May 12, 2015 - The University of Tennessee | Agricultural
Transcription
May 12, 2015 - The University of Tennessee | Agricultural
May 12, 2015 - USDA World Supply and Demand Estimates Corn U.S. feed grain supplies for 2015/16 are projected to slightly exceed the record level of 2014/15 as larger beginning stocks more than offset lower expected production. Corn production is projected at 13.6 billion bushels, down 586 million from the record 2014/15 crop with a lower forecast area and yield. The U.S. corn yield is projected at 166.8 bushels per acre, down 4.2 bushels from the 2014/15 record based on a weather adjusted yield trend that assumes normal summer weather. The 2015 yield outlook is not raised, despite the rapid pace of late-April and early-May planting, as more than 90 percent of the variability in the corn yield is determined by July precipitation and temperatures in the Midwest, which are unknowable at this time. Corn supplies for 2015/16 are projected at a record 15.5 billion bushels, up just slightly from 2014/15. U.S. corn use for 2015/16 is projected at a record 13.8 billion bushels, 1 percent higher than this month’s revised projection for 2014/15. Feed and residual use for 2015/16 is projected 50 million bushels higher with animal numbers up from 2014/15. Corn used to produce ethanol in 2015/16 is expected to be unchanged as projected gasoline consumption during the 2015/16 marketing year is nearly identical to 2014/15. Corn use in other food, seed, and industrial categories in 2015/16 is projected slightly higher than this month’s lower forecast for 2014/15. Exports for 2015/16 are projected 75 million bushels higher on the year with the 2014/15 projection raised 25 million bushels this month. More competitive prices and growth in world demand support gains in U.S. exports for 2015/16, but large foreign supplies limit growth in the U.S. share of global trade. Corn ending stocks for 2015/16 are projected at 1.7 billion bushels, down 105 million from the 2014/15 projection. The season-average 2015/16 farm price is projected at $3.20 to $3.80 per bushel, down 15 cents at the midpoint from this month’s lowered outlook for 2014/15. Forward pricing the 2015 crop have been at substantially lower levels than similar bids offered for the 2014 crop. Global coarse grain supplies for 2015/16 are projected at a record, up from 2014/15 with the increase mainly reflecting larger corn beginning stocks and production for China. Global corn production for 2015/16 is projected at 38.967 billion bushels, down from the 2014/15 record, largely reflecting the smaller projected U.S. crop. Declines in 2015/16 corn production are also expected for EU, Brazil, Ukraine, and Mexico. In addition to China, where corn production is projected up 484 million bushels, corn production is expected higher for South Africa, India, Canada, Russia, and Argentina. Global corn consumption for 2015/16 is projected at a record 38.99 billion bushels, 512 million bushels higher than in 2014/15, with notable increases for China, Brazil, Saudi Arabia, Argentina, Egypt, Canada, India, Indonesia, Iran, and Mexico. Corn imports for 2015/16 are projected higher year-to-year for EU, Saudi Arabia, Egypt, South Korea, and Mexico. Corn exports are lowered for Ukraine, Brazil, and EU, but raised for South Africa, Argentina, and India compared with 2014/15. Global corn ending stocks for 2015/16 are projected at 7.555 billion bushels, down 24 million from 2014/15. Market Reaction: July 2015 corn futures closed up ½ cent at $3.61 with a trading range for the day of $3.57 ¼ to $3.65 ¾. September 2015 corn futures closed up ½ cent at $3.66 with a trading range for the day of $3.62 ½ to $3.70 ½. Acreage and domestic ending stocks are lower for the upcoming marketing year, however foreign production and ending stocks are estimated up. Yield was kept at the initial trend line estimate even with the acknowledgement of the good planting progress this year. Focus will now by on revised acreage and yield estimates, and as always weather. 