Trends in U.S. Crop Planted Acres, Production, & Crop Revenues (2000-2016)

Kansas State University published an article titled “Trends in U.S. Crop Planted Acres, Production, & Crop Revenues” on Friday, July 22, 2016.   The full article is located on the KSU Agmanager.info website at the following address:

http://www.agmanager.info/marketing/outlook/newletters/AcreageTrends.asp

Following are the summary and supporting graphics of the article, dealing with longer term trends in U.S. crop planted acreage, production, and crop production revenues among major crops over the year 2000 through projected 2016 period.  It is notable that 2016 U.S. crop revenue projections were down in 2015, and are projected to be even lower in most cases for 2016.

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Summary

Overview

Over the year 2000-2016 time period there has been a significant expansion in both planted acres and production of corn and soybeans in the United States.  Primary factors causing these changes have been the growth that has occurred in corn-based ethanol production in the United States and in Chinese soybean export demand in the World soybean market since year 2000.   When converted to a common per unit of weigh, it is noteworthy that U.S. production of corn on a crop-weight basis is predominant, followed in order by all hay produced, soybeans, wheat, grain sorghum, cotton, barley, oats, and sunflower.

Projected revenues for the MY 2016/17 marketing years for each of the major U.S. crop crops considered here – corn, soybeans, wheat, grain sorghum, cotton, barley, oats, and sunflowers – are down from average revenues for those same crops since and including 2010.  These findings reinforce concerns about weakening U.S. crop enterprise-related financial conditions in the United States in the near term.

U.S. Corn Trends

After achieving high production revenue amounts for U.S. corn in the 2011/12 and 2012/13 marketing years in the range of $74.155 – $76.651 billion dollars, corn revenues have declined as U.S. corn supplies have increased and prices have subsequently declined over the 2013/14 through projected 2016/17 marketing year period.  Projected U.S. corn production revenue of approximately $49.436 billion from the July 12th WASDE report is down nearly 36% from the MY 2011/12 high of $76.651 billion.

U.S. Soybean Trends

After achieving high production revenue amounts in the 2012/13 and 2013/14 marketing years in the range of $43.583 – $43.723 billion dollars, soybean revenues have declined as U.S. soybean prices have fallen over the 2013/14 through projected 2016/17 marketing year period.  Projected U.S. soybean production revenue of approximately $36.680 billion from the July 12th WASDE report is down nearly 16% from the MY 2012/13 high of $45.583 billion.

U.S. Wheat Trends

While planted acres of U.S. wheat have declined over the 2000-2016 period, U.S. wheat production has been unchanged-to-increasing slightly over the period due to increased wheat yields.  With inflation in wheat prices, actual wheat revenues have trended higher over the 2000-2016 period.  However, since year 2000 U.S. wheat production revenues have fallen sharply with the implicit USDA projection of $8.592 billion for MY 2016/17 being down from the range of $10.203 – 17.383 billion over the 2010-2015.  Weakening U.S. wheat exports in recent years following from several consecutive large World wheat crops are a primary cause of the current “large supply / low price / low revenue” situation that exists in the U.S. wheat farm sector.

U.S. Grain Sorghum Trends

While planted acres of U.S. grain sorghum have generally declined over the 2000-2016 period, they sharply increased over the 2013-2016 period.  Helped by strong trade demand from China during 2013-2015, U.S. producers responded by increasing U.S. grain sorghum acreage and production of.  However, with a change in Chinese domestic feedgrain stocks management policies and decreased for U.S. grain sorghum imports, U.S. grain sorghum prices and projected revenues have declined.  Production revenues are projected to be $1.323 billion for MY 2016/17, which is down 36% from the record high of $2.081 billion in MY 2015/16, and at the lowest level since $1.260 billion in MY 2011/12.

U.S. Cotton Trends

Planted acres of U.S. cotton have generally declined over the 2000-2016 period, but U.S. cotton production has on-average trended sideways – owing to increasing U.S. cotton yields.  Production revenues for U.S. cotton have been highly variable over time – with $3.862 billion in MY 2015/16 being a seven (7) year low, and the implicit forecast of $4.475 billion for MY 2016/17 by the USDA still being below the 2010-2016 U.S. average of $5.614 billion.

