WASDE REPORT FOR 12/10/19

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This service mission is to make producers and end users self-directed, and not need information provided by any service. All of my subscribers were seeking to hedge in a better way than all the services they had in the past were providing. When I bought my membership/seat in 1976, nobody would help or educate me to what works for them, and what does not. I learned from the losers what does not work by listening to what they said and how they traded. They taught me what NOT to do. You, like my subscribers, have already learned what not to do, now you want to learn what works well for you, no matter up, down, or sideways market.

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COARSE GRAINS: This months 2019/20 U.S. corn supply and use outlook is unchanged from last month. The projected season-average farm price is unchanged at $3.85 per bushel.

Global coarse grain production for 2019/20 is forecast 6.8 million tons higher to 1,401.7 million. The 2019/20 foreign coarse grain outlook is for larger production, increased consumption, and higher stocks relative to last month. Foreign corn production is forecast higher with increases for China and Bolivia more than offsetting a reduction for Canada.

Chinas corn production is raised, reflecting increases to both area and yield, based on the latest data from the National Bureau of Statistics. Canadas corn production is lowered, as an increase in harvested area is more than offset by a reduction in yield.

Corn exports are lowered for Canada, Laos, and Mexico. Foreign corn ending stocks are raised from last month, largely reflecting increases for China, Bolivia, and Taiwan that more than offset declines for Canada, Colombia, and Paraguay. Global corn stocks, at 300.6 million tons, are up 4.6 million from last month.

WHEAT: The outlook for 2019/20 U.S. wheat is for decreased supplies, higher exports, and lower ending stocks. Wheat imports are lowered 15 million bushels to 105 million on a slower than expected pace to date; Hard Red Spring (HRS) is down 5 million bushels and Durum is lowered 10 million. If realized, these would be the lowest imports in nine years. U.S. wheat exports are raised 25 million bushels to 975 million on a strong pace to date, more competitive prices, and reduced supplies from several major competitors. Hard Red Winter and Durum exports are each raised 10 million bushels, and HRS is raised 5 million. With reduced supplies and higher use, 2019/20 ending stocks are cut 40 million bushels to 974 million, the lowest in 5 years. Despite the tightening stocks, the season-average farm price is lowered $0.05 per bushel to $4.55 based on NASS prices to date and expectations of cash and futures prices for the remainder of the market year.

The global outlook for wheat this month is for several mostly offsetting production changes, slightly lower global use and trade, and increased ending stocks. The Argentina and Australia wheat crops are cut 1.0 million tons and 1.1 million tons, respectively, both on continued drought conditions. The Argentina crop is now pegged at 19.0 million tons and Australias crop is estimated to be 16.1 million tons. This is Australias smallest crop since 2007/08. Canadas crop is cut 0.7 million tons to 32.4 million on updated government data. Partly offsetting is a 1.6-million-ton production increase for China to 133.6 million on updated National Bureau of Statistics data. The EU and Russia crops are each raised 0.5 million tons reflecting updated harvest data.

Projected 2019/20 global exports are reduced 0.9 million tons as reductions for Argentina, Australia, and Canada are partly offset by increases for Russia and the U.S. The U.S. has become more price competitive in some international markets, and increased sales are expected to continue in the second half of the market year from reduced competition. With global use down 1.4 million tons, world ending stocks are raised 1.2 million tons to a record 289.5 million tons. Chinas 2019/20 ending stocks are raised 1.8 million tons to 147.5 million and account for 51 percent of the global total.

RICE: The outlook for 2019/20 U.S. rice this month is for unchanged supplies, higher exports, and reduced ending stocks. All rice exports are raised 2.5 million cwt to 97.5 million on export sales and shipment pace to date and on expectations for continued improved competitiveness of U.S. long-grain exports in Western Hemisphere markets. Long-grain exports are increased 3.0 million cwt to 69.0 million, the highest since 2016/17. Conversely, combined medium- and short-grain exports are lowered 0.5 million cwt to 28.5 million on reduced exports outside of Northeast Asian markets. Projected 2019/20 all rice ending stocks are lowered 2.5 million cwt to 33.9 million, down 24 percent from last year. The projected 2019/20 all rice season-average farm price is unchanged at $13.00 per cwt, compared to $12.30 for 2018/19.