2013/14 2015/16 USDA Projected May 2008/09 2009/10 2010/11 86.0 86.4 88.2 91.9 97.3 95.4 90.6 89.2 78.6 79.5 81.4 84.0 87.4 87.5 83.1 81.7 153.9 164.7 152.8 147.2 123.1 158.1 171 166.8 Beg. Stocks 1,624 1,673 1,708 1,128 989 821 1,232 1,851 Production 12,092 13,092 12,447 12,360 10,755 13,829 14,216 13,630 14 8 28 29 160 36 25 25 13,729 14,774 14,182 13,517 11,904 14,686 15,472 15,506 Acres Planted (Million Acres) Acres Harvested (Million Acres) U.S. Average Yield (Bu/Acre) 2011/12 2012/13 Supply 2014/15 USDA Estimate Supply (Million Bushels) Imports Total Supply Use (Million Bushels) Feed and Residual 5,182 5,125 4,792 4,557 4,315 5,034 5,250 5,300 Ethanol Food, Seed & Industrial Exports 3,709 4,591 5,021 5,000 4,641 5,134 5,200 5,200 1,316 1,370 1,407 1,428 1,397 1,369 1,347 1,360 1,849 1,980 1,835 1,543 730 1,917 1,825 1,900 Total Use 12,056 13,066 13,054 12,528 11,083 13,454 13,622 13,760 U.S. Ending Stocks 1,673 1,708 1,128 989 821 1,232 1,851 1,746 Foreign Stocks 4,137 4,040 3,919 4,237 4,619 5,581 5,728 5,810 Price and Stocks to Use Ratio U.S. Avg. Season Price ($/Bu) $4.06 $3.55 $5.18 $6.22 $6.89 $4.46 $3.55$3.75 $3.20$3.80 U.S. Stocks/Use 13.88% 13.07% 8.64% 7.89% 7.41% 9.16% 13.59% 12.69% Source: USDA-WASDE May 12, 2015 World Corn Supply and Use (Million Bushels) 2015/16 (May) Country / Region Beginning Stocks Production Imports Domestic Feed Domestic Total Exports Ending Stocks World 7,578 38,968 4,675 24,027 38,990 4,760 7,556 US 1,851 13,630 25 5,300 11,860 1,900 1,746 Foreign 5,728 25,338 4,650 18,727 27,130 2,860 5,810 Argentina 59 984 0 256 394 610 40 Brazil 680 2,953 31 1,968 2,323 866 475 South Africa 62 531 1 217 449 59 87 Egypt 77 236 315 476 571 0 57 EU 315 2,690 472 2,342 3,090 98 289 Japan 22 0 598 421 598 0 22 Mexico 104 925 405 675 1,337 20 78 Southeast Asia 189 1,144 366 1,169 1,488 25 187 South Korea 57 3 394 319 402 0 52 Canada 51 484 59 315 526 20 49 3,148 8,976 118 6,299 8,661 2 3,579 Ukraine 93 1,024 2 354 409 630 79 ROW 871 5,387 1,887 3,915 6,883 529 818 China World Corn Supply and Use (Million Bushels) (2015/16-2014/15) Country / Region Beginning Stocks Production Imports Domestic Feed Domestic Total Exports Ending Stocks World 736 -248 130 516 511 -5 -22 US 619 -585 - 50 63 75 -105 Foreign 117 338 130 466 448 -80 83 4 20 - 16 24 20 -19 Brazil -67 -118 - 79 79 -59 -205 South Africa -22 87 - 12 8 31 24 Egypt -18 2 20 24 24 - -20 EU 46 -210 157 39 39 -20 -26 Japan - - -8 -8 -8 - - Mexico -2 -20 12 14 16 - -26 Southeast Asia 36 45 -28 59 63 -6 -3 South Korea -17 - 16 4 4 - -5 Argentina Canada -12 31 - 20 22 - -2 China 104 485 - 79 157 1 431 Ukraine 4 -96 - - - -79 -14 ROW 60 112 -39 129 20 31 -54 Source: USDA-WASDE May 12, 2015 Cotton The U.S. cotton 2015/16 projections include marginally higher supply and disappearance compared with 2014/15, resulting in ending stocks and prices on par with the preceding year. The increase in beginning stocks of nearly 2.0 million bales is mostly offset by an 11-percent decrease in production, due mainly to reduced planted area. Harvested acres and yields are based on historical averages by region, with adjustments to the Southwest to reflect favorable moisture conditions. Domestic mill use is projected higher while exports are at the prior year’s 10.7 million bales. The marketing year average price received by producers is projected to range from 50 to 70 cents per pound, with the midpoint of 60 cents, unchanged from the current season. World 2015/16 cotton projections show a decline in global stocks for the first time since 2009/10. As with the U.S. estimates, higher beginning stocks compared with last season are about offset by sharply lower world production, as most of the world’s cotton-producing countries respond to lower prices. World consumption is raised 3.5 percent due mainly to positive world economic growth and the lagged effect of falling cotton prices during 2014/15. World trade is reduced marginally, as a sharp drop of 1.7 million bales in China’s imports