U.S. Sunflower Trends

Planted acres of U.S. sunflowers have also generally declined over the 2000-2016 period.  However, U.S. sunflower production – while being quite variable over time – has trended higher since the 2010, especially in 2015 and 2016.  Production revenues for U.S. sunflowers have trended moderately lower since MY 2010/11, with the July 12th implicit USDA estimate of $493 million being less than the 2010-2016 average of $559 million.

U.S. All Hay Trends

While harvested acres of all hay in the U.S. have trended lower over the 2000-2016 period, production has generally been unchanged – again owing to increasing yields for U.S. hay over time.  Production revenues for U.S. hay of all types have trended higher over the 2000-2016 period, although the July 12th implicit USDA estimate of $17.362 billion is moderately less than the 2010-2016 average of $17.774 billion.

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KSU Weekly Grain Market Analysis: Conservative Grain Markets with Discounted 2016 U.S. Crop Risks

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, July 22, 2016 will be available on the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_07-22-16.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, July 22nd on the K-State Radio Network (here) – with the program available to listen to online.  After the program airs, a recording can also be listened to from the KSU AgManager.info website via a link  in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp

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KSU Weekly Grain Market Analysis: Down-trending Grain Markets in Early Summer

Grain market summary notes, charts and comments ahead of the KSU Agriculture Today Grain Outlook to played on Friday, July 8, 2016 are available on the Kansas State University www.AgManager.info website at the following web address: http://www.agmanager.info/news/Articles/KSRN_GrainOutlook_07-08-16.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, July 8th on the K-State Radio Network (here) – with the program available to listen to online.  After the program airs, a recording can also be listened to from the KSU AgManager.info website via a link  in the “Radio Interviews” section: http://www.agmanager.info/news/default.asp

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USDA Grain Stocks Report on June 30th – Stocks and Use Trends for the U.S.

On June 30th the USDA National Agricultural Statistics Service (NASS) released its Grain Stocks Report – providing information on June 1st stocks and March-May 2016 use of U.S. of corn, grain sorghum, soybeans and wheat.  A copy of the full report will be released on July 5th on the www.AgManager.info website by the Kansas State University Department of Agricultural Economics (http://www.ageconomics.k-state.edu/).

Following is the article:

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A. U.S. Corn June 1st Stocks & March-May Usage

U.S. Corn Stocks on June 1, 2016 = 4.722 billion bushels (bb)……..Up 194 million bushels (mb) from pre-report trade expectations, and up 6.0% from 4.453 bb on 6/1/2015, up 22.6% from 3.852 bb on 6/1/2014, and up from 2.766 bb on 6/1/2013, and 3.148 bb on 6/1/2012 (See Table 1).

U.S. Corn Usage during March-May 2016  3.100 bb……..Down ≈ 180 mb from implied pre-report trade expectations, and less than 3.307 bb in Mar-May 2015, and 3.165 bb in Mar-May 2014, but still up from 2.674 bb in Mar-May 2013, and 2.886 bb in Mar-May 2012 (See Table 2).

On-Farm Storage of U.S. corn on June 1, 2016 is estimated to be 2.471 bb, up 8.6% from a year earlier, and indicative of a large amount of unsold U.S. corn yet in “current crop” 2015/16.  Large on-farm and off-farm carryover supplies of U.S. corn are likely to continue to be a limiting factor for U.S. corn cash prices in coming months – absent a weather-related, negative set of production factors in July-August 2016.

Off-Farm Commercial Storage of U.S. corn on June 1, 2016 is estimated to be 2.251 bb, up 3.3% from a year earlier, and also indicative of large available yet-unused U.S. corn supplies and of limited prospects for U.S. corn prices this summer.

Market Implications => Higher than expected June 1, 2016 U.S. corn stocks resulting from lower than expected March-May 2016 U.S. corn use are negative factors for U.S. corn price prospects for the remainder of 2016.  United States’ corn stocks of 4.722 bb on June 1, 2016 are from 6% to 71% larger than June 1 stocks over the 2012-2015 period, and likely to be a limiting factor in any potential major corn price rallies – absent major U.S. corn production problems in the summer of 2016.

