Summary of the July WASDE Report

USDA World Agricultural Supply & Demand Estimates - Released July 12th

July USDA WASDE Report: Bullish for Cattle; Bearish for Corn


LIVESTOCK, POULTRY: The forecast for 2021 red meat and poultry production is lowered from last month on lower pork, broiler, and turkey forecasts. The beef production forecast is unchanged as higher slaughter is offset by lower expected carcass weights. Pork production is reduced on lower expected second-half commercial hog slaughter. Broiler and turkey production are lowered on the pace of production in the second quarter. However, the forecasts for the remainder of the year are unchanged.
For 2022, the red meat and poultry production forecast is lowered, primarily on lower pork production as well as slightly lower beef production. USDA’s Quarterly Hogs and Pigs report indicated producers expect to farrow fewer sows in the second half of 2021 which, when coupled with slower forecast growth in pigs per litter, will tighten supplies of market-ready hogs in 2022 relative to last month. USDA will release the Cattle report on July 23, which will provide an indication of the midyear inventory and producer intentions for heifer retention. Broiler, turkey, and egg forecasts are unchanged from last month.
Beef import forecasts for 2021 and 2022 are unchanged from last month while the export forecasts are raised for both years on continued firm demand in Asia. Pork import and export forecasts for 2021 and 2022 are unchanged. Broiler exports for 2021 are raised primarily on higher-than-expected May data, but no change is made to the forecasts for 2022. The turkey export forecast is raised slightly for 2021 on current trade data; the forecast for 2022 is unchanged.
Cattle price forecasts for 2021 are raised on the strength of recent prices; no change is made to the annual 2022 price. The 2021 hog price forecast is reduced on current price weakness, but the price forecast for 2022 is unchanged as tighter supplies during the year, relative to last month, are expected to help support prices. The broiler price forecast for 2021 is raised on slightly higher expected third-quarter prices; no change is made to the 2022 broiler price. Turkey price forecasts for 2021 and 2022 are raised on improving demand.


COARSE GRAINS: This month’s 2021/22 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and higher ending stocks. Corn beginning stocks are lowered 25 million bushels, based on greater feed and residual use for 2020/21 as indicated in the June 30 Grain Stocks report. Corn production for 2021/22 is forecast 175 million bushels higher based on greater planted and harvested area from the June 30 Acreage report. The national average corn yield is unchanged at 179.5 bushels per acre. During June, harvested-area weighted precipitation for the major corn producing states was below normal but did not represent an extreme deviation from the 1988 to 2020 average. For much of the crop the critical pollination period will be during middle and late July and USDA will provide its first survey-based corn yield forecast of the season in the August 12 Crop Production report.
Total U.S. corn use for 2021/22 is forecast 75 million bushels higher with increases for feed and residual use and exports. Feed and residual use is raised reflecting a larger crop. Corn exports are raised 50 million bushels, with sharply lower exports expected for Brazil. With supply rising more than use, ending stocks are up 75 million bushels. The season-average farm price received by producers is lowered 10 cents to $5.60 per bushel.
This month’s 2021/22 foreign coarse grain outlook is for lower production and use, larger trade, and smaller stocks relative to last month. Foreign corn production is higher, with a projected increase for Russia based on higher indicated area. Barley production is raised for Australia but lowered for Canada, the EU, Russia, Kazakhstan, and India. For 2020/21, foreign corn production is lowered, with reductions for Brazil and Paraguay more than offsetting an increase for Argentina.
Major global trade changes for 2021/22 include larger corn exports for the United States and Russia with a reduction for Mexico. Corn imports are lowered for the EU and Iran. For 2020/21, corn exports are raised for Argentina but lowered for Brazil for the local marketing year beginning March 2021. Foreign corn ending stocks for 2021/22 are virtually unchanged from last month.
WHEAT: The outlook for 2021/22 U.S. wheat this month is for reduced supplies, lower domestic use and exports, and decreased ending stocks. Supplies are lowered on reduced wheat production and beginning stocks. All wheat production is lowered 152 million bushels to 1,746 million. The all wheat yield is 45.8 bushels per acre, down 4.9 bushels from last month. The NASS July Crop Production report provides survey-based production forecasts for all wheat classes for the first time in the 2021/22 crop year. The production forecasts for durum and other spring wheat indicated a significant decline compared to last year for these two classes due to the severe drought conditions affecting the Northern Plains. Partially offsetting this decrease is higher winter wheat production, both on increased harvested acreage and a higher yield. Imports are raised 20 million bushels to 145 million.  Beginning stocks are reduced on the latest NASS Grain Stocks report, which indicated lower 2020/2021 ending stocks than previously estimated.


Projected exports and feed and residual usage are lowered to 875 and 170 million bushels, respectively, on the reduction in durum and other spring wheat supplies. These would be the smallest U.S. wheat exports since the 2015/16 marketing year. Projected 2021/22 ending stocks are reduced 105 million bushels to 665 million and are the lowest since 2013/14. The projected 2021/22 season-average farm price is raised $0.10 per bushel to $6.60.
The global wheat outlook for 2021/22 is for reduced supplies, fractionally lower consumption, increased trade, and lower ending stocks. Supplies are projected to decline 5.3 million tons to 1,082.6 million on reduced beginning stocks in several countries and lower U.S. production not offsetting higher foreign production. Global production is lowered 2.0 million tons to 792.4 million but still remains at a record. Australia’s production is raised 1.5 million tons to 28.5 million, based on continued widespread precipitation benefiting emergence and crop establishment. Russia’s production is lowered 1.0 million tons to 85.0 million.
Winter wheat production is reduced 0.5 million tons to 64.0 million on decreased harvested area from a damaging early spring freeze more than offsetting higher yields on continued favorable conditions across Western Russia. Spring wheat is also lowered 0.5 million tons to 21.0 million on reduced yields with hot and dry conditions affecting the spring wheat region of Central Russia. Kazakhstan is lowered 1.0 million tons to 13.0 million on similar unfavorable conditions. The EU and United Kingdom are increased a combined 1.4 million tons to 138.2 and 14.8 million, respectively on continued favorable conditions across Northern and Central Europe.
Projected 2021/22 world consumption is fractionally lower at 790.9 million on lower feed and residual use in Russia, the United States, and Kazakhstan mostly being offset by higher food, seed, and industrial use in several countries. Projected 2021/22 global trade is raised 0.8 million tons to a record 204.0 million, on increased exports by the EU, Ukraine, and Australia offsetting reductions in Canada, Kazakhstan, and the United States. Projected 2021/22 world ending stocks are lowered 5.1 million tons to 291.7 million but remain above last year.

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