is mostly offset by increases in other countries. China’s lower production and imports, combined with a consumption increase of nearly 3 percent, are projected to reduce ending stocks by about 3.0 million bales, accounting for more than three-fourths of the decline in world stocks. Despite this reduction, world stocks of 106.3 million bales would still be the second highest on record. For 2014/15, U.S. production is raised marginally, based on lower harvested area and higher yields, reflecting the season final report. Slightly higher world ending stocks incorporate a number of current and historical data adjustments, resulting in increases for Argentina, China, and Benin, partially offset by decreases for India, Malaysia, and Brazil. Market Reaction: July 2015 cotton futures closed down 0.37 cents at 65.02 with a trading range for the day of 64.57 to 65.57. December 2015 cotton futures closed down 0.45 cents at 64.83 with a trading range for the day of 64.18 to 65.45. Estimated decreases in domestic and world production along with increased demand should allow cotton markets to slowly move through the substantial stocks accumulated over the past 5years. Prices will not change overnight but some light may be emerging at the end of the tunnel. Chinese policy will play an important role in how quickly cotton stocks are reduced. Acres Planted (Million Acres) Acres Harvested (Million Acres) U.S. Average Yield (lbs/acre) 2012/13 Supply 2013/14 2014/15 USDA Estimate 2015/16 USDA Projected May 2008/09 2009/10 2010/11 2011/12 9.47 9.15 10.97 14.74 12.26 10.41 11.04 9.55 7.57 7.53 10.7 9.46 9.32 7.54 9.35 8.6 813 777 812 790 892 821 838 809 Supply (Million Bales) Beg. Stocks 10.05 6.34 2.95 2.6 3.35 3.8 2.45 4.4 Production 12.82 12.19 18.1 15.57 17.31 12.91 16.32 14.5 0 0 0.01 0.02 0.01 0.01 0.01 0.01 22.87 18.53 21.06 18.19 20.67 16.72 18.78 18.91 3.65 3.8 Imports Total Supply Use (Million Bales) Domestic 3.59 3.46 3.9 3.3 3.5 3.55 Exports 13.26 12.04 14.38 11.71 13.03 10.53 10.7 10.7 Total Use U.S. Ending Stocks Foreign Stocks 16.85 15.5 18.28 15.01 16.53 14.08 14.35 14.5 6.34 2.95 2.6 3.35 3.8 2.45 4.4 4.4 54.47 43.71 46.84 69.97 86.17 99.21 105.85 101.89 Chinese Stocks 22.37 15.25 10.6 31.08 50.36 62.71 65.33 62.28 Price and Stocks to Use Ratio U.S. Avg. Season Price ($/lb) U.S. Stocks/Use Chinese Stocks/Use $0.48 $0.63 $0.82 $0.88 $0.725 $0.779 $0.60 $0.50$0.70 37.63% 19.03% 14.22% 22.32% 22.99% 17.40% 30.66% 30.34% 50.84% 30.50% 23.04% 81.79% 139.89% 181.77% 186.66% 173.00% Source: USDA-WASDE May 12, 2015 World Cotton Supply and Use (Million 480 lb Bales) 2015/16 (May) Country / Region World US Foreign Central Asia Afr. Fr. Zone Australia Brazil India Mexico China EU Turkey Pakistan Indonesia Thailand Bangladesh Vietnam ROW Beginning Stocks Production Imports 110.25 111.25 33.65 4.4 14.5 0.01 105.85 96.75 33.64 2.85 6.11 0 1.94 4.47 0 1.27 2 0 6.97 6.75 0.15 14.32 29.5 0.9 0.74 1.05 1 65.33 27 6 0.67 1.46 0.85 1.63 2.8 3.6 2.55 10 1.7 0.66 0.02 3.5 0.21 0 1.53 1.18 0.13 4.6 0.75 0 4.2 4.78 5.46 5.61 Domestic Use 115.29 3.8 111.49 2.56 0.14 0.04 4 25.75 1.9 36 0.88 6.3 11.1 3.4 1.5 4.7 4.1 Exports 33.66 10.7 22.96 3.6 4.42 2 3.6 5 0.15 0.05 1.43 0.23 0.5 0.01 0 0 0 Loss -0.1 0.01 -0.11 0 0 -0.1 -0.15 0 0.03 0 0.03 0 0.03 0 0.03 0.01 0 Ending Stocks 106.29 4.4 101.89 2.81 1.85 1.34 6.42 13.97 0.72 62.28 0.64 1.5 2.63 0.78 0.21 1.2 0.86 9.12 1.97 0.01 4.68 World Cotton Supply and Use (Million 480 lb Bales) (2015/16-2014/15) Country / Region World US Foreign Central Asia Afr. Fr. Zone Australia Brazil India Mexico China EU Turkey Pakistan Indonesia Thailand Bangladesh Vietnam ROW Beginning Stocks Production Imports Domestic Use Exports Loss Ending Stocks 7.82 1.95 5.87 0.16 0.56 -0.54 -0.7 2.7 0.16 2.62 0.14 0.27 0.07 0.06 -0.01 0.16 0.25 -0.03 -8.03 -1.82 -6.21 -0.05 -0.35 -0.2 -0.25 -0.5 -0.32 -3 -0.17 -0.4 -0.6 0.01 -0.01 -0.37 -0.09 -0.09 0.1 -0.2 0.17 -1.7 -0.02 0.05 0.9 0.15 0.05 0.1 0.1 0.21 3.84 0.15 3.69 0.15 0 0 0.1 1.25 0.05 1 0.01 0.1 0.35 0.1 0.05 0.25 