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B. U.S. Grain Sorghum June 1st Stocks & March-May Usage

U.S. Grain Sorghum Stocks on June 1, 2016 = 88 mb……..Down 32 mb from pre-report trade expectations, but up 158.8% from 34 mb on 6/1/2015, marginally smaller than 92 mb on 6/1/2014, but still up from 41 mb on 6/1/2013, and 59 mb on 6/1/2012 (See Table 1).

U.S. Grain Sorghum Usage during March-May 2016  113 mb……..Up 32 mb from implied pre-report trade expectations, and up from 96 mb in Mar-May 2015, 83 mb in Mar-May 2014, 56 mb in Mar-May 2013, and 50 mb in Mar-May 2012 (See Table 2).

On-Farm Storage of U.S. grain storage on June 1, 2016 is estimated to be 9.700 mb, up 6,740 mb or +227.7% from a year earlier, and indicative of a relatively large amount of unsold U.S. grain sorghum yet in “current crop” 2015/16.

Off-Farm Commercial Storage of U.S. grain storage on June 1, 2016 is estimated to be 78.565 mb, up 47.236 mb or +150.8% from a year earlier, and also indicative of large available yet-unused U.S. grain sorghum supplies available to the market.

Market Implications => A continuation of at least moderately strong exports of U.S. grain sorghum during the first three quarters of the “current” 2015/16 marketing year (i.e., September 2015 through August 2016) have been a major factor in usage being higher than during the previous four (4) March-May periods.

This is a supportive, bullish result for U.S. grain sorghum markets – but given the current oversupply of U.S. corn as well as at least moderate supplies of U.S. grain sorghum – has not had a noticeable positive impact of U.S. grain sorghum basis levels in Kansas and elsewhere in the U.S. central and southern plains states of Oklahoma and Texas.

U.S. Wheat June 1st Stocks & March-May Usage

U.S. Wheat Stocks on June 1, 2016 = 981 mb……..down 1 mb from pre-report expectations, and up from 752 mb on 6/1/2015, 590 mb on 6/1/2014, 718 mb on 6/1/2013, and 743 mb on 6/1/2012 (See Table 1).

U.S. Wheat Usage during March-May 2016 391 mb……..Up 1 mb from implied pre-report trade expectations, and down from 423 in Mar-May 2015, 514 mb in Mar-May 2014, 548 mb in Mar-May 2013, and 486 mb in Mar-May 2012 (See Table 2).

On-Farm Storage of U.S. wheat on June 1, 2016 is estimated to be 197.2 mb, up 27.1% from a year earlier, and indicative of a large amount of unsold U.S. wheat yet available in “current crop” MY 2015/16.  These carryover supplies are likely to continue to be a limiting factor for U.S. wheat cash prices in coming months.

Off-Farm Commercial Storage of U.S. corn on June 1, 2016 is estimated to be 784.1 bb, up 4.2% from a year earlier, also indicative of large available yet-unused U.S. wheat supplies and of limited prospects for U.S. wheat prices at this time for this summer.

Market Implications => Continued weak exports of U.S. wheat during both the Dec-Feb and Mar-May 2016 periods and only moderate wheat feeding to-date have been major factors in U.S. wheat usage being less than during the previous three (3) March-May periods. This is a negative, bearish result for U.S. wheat market prices.

However, the possibility of extreme World weather patterns causing wheat production problems in major foreign wheat producing nations could still mitigate and overcome these negative U.S. supply-demand factors to some degree, and begin to play a positive role in U.S. wheat market direction in coming weeks and months. But as of yet – other than some reports of there being too much moisture for wheat development in parts of Europe and also of reports from China of wheat production problems – significant World wheat production shortfalls and supply-demand disruptions have not occurred yet in 2016.

Also, it is possible that a weather-related, negative set of production factors in the U.S. Corn Belt during July-August 2016 could impact U.S. feedgrain markets and in turn have a positive spill-over, cross-market impact on U.S. wheat feeding – leading to larger than anticipated feeding of low-priced U.S. wheat in Kansas and the southern plains states of Oklahoma and Texas.

