Summary of July WASDE Report

USDA World Agricultural Supply & Demand Estimates - Released on July 10th

Increased Beef Production & Lower Cattle Prices Forecast

LIVESTOCK & POULTRY: The forecast for 2020 red meat and poultry production is raised from last month. The beef production forecast is raised primarily on higher cattle slaughter and heavier carcass weights. USDA will release the Cattle report on July 24, providing a mid-year estimate of U.S. cattle inventory as well as producer intentions regarding retention of heifers for beef cow replacement. Forecast pork production is raised from last month largely on higher expected second-half commercial hog slaughter. Broiler production is raised on recent hatchery data while turkey production is lowered on recent production and hatchery data.
For 2021, the red meat and poultry production forecast is raised as higher expected beef, pork, and broiler production more than offsets lower forecast turkey production. Forecast beef production is raised from the previous month as higher expected placements in late 2020 and early 2021 will result in higher marketings. The pork production forecast is raised as the sector continues to adjust to the effects of COVID-19. Broiler production is raised from last month while turkey and egg production forecasts are reduced.
The beef import forecast is raised for 2020, but the export forecast is lowered from the previous month on recent trade data. The 2021 beef trade forecasts are unchanged from last month. Pork export forecasts for 2020 and 2021 are raised from last month as international demand is expected to remain robust. The 2020 broiler export forecast is reduced on recent trade data, but no change is made to the 2021 forecast. Turkey export forecasts are lowered for 2020 and 2021 on weak import demand from key trading partners.
Cattle price forecasts for 2020 are lowered from last month on prices to date and continued large supplies of fed cattle. Forecast 2021 cattle prices are unchanged. The 2020 hog price forecast is reduced on current price weakness and supply pressure. The 2021 hog price forecast is also reduced on higher hog supplies. Broiler prices for 2020 are raised fractionally on slightly higher second-quarter prices; no change is made to the 2021 broiler price. Turkey price forecasts for 2020 and 2021 are raised as production is reduced.
COARSE GRAINS: This month’s 2020/21 U.S. corn outlook is for sharply lower supplies, reduced feed and residual use, increased food, seed, and industrial use, and lower ending stocks. Corn beginning stocks are raised 145 million bushels, based on lower use forecasts for 2019/20. Feed and residual use for 2019/20 is lower based on indicated disappearance during the first three quarters of the marketing year as reported in the June 30 Grain Stocks. Food, seed, and industrial use is lowered 45 million bushels. Corn used for ethanol is lowered 50 million bushels based on reported use to date and weekly ethanol production data reported by the Energy Information Administration during the month of June and into early July. Projected corn used for glucose and dextrose and starch are both raised, while that used for high fructose corn syrup is lowered. For 2020/21, corn production is forecast 995 million bushels lower based on reduced planted and harvested areas from the June 30 Acreage report. The national average corn yield is unchanged at 178.5 bushels per acre.
During June, harvested-area weighted precipitation for the major corn producing states as reported by the National Centers for Environmental Information was below normal, but did not represent an extreme deviation from the 1988 to 2019 average. Silking as reported in the Crop Progress report is slower than the recent historical average and for much of the crop the critical pollination period will be during middle and late July. Projected feed and residual use is lowered 200 million bushels, reflecting a smaller crop and higher expected prices. Food, seed, and industrial use is raised 25 million bushels, based on projected increases in the amount of corn used for beverage and manufacturing, starch, and glucose and dextrose. Small revisions are made to historical trade and utilization estimates based on the 13th month trade data revisions from the Census Bureau. With supply declining more than use, stocks are lowered 675 million bushels to 2.6 billion. The season-average corn price received by producers is raised 15 cents to $3.35 per bushel.
WHEAT: The outlook for 2020/21 U.S. wheat this month is for larger supplies, lower domestic use, unchanged exports, and increased stocks. Supplies are raised as larger beginning stocks more than offset lower production. Beginning stocks are increased on the NASS Grain Stocks report, issued June 30, which indicated higher 2019/20 ending stocks than previously estimated. This also resulted in lowering 2019/20 feed and residual use by 61 million bushels to 74 million. Wheat production for 2020/21 is reduced 53 million bushels to 1,824 million. Winter wheat production is lowered 48 million bushels to 1,218 million with reductions in Hard Red Winter and Soft Red Winter. The initial 2020/21 survey-based production forecasts for other spring and Durum were issued this month by NASS. Other spring wheat is less than last year at 550 million bushels on lower forecast yields while Durum is higher at 56 million on increased harvested area. Domestic use is 10 million bushels lower this month, all on reduced feed and residual use as 2020/21 U.S. corn supplies are still projected significantly larger than last year. Projected 2020/21 exports are unchanged at 950 million bushels but there were several offsetting by-class changes this month. Ending stocks for 2020/21 are projected 17 million bushels higher than last month at 942 million. The projected season-average farm price (SAFP) is unchanged at $4.60 per bushel, compared to the revised 2019/20 SAFP of $4.58.

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