0.25 0.03 -0.15 -0.15 0.01 0.3 -0.8 -0.4 1.1 -0.01 -0.03 -0.02 -0.05 -0.05 -0.01 -0.19 -0.02 -0.02 - -3.96 -3.96 -0.04 -0.09 0.07 -0.55 -0.35 -0.02 -3.05 -0.03 -0.13 0.08 0.12 0.02 0.11 -0.1 Source: USDA-WASDE May 12, 2015 Soybeans U.S. oilseed production for 2015/16 is projected down 2.6 percent from 2014/15 mainly on lower soybean production. Soybean production is projected at 3,850 million bushels, down 119 million from the 2014 crop with record harvested area more than offset by lower yields. Harvested area is projected at 83.7 million acres based on a 5-year average harvested-to-planted ratio and planted area of 84.6 million acres. The soybean yield is projected at a trend level of 46.0 bushels per acre, down 1.8 bushels from last year’s record. Supplies are projected at 4,230 million bushels, up 3.4 percent from 2014/15 with increased beginning stocks more than offsetting lower production. The U.S. soybean crush for 2015/16 is projected at 1.825 billion bushels, up 20 million from 2014/15. U.S. soybean meal use is projected to increase 3.2 percent in line with expected gains in U.S. meat production. Despite lower prices, soybean meal exports are projected to decline with increased exports from South America and India accounting for most of the gains in global soybean meal trade. Soybean exports are projected at 1,775 million bushels, down 25 million from 2014/15 despite record supplies. Competition from record supplies in South America is expected to limit U.S. exports during the first half of the 2015/16 marketing year. With larger supplies and lower use, U.S. ending stocks for 2015/16 are projected at 500 million bushels, up 150 million from 2014/15. The U.S. season-average soybean price for 2015/16 will decline to $8.25 to $9.75 per bushel compared with $10.05 in 2014/15. Soybean meal prices are forecast at $305 to $345 per short ton compared with $365 in 2014/15. Soybean oil prices are forecast at 29.5 to 32.5 cents per pound compared with 32.0 cents in 2014/15. Global oilseed production for 2015/16 is projected slightly below 2014/15. Global soybean production is projected at 11.659 billion bushels, almost unchanged from 2014/15 with gains for Brazil, India, Paraguay, and Ukraine offset by reductions for the United States, Argentina, and China. The Argentina soybean crop is projected at 2.094 billion bushels, down 55 million from 2014/15 with higher area but lower yields. The Brazil soybean crop is projected at a record 3.564 billion bushels, up 92 million on higher area. China soybean production is projected at 423 million bushels, down 31 million as producers shift to more profitable crops. Total oilseed supplies are up 2.8 percent from 2014/15. With crush projected to increase 2.3 percent, global oilseed ending stocks up from the revised 2014/15 stock estimate. Global protein meal consumption is projected to increase 3.4 percent in 2015/16. Protein meal consumption is projected to increase 3.0 percent in China, accounting for 24 percent of global protein consumption gains. Global soybean exports are projected at 4.483 billion bushels, up 3.8 percent from 2014/15. China soybean imports are projected at 2.848 billion bushels, up 147 million from the revised 2014/15 projection. Global vegetable oil consumption is projected to increase 3.6 percent in 2015/16 led by increases for China, India, and Indonesia. Futures Market Reaction: July 2015 soybean futures closed down 18 ½ cents at $9.55 ½ with a trading range for the day of $9.55 to $9.81 ½. November 2015 soybean futures closed down 18 ¾ cents at $9.30 ¾ with a trading range for the day of $9.30 ½ to $9.55 ½. Shortly after the report release harvest soybean futures dropped over 15 cents. Increased domestic acreage, foreign soybean production, and greater domestic and global beginning stocks for the 2015/16 marketing contributed to the bearish report response. Global and domestic demand are projected to increase, which is positive, however due to the strength of the US dollar much of this demand may