharply for the second consecutive month, as deteriorating economic conditions continue to fade demand prospects. Consumption is lowered 2.7 million bales to 116.6 million, with China, India, Pakistan, and Turkey accounting for most of the decrease. The revised world consumption estimate is 5.5 percent lower than 2007/08, which is the largest year-to-year percentage reduction since 1943/44. Consistent with lower world consumption, world trade is reduced 7 percent this month, due mainly to lower imports by China, Pakistan, and Turkey. India, the United States, and Uzbekistan account for most of the reduction in world exports. World stocks are raised 2.4 percent, but are still 2.6 million bales below the beginning level.
Approved by the Secretary of Agriculture and the Chairperson of the World Agricultural Outlook Board, Gerald A. Bange, (202) 720-6030. This report was prepared by the Interagency Commodity Estimates Committees.
APPROVED BY: EDWARD T. SCHAFER SECRETARY OF AGRICULTURE
Commodity grain stocks report
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