U.S.D.A. raises 2017 wheat carryover 3% from March

by Ron Sterk
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WASHINGTON — The U.S. Department of Agriculture in its April 11 World Agricultural Supply and Demand Estimates report raised its forecast for 2017 U.S. wheat carryover by 3% from its March forecast to near a 30-year high. The U.S.D.A. also raised its soybean carryover forecast by 2% from March but left corn carryover unchanged.

The U.S.D.A. forecast the carryover of wheat on June 1, 2017, at 1,159 million bus, up 30 million bus from 1,129 million bus forecast last month and up 183 million bus, or 19%, from 976 million bus in 2016. The U.S.D.A. forecast was above the average but within the range of pre-report trade expectations.

The increase in wheat carryover was the result of a forecast 5-million-bu reduction in imports during 2016-17 more than offset by a 35-million-bu decrease in feed and residual use. All other wheat forecasts were unchanged from March.

“Feed and residual use is lowered 35 million bus to 190 million, which reflects lower-than-expected disappearance for the December-February and September-November quarters, as indicated by March 1 stocks from the March 31 Grain Stocks report,” the U.S.D.A. said. “The import change (down 5 million bus from March at 110 million) is based on the pace to date with reductions for soft red winter and durum.”

Total U.S. wheat supply in 2016-17 was forecast at 3,395 million bus, down 5 million from March. Total use of wheat was forecast at 2,236 million bus, down 35 million. Unchanged from March were use of wheat for food at 960 million bus, seed at 61 million bus and exports at 1,025 million bus. The average price of wheat paid to farmers also was unchanged at $3.80 to $3.90 a bu, which compared with $4.89 a bu in 2015-16.

The carryover of hard red winter wheat on June 1, 2017, was forecast at 580 million bus, up 14 million from March based on a 19-million-bu reduction in domestic use at 522 million bus partially offset by a 5-million-bu increase in exports at 430 million bus.

Hard red spring carryover was forecast at 195 million bus, up 6 million from March based on a like decrease in domestic use at 285 million bus.

Soft red winter carryover was forecast at 229 million bus, up 8 million from March based on a 2-million-bu decrease in imports more than offset by a 10-million-bu decrease in domestic use at 221 million bus in 2016-17.

White wheat carryover was forecast at 106 million bus, up 5 million from March based on a like decrease in exports at 165 million bus.

Durum carryover was forecast at 49 million bus, down 3 million from March based on a like decrease in imports at 157 million bus.

Global 2016-17 wheat ending stocks were forecast at 252.3 million tonnes, up 2.3 million from March and up 10.52 million from 2015-16 based on higher beginning stocks and slightly higher production along with lower exports and consumption.

Soybean carryover on Sept. 1, 2017, was forecast at 445 million bus, up 10 million, or 2%, from 435 million bus forecast in March and up 126% from 197 million bus in 2016. The U.S.D.A. forecast was slightly below the average trade expectation of 447 million bus.

The increase in carryover was the result of a 9-million-bu increase in seed use more than offset by a 19-million-bu decrease in residual use.

“Seed use is raised in line with the record plantings indicated in the March 31 Prospective Plantings report, and residual use is reduced based on indications from the March 31 Grain Stocks report,” the U.S.D.A. said.

Total soybean supply in 2016-17 was forecast at 4,528 million bus, crushings at 1,940 million bus and exports at 2,025 million bus, all unchanged from March. Use of soybeans for seed was forecast at 104 million bus, up 9 million from March, and residual use was forecast at 14 million bus, down 19 million. The average price of soybeans paid to farmers was forecast at $9.40 to $9.70 a bu, compared with $9.30 to $9.90 a bu in March and $8.95 a bu in 2015-16.

Globally, 2016-17 soybean production was forecast at 345.97 million tonnes, up 5.18 million tonnes from the March forecast and up 32.95 million tonnes, or 11%, from 313.02 million tonnes last year. The increase was in part the result of forecast higher production in Brazil at a record 111 million tonnes, along with increases in Argentina, Paraguay and Mexico. Global soybean ending stocks were forecast at 87.41 million tonnes, up 4.59 million, or 6%, from March and up 10.28 million, or 13%, from 2015-16.

Brazil’s agricultural statistics agency, CONAB, on April 11 raised its forecast of 2016-17 soybean production in Brazil to 110.2 million tonnes. It was the fourth forecast increase from CONAB this year. The current soybean harvest was nearing completion in Brazil.

The carryover of corn on Sept. 1, 2017, was forecast at 2,320 million bus, unchanged from March but up 583 million bus, or 34%, from 1,737 million bus in 2016 as a 50-million-bu reduction in feed and residual use of corn was offset by a like increase in corn used for ethanol. The U.S.D.A. forecast was below the average but within the full range of trade expectations.

“The pace of weekly ethanol production during March as indicated by Energy Information Administration data has been above expectations,” the U.S.D.A. said, noting also that corn used to produce ethanol during the December-February period was record high.

The forecast total supply of corn in 2016-17 was unchanged from March at 16,940 million bus. Feed and residual use of corn was forecast at 5,500 million bus, down 50 million from March. The use of corn to make ethanol was forecast at 5,450 million bus, up 50 million from March. Food, seed and industrial use (excluding ethanol) was unchanged from March at 1,445 million bus, and exports were unchanged at 2,225 million bus. The average price of corn paid to farmers this year was forecast at $3.25 to $3.55 a bu, compared with $3.20 to $3.60 a bu forecast in March and $3.61 a bu last year.

Global corn ending stocks were forecast at 222.98 million tonnes, up 2.3 million from March and up 11.15 million, or 5%, from 2015-16 as higher beginning stocks and production more than offset higher domestic use and exports.
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