be filled by South America. Acres Planted (Million Acres) Acres Harvested (Million Acres) U.S. Average Yield (Bu/Acre) 2012/13 Supply 2013/14 2014/15 USDA Estimate 2015/16 USDA Projected May 2008/09 2009/10 2010/11 2011/12 75.7 77.5 77.4 75.0 77.2 76.8 83.7 84.6 74.7 76.4 76.6 73.8 76.1 76.3 83.1 83.7 39.7 44.0 43.5 41.9 40.0 44.0 47.8 46 Supply (Million Bushels) Beg. Stocks 205 138 151 215 169 141 92 350 Production 2,967 3,359 3,329 3,094 3,042 3,358 3,969 3,850 13 15 14 16 41 72 30 30 Total Supply 3,185 3,512 3,495 3,325 3,252 3,570 4,091 4,230 Crushing 1,662 1,752 1,648 1,703 1,689 1,734 1,805 1,825 Exports 1,279 1,499 1,501 1,365 1,317 1,647 1,800 1,775 106 110 130 88 105 97 136 130 3,047 3,361 3,280 3,155 3,111 3,478 3,741 3,729 138 151 215 169 141 92 350 500 1,440 2,082 2,361 1,797 1,948 2,330 2,794 3,035 Imports Use (Million Bushels) Seed and Residual Total Use U.S. Ending Stocks Foreign Stocks Price and Stocks to Use Ratio U.S. Average Season Price ($/Bu) $9.97 $9.59 $11.30 $12.50 $14.40 $13.00 $10.05 $8.25-$9.75 U.S. Stocks/Use 4.53% 4.49% 6.55% 5.36% 4.53% 2.65% 9.36% 13.41% Source: USDA-WASDE May 12, 2015 World Soybean Supply and Use (Million Bushels) 2015/16 (May) Country / Region Beginning Stocks Production Imports Domestic Crush Domestic Total Exports Ending Stocks 3,143 11,659 4,396 9,782 11,180 4,482 3,535 349 3,850 30 1,825 1,954 1,775 500 Foreign 2,794 7,809 4,366 7,957 9,226 2,707 3,035 Argentina 1,174 2,094 0 1,562 1,749 312 1,207 916 3,564 20 1,415 1,533 1,828 1,139 3 323 0 151 154 169 4 China 528 423 2,848 2,833 3,279 9 510 EU 10 70 470 503 534 4 12 Japan 10 8 105 72 112 0 10 Mexico 7 13 149 160 161 0 7 146 1,313 773 1,261 1,703 385 146 World US Brazil Paraguay ROW World Soybean Supply and Use (Million Bushels) (2015/16-2014/15) Country / Region Beginning Stocks Production Imports Domestic Crush Domestic Total Exports Ending Stocks World 814 2 201 431 460 165 392 US 258 -119 - 20 13 -25 151 Foreign 556 121 201 412 447 190 242 Argentina 217 -55 - 107 110 18 33 Brazil 309 92 9 33 36 151 223 Paraguay - 11 - 18 18 -7 - China -2 -31 147 119 130 2 -18 EU - 8 2 6 6 1 3 Japan 1 - - - - - 1 Mexico 2 - 2 4 4 - 1 ROW 29 97 42 125 142 25 - Source: USDA-WASDE May 12, 2015 Wheat U.S. wheat supplies for 2015/16 are projected up 6 percent from 2014/15 on higher beginning stocks and production. All wheat production is projected at 2,087 million bushels, up 3 percent. The all wheat yield is projected at 43.5 bushels per acre, down slightly from the previous year. The survey-based forecast for 2015/16 all winter wheat production is up 7 percent with both higher yields and harvested area. A decline in Soft Red Winter wheat harvested area is more than offset by increased Hard Red Winter (HRW) wheat harvested area. This year’s HRW yield is above last year’s low level, but drought and winterkill have adversely affected the crop again. White Winter wheat production is projected up 10 percent from last year mainly on higher yields. Spring wheat production for 2015/16 is projected to decline 5 percent on an assumed return to trend yields from last year’s near record level, more than offsetting a slight increase in harvested area. Total U.S. wheat use for 2015/16 is projected up 4 percent from the previous year on higher exports, feed and residual use, and food use. The 2015/16 exports are projected at 925 million bushels, up 65 million bushels from the previous year’s low level but still below the 5 yearaverage. Large supplies in several major competing countries will continue to limit U.S. exports. Feed and residual use is projected up 20 million bushels on increased supplies. U.S. ending stocks are projected to rise 84 million bushels to 793 million, the highest since the 2010/11 crop year. The all wheat season-average farm price is projected at $4.50 to $5.50 per bushel. Global wheat supplies are projected to rise fractionally from 2014/15 as increased beginning stocks more than offset a slight decline in production from the previous year’s record. Total wheat