Global 2019/20 rice supplies are raised by 0.6 million tons to 671.6 million, mainly on higher production for China as its output is raised by 0.7 million tons to 146.7 million on updated production data from Chinas National Bureau of Statistics. World 2019/20 consumption is lowered by 0.2 million tons to 493.8 million. Global 2019/20 trade is decreased fractionally to 45.7 million tons, as reduced exports by India and Thailand are not completely offset by higher exports from Vietnam and Burma. Projected global ending stocks are up 0.8 million tons this month to a record-large 177.8 million with China accounting for 66 percent of the total.

OILSEEDS: Total U.S. oilseed production for 2019/20 is forecast at 107.6 million tons, down slightly due to a decrease for cottonseed. Soybean supply and use projections for 2019/20 are unchanged from last month. The U.S. season-average soybean price for 2019/20 is forecast at $8.85 per bushel, down 15 cents. The soybean meal price forecast is reduced $15.00 to $310.00 per short ton. The soybean oil price forecast is unchanged at 31.0 cents per pound.

Global 2019/20 oilseed production is forecast up 3.3 million tons to 574.6 million, with greater soybean, sunflowerseed, and peanut production partly offset with lower rapeseed and cottonseed forecasts. Chinas soybean production is projected up 1.0 million tons to 18.1 million reflecting higher area and yield reported by the National Bureau of Statistics. Sunflowerseed production is forecast higher for Russia and Ukraine. Sunflower yields for both Ukraine and Russia established new record highs based on a continuing strong upward yield trend, seasonably cool temperatures, and timely mid-summer rainfall. Other changes include increased peanut production for India, lower rapeseed production for Canada, higher cottonseed production for Brazil, and lower cottonseed production for Pakistan.

Global 2019/20 soybean exports are reduced 0.6 million tons to 149.0 million on a lower forecast for Argentina. Soybean imports are reduced for Vietnam, offset by higher soybean meal imports. Global soybean stocks are forecast higher this month on increases for China and Brazil.

SUGAR: Beet sugar production for 2019/20 is projected at 4.367 million short tons, raw value (STRV), a reduction of 220,625 from last month. Yield and area harvested forecasts from last months NASS Crop Production report are adjusted down on processors updated forecasts in the latest Sweetener Market Data. Beet pile shrink is forecast at a relatively low 4 percent due to the shortened slice campaign. Sucrose recovery is unchanged from last month. Cane sugar production for 2019/20 is reduced by 110,760 STRV with reductions in Florida and Texas based on downward revisions made by processors. Louisiana production is reduced 82,055 STRV to 1.712 million based on lower sugarcane production reported by NASS and lower sucrose recovery forecast by processors. Minor adjustments to forecasted TRQ imports are made based on a small increase in the raw sugar TRQ shortfall, partially offset by an increase in FTA imports. Sugar imports from Mexico are increased by 708,875 STRV to 1.827 million. With no changes made to use, ending stocks are forecast at 1.655 million STRV for a stocks-to-use ratio of 13.50 percent.

Mexico exports to the United States are projected to increase 606,680 metric tons, actual weight (MT) to 1.563 million on projected U.S. Needs implied in the U.S. sugar supply and use for 2019/20 in this December 2019 WASDE. Exports to other destinations are projected at 40,043 MT. According to estimates from CONADESUCA, Mexico has exported 30,043 MT of this amount through November 30.

LIVESTOCK, POULTRY, AND DAIRY: The forecast for 2019 total red meat and poultry production is raised from last month on the current pace of beef, pork, and broiler production. Egg production is raised on higher table and hatching egg production.