production is projected at 26.415 billion bushels, the second highest total on record. Foreign production is down 338 million bushels with reductions for EU, India, Russia, and Ukraine more than offsetting increases for China, Turkey, Morocco, Australia, Iran, and Syria. Global wheat consumption for 2015/16 is projected slightly higher than in 2014/15 with higher food use more than offsetting a reduction in world wheat feeding. Global import demand for 2015/16 is lower with the largest reductions coming from Turkey, Iran, Morocco, and Syria all on greatly improved crop prospects. Exports are lower for Canada, India, EU, Russia, and Ukraine, but higher for Argentina and Australia. Global ending stocks for 2014/15 are projected at 7.47 billion bushels, up 88 million from 2014/15. Futures Market Reaction: July 2015 wheat futures closed down ½ cents at $4.80 ½ with a trading range for the day of $4.78 to $4.91. September 2015 wheat futures closed at $4.87 ½ down ½ cent with a trading range for the day of $4.85 ¼ to $4.97 ¼. The relative strength of the US dollar continues to provide challenges for US wheat exports as prices in other key export regions are substantially lower. Acres Planted (Million Acres) Acres Harvested (Million Acres) U.S. Average Yield (Bu/Acre) 2011/12 2012/13 Supply 2013/14 2014/15 USDA Estimate 2015/16 USDA Projected May 2008/09 2009/10 2010/11 63.2 59.2 53.6 54.4 55.3 56.2 56.8 55.4 55.7 49.9 47.6 45.7 48.8 45.3 46.4 48 44.9 44.5 46.3 43.7 46.2 47.1 43.7 43.5 Supply (Million Bushels) Beg. Stocks 306 657 976 862 743 718 590 709 Production 2,499 2,218 2,207 1,999 2,252 2,135 2,026 2,087 127 119 97 112 123 169 150 140 2,932 2,993 3,279 2,974 3,118 3,021 2,766 2,937 Food 927 919 926 941 951 955 960 967 Seed 78 69 71 76 73 77 77 72 Feed 255 150 132 162 364 223 160 180 Exports 1,015 879 1,289 1,051 1,012 1,176 860 925 Total Use 2,275 2,018 2,417 2,231 2,400 2,431 2,057 2,144 Imports Total Supply U.S. Ending Stocks Foreign Stocks 657 976 862 743 718 590 709 793 5,482 6,427 6,446 6,567 5,735 6,182 6,675 6,678 Price and Stocks to Use Ratio U.S. Avg. Season Price ($/Bu) $6.78 $4.87 $5.70 $7.24 $7.77 $6.87 $6.00 $4.50$5.50 U.S. Stocks/Use 28.88% 48.36% 35.66% 33.30% 29.92% 24.27% 34.47% 36.99% Source: USDA-WASDE May 12, 2015 World Wheat Supply and Use (Million Bushels) 2015/16 (May) Country / Region Beginning Stocks Production Imports Domestic Feed Domestic Total Exports Ending Stocks 7,384 26,416 5,644 4,999 26,330 5,767 7,471 710 2,087 140 180 1,219 925 793 6,675 24,329 5,504 4,819 25,111 4,842 6,678 Argentina 117 441 1 4 226 265 68 Australia 226 955 6 143 269 680 237 Canada 195 1,066 17 165 356 753 168 EU 541 5,522 184 2,003 4,538 1,194 515 World US Foreign Brazil 44 239 239 22 426 37 58 China 2,313 4,777 44 735 4,464 37 2,632 Sel. Mideast 520 657 773 167 1,360 30 561 N. Africa 435 732 886 98 1,614 20 419 Pakistan 118 919 4 37 904 37 100 Southeast Asia 128 0 683 123 648 33 132 India 606 3,307 18 176 3,476 18 437 Russia 280 1,966 13 459 1,304 735 219 Kazakhstan 102 459 15 73 250 220 106 Ukraine 183 808 2 129 430 386 177 ROW 868 2,481 2,620 485 4,845 397 849 World Wheat Supply and Use (Million Bushels) (2015/16-2014/15) Country / Region Beginning Stocks Production Imports Domestic Feed Domestic Total Exports Ending Stocks World 404 -276 -234 -195 42 -248 86 US 119 62 -10 20 22 65 83 Foreign 285 -338 -224 -215 19 -313 3 Argentina 25 -18 - -7 -7 62 -49 Australia -2 73 - 4 5 55 12 Canada -186 -11 -1 -55 -60 -110 -27 EU 171 -226 -29 - 15 -73 -26 Brazil -26 18 4 11 11 -29 15 China 98 141 -11 -110 -92 - 320 Sel. Mideast 79 17 -66 -18 16 -26 41 N. Africa -62 111 -20 15 45 - -17 Pakistan 39 -18 -24 - 4 11 -18 Southeast Asia 1 - -4 -17 -5 - 3 India -49 -215 17 11 28 -107 -169 Russia 89 -205 - -18 - -55 -61 Kazakhstan 29 -18 -7 - - - 4 Ukraine 48 -101 - -18 -11 -37 -6 ROW 29 115 -82 -11 71 -4 -19 Source: USDA-WASDE May 12, 2015 2015 Estimated Returns – Non-irrigated The profitability outlook has been updated after the release of the May 12, 2015 USDA WASDE