For 2020, the total red meat and poultry forecast is increased from last month as higher broiler production more than offsets a lower beef production forecast. Recent hatchery data, lower feed costs, and expected gains in exports will likely support a more rapid pace of expansion during the year. Beef production is reduced on slightly slower pace of both fed and nonfed cattle slaughter in the first half of the year. The pork and turkey production forecasts are unchanged. USDA will publish the Quarterly Hogs and Pigs report on December 23 which will provide an indication of producer farrowing plans for first-half 2020. The 2020 egg production forecast is raised from the previous month.

Beef imports for 2019 and 2020 are raised from last month on trade data to date and expectations that demand for processing-grade beef will remain strong. Exports for 2020 are lowered to reflect a slightly weaker pace of sales; the forecast for 2020 is unchanged. Pork export forecasts for 2019 and 2020 are lowered to reflect slower-than-previously expected growth in exports to several markets although the recent trade agreement with Japan is expected to mitigate the decline in total exports. The 2019 broiler export forecast is unchanged from last month, but turkey exports are increased slightly. Broiler and turkey export forecasts for 2020 are increased on the recent announcement by China that it is reopening its market to U.S. poultry meat.

The cattle price forecast is raised for fourth-quarter 2019 based on recent data and the strength is expected to carry into 2020. The 2019 and 2020 hog price forecasts are reduced on current price weakness. The 2019 broiler price forecast is unchanged from last month, but increased production in 2020 is expected to pressure prices. The 2019 turkey price is raised, but the 2020 price forecast is unchanged. The egg price forecasts for 2019 and 2020 are increased on recent price strength.

The milk production forecasts for 2019 and 2020 are unchanged from the previous month. The 2019 and 2020 fat basis import forecasts are lowered largely on lower expected imports of butterfat products. The fat basis export forecast for 2019 is unchanged, but 2020 is raised on higher exports of butterfat products. Skim-solids basis import forecasts for 2019 and 2020 are unchanged. Skim-solids basis exports are raised on larger shipments of nonfat dry milk/skim milk powder.

Cheese and butter price forecasts for 2019 are lowered, but the nonfat dry milk (NDM) price is raised. The whey price is unchanged. For 2020, the butter price is reduced on continued demand softness, but cheese prices are forecast slightly higher on stronger demand. NDM and whey prices are raised, supported by higher expected export demand. The 2019 Class III price forecasts is lowered on the weaker cheese price; the Class IV price is unchanged from last month as the lower butter price is offset by a higher NDM price. The 2020 forecast of both Class III and Class IV are raised on gains in most product prices with the exception of butter. The 2019 all milk price forecast is unchanged at $18.60 per cwt; the 2020 all milk price is raised to $19.40 per cwt.

COTTON: This months outlook for U.S. cotton in 2019/20 includes lower production and ending stocks compared with last month. Production is lowered 611,000 bales mainly due to a 500,000-bale decline in Texas. Domestic mill use and exports are unchanged. Ending stocks are 600,000 bales lower this month, at 5.5 million. Upland cottons season-average farm price is also unchanged at 61 cents per pound.

The global 2019/20 cotton forecasts include lower beginning stocks and production, largely offset by lower consumption. A nearly 900,000-bale decline this month in beginning stocks is led by a 700,000-bale reduction in India, following a report by Indias Cotton Advisory Board that lowered Indias 2018/19 cotton crop by a similar amount. World cotton production in 2019/20 is projected at 121.1 million bales, down 830,000 from November, and 3.0 million higher than in 2018/19. Production changes for 2019/20 this month other than the United States include decreases of 800,000 bales for Pakistan, 500,000 for India, and smaller declines for Australia, Turkey, and Chad. Partly offsetting are a 900,000-bale increase in Brazils projected crop, a 500,000-bale increase for Uzbekistan, and several smaller gains. A 1.2-million-bale decline this month in projected world consumption is led by a 1.0-million-bale reduction for China, due in part to lower textile exports. The consumption forecasts for Vietnam and Pakistan were also reduced, offsetting a small increase for Uzbekistan.

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