reports. This May report is the first real glimpse of USDA’s projection for the 2015-16 marketing year. Future reports will be adjusted from today based more on crop conditions and estimated planted acreage. The profitability outlook continues to look dim as prices are lower in the last month. I would like to point out the cotton price of 70 cents that is being used in the profitability outlook. I would guess that there has been very little cotton priced for 2015. The price of 70 cents is made up of a cash price of 62 – 63 cents and gin rebates (seed & hauling) of 7-8 cents. The cash price of 62-63 cents is composed of a loan rate of 52 cents or 53 cents with a slight premium and a 10 cent equity from the buyer. This 70 cent price has been used for the last few months even while cotton prices have changed up and down. Basically, this is a result of the way the cotton marketing loan program works. As long as cotton prices stay in a roughly 63-70 cent December futures range, cotton equities most likely will stay in that 10 cent range. My observations and discussions with cotton buyers would indicate that if futures move above 70-71 cents, then the prices to the producers would start to move up penny for penny. At this point of the season in Tennessee, crop selection will depend more on planting conditions as affected by the weather more so than projected profitability. It should be noted the grain sorghum profitability projections. Grain sorghum due to the positive basis at many elevators is projecting to be the crop with the least loss as well as the lowest cost to produce. Producers considering grain sorghum should discuss with their grain elevator the possibilities of delivery in the fall and get some assurances that it will be deliverable coming out of the field (if on farm storage is not available). Producers might also want to consider locking in at least the basis on grain sorghum. Producers should look at these returns as what could be if no adjustments are made in their operation and consider it a warning sign that adjustments will need to be made in 2015 to be sustainable. These estimates do not consider any USDA or crop insurance payments from the new farm bill. Please contact your local County Extension office or Area Specialist – Farm Management for assistance in developing your own budget or farm financial plan. This table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems. Cotton prices include revenue for cottonseed and hauling. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton - $ 120, Soybeans - $43, Corn - $161 (includes 170 units of N), Milo - $103, and Wheat/Soybeans - $117. Cost of production will continue to be adjusted as information becomes available. Weed control costs with resistant weeds have also been difficult to estimate. These costs will vary greatly among producers and individual fields. Production costs are estimates based on the 2015 University of Tennessee Crop Budgets with adjustments made where needed. Please visit with your farm supplier on estimated cost in your area. Producers with owned land and or cash rent can use Returns Over Variable as a guide in decision making. Producers with share rent ground should use Returns Over Variable and Land Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue minus 25% of crop insurance cost is used in the table as a guide or method of comparison and should not be construed as the appropriate rent for a particular area. Producers who are not making major equipment changes can use UT budgets and this table as a guide in developing their own cropping decision budgets. If equipment changes are being made, then a whole farm financial plan would be better suited as a decision aid. 2015 Estimated Returns – Non-irrigated Cotton Soybeans Corn Milo Wheat/Soybeans Yield 864 lbs. 42 bu. 132 bu. 85 bu. 64 bu./30 bu. Price (as of 5/12/15) $0.70 lb. Revenue $605 $390 $475 $343 Variable Expenses $459 $285 $412 $234 $448 Returns Over Variable $146 $105 $63 $109 $143 Land Costs (25% of Revenue-25% crop insurance) $149 $95 $115 $85 $144 Returns Over Variable and Land Costs -$3 $10 -$52 $24` -$1 Fixed Costs Depreciation & interest on machinery $142 $76 $73 $69 $107 Returns Over Specified Costs -$145 -$66 -$125 -$45 -$108 Breakeven Price at Average Yield and Specified Cost $0.87 $10.85 $4.55 $4.57 $6.09/$10.36 $9.28 bu. $3.60 bu. $4.04 bu. $4.88 bu./$9.28 bu. $591 Estimated Returns - Irrigated As with dryland production, lower prices have squeezed profit margins in the irrigated crops creating negative margins for all crops considering variable, land and fixed cost. Producers should look at these returns as what could be if no adjustments are made in their operation and consider it a warning sign that adjustments will need to be made in 2015 to be sustainable. The table below is an estimate of returns for crops under irrigation. Since irrigated yields are not as of yet kept separate in Tennessee, yields below are an estimate of irrigated yields. Irrigation fixed costs and energy costs will vary greatly among producers and systems. These projections include in variable expenses energy costs for irrigation of $21 per acre and $11 per acre of irrigation repairs and maintenance. Fixed costs of $88 per acre for irrigation equipment are used. Please contact your local County Extension office or Area Specialist – Farm Management for assistance in developing your own budget or farm financial plan. This table below should be used as a guide as yields, prices, and expenses will vary among producers and locations. Expenses will vary among producers and production systems. Cotton prices include revenue for cottonseed and hauling. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton - $ 125, Soybeans - $43, Corn - $206 (includes 225 units of N), Milo - $135, and Wheat/Soybeans - $117. Cost of production will continue to be adjusted as information becomes available. Weed control costs with resistant weeds have also been difficult to estimate. These costs will vary greatly among producers and individual fields. Production costs are estimates based on the 2015 University of Tennessee Crop Budgets with adjustments made where needed. Please visit with your farm supplier on estimated cost in your area. Producers with owned land and or cash rent can use Returns Over Variable and Fixed IR Costs as a guide in decision making. Producers with share rent ground should use Returns Over Variable, Fixed IR Costs and Land Costs as a guide with their appropriate share rent calculated. A land cost of 25% of revenue minus 25% of crop insurance cost minus 25% of the irrigation equipment fixed cost is used in the table as a guide or method of comparison and should not be construed as the appropriate rent for a particular area. A management cost of $30 per acre is included in Fixed Costs – management labor, depreciation & interest on machinery. This is an additional $15 above the dryland crop management labor. Producers who are not making major equipment changes can use UT budgets and this table as a guide in developing their own cropping decision budgets. If equipment changes are being made, then a whole farm financial plan would be better suited as a decision aid. 2015 Estimated Returns - Irrigation Cotton Soybeans Corn Milo Wheat/Soybeans Yield 1100 lbs. 60 bu. 190 bu. 130 bu. 64 bu./45 bu. Price (as of 5/12/15) $0.70 lb. Revenue $770 $557 $684 $525 $730 Variable Expenses( include energy cost) $502 $317 $504 $300 $481 Fixed Irrigation Costs per Acre $88 $88 $88 $88 $88 Returns Over Variable & Fixed IR Costs $180 $152 $92 $137 $161 Land Costs (25% of Revenue-25% crop insurance-25% fixed irrigation costs) $168 $115 $146 $108 $156 Returns Over Variable, IR Fixed Cost and Land Costs $12 $37 -$53 $29 $5 Fixed Costs- management labor, depreciation & interest on machinery $151 $91 $86 $84 $122 Returns Over Specified Costs -$139 -$54 -$139 -$55 -$117 Breakeven Price at Average Yield and Specified Cost $0.83 $10.18 $4.33 $4.46 $6.09/$10.36 $9.28 bu. $3.60 bu. $4.04 bu. $4.88 bu./$9.28 bu.