D. U.S. Soybean June 1st Stocks & March-May Usage

U.S. Soybean Stocks on June 1, 2016 = 870 mb……..Up 37 mb from pre-report trade expectations, and up sharply from 627 mb on 6/1/2015, 405 mb on 6/1/2014, 435 mb on 6/1/2013, and 668 mb on 6/1/2012 (See Table 1).

U.S. Soybean Usage during March-May 2016  661 mb……..Down ≈ 37 mb from implied pre-report trade expectations, and down from 708 mb in Mar-May 2015, while being up from 614 mb in Mar-May 2014, and 571 mb in Mar-May 2013, while down from 712 mb in Mar-May 2012 (See Table 2).

On-Farm Storage of U.S. soybeans on June 1, 2016 is estimated to be 281 mb, up 14.2% from a year earlier, and indicative of sizable supplies of unsold U.S. soybeans yet in “current crop” 2015/16 – that (similar to corn and wheat markets) is likely to be a somewhat of a negative factor in U.S. soybean cash prices in coming months.

However, 2016 production problems in parts of Brazil have provided market support for U.S. soybean exports and domestic soybean crush – making U.S. soybean demand stronger on a relative basis than for U.S. corn and wheat – and has provided at least moderate support to date for U.S. soybean prices.  Also, production risk still exists for the 2016 U.S. soybean crop through late-summer / early fall 2016.

Off-Farm Commercial Storage of U.S. soybeans on June 1, 2016 is estimated to be 589 mb, down 6.1% from a year earlier, and also indicative of commercial demand for U.S. soybeans for the reasons explained immediately above.

Market Implications => At face value, this grain stocks report is “moderately negative” for U.S. soybean markets, with higher than expected June 1st U.S. soybean stocks, and moderately lower than expected Mar-May 2016 usage.  However, a recent surge in demand for U.S. soybean exports and domestic crush brought about by South American soybean production problems has provided support of U.S. soybean prices.  This support will likely continue until more is known about 2016 U.S. soybean production prospects – in particular whether any problems or shortfalls will occur in 2016 U.S. soybean production during the summer of 2016.

 

U.S. Ethanol and Biodiesel Market-Profitability Graphics through 6/28/2016 (via KSU AgManager)

Following are some graphics on price and profitability trends in the U.S. ethanol and biodiesel industries, which will soon be available on the KSU AgManager website: http://www.agmanager.info/    The full presentation titled “U.S. Ethanol & Biodiesel Market Situation” made for WILL (Illinois Public Radio) on Tuesday, June 28, 2016 and will be located at the KSU AgManager.info website – at the following web address:

http://www.agmanager.info/news/Articles/Ethanol-Market_WILL-Radio_06-28-16.pptx

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KSU Soybean Market Outlook: Price Prospects as of Late June 2016

An analysis of U.S. and World soybean supply-demand factors and June-Dec 2016 and early-mid 2017 price prospects following the USDA’s June 10th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports and the market actions that have followed them – available on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary – with the full analysis-article for soybeans to be found at this web location:  http://www.agmanager.info/marketing/outlook/newletters/Soybeans.asp

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Summary

Recent Soybean Futures Price Action

Since the USDA released its World Agricultural Supply and Demand Estimates (WASDE) report on June 10th, soybean futures prices have declined.  Since March 2, 2016 when CME JULY 2016 soybean futures prices closed at $8.67 ¾, prices have trended upward to a high of $12.08 ½ on the day of the release of the June 10th WASDE report – closing at $11.78 ¼ that same day.  Since then, CME JULY 2016 soybeans declined to $10.99 ¼ on Friday, June 24th before closing at $11.03 /bu that same day.

Soybean Market Perspective

Since 2014, World soybean market prices have been limited by an ongoing “large crop – low price” regime, caused by consecutive record World soybean production years for 2014 and 2015, with another record crop projected for 2016 in South America and the United States.  However, in March-early June 2016, significant soybean production problems have occurred in key South American production areas such in Argentina and parts of Brazil – along with a heightening of trade concerns about summer 2016 weather conditions in the U.S. Corn Belt.   These emerging World soybean production concerns have helped to strengthen U.S. soybean export trade in the “current crop” 2015/16 marketing year (ending August 31, 2016) and improved the outlook for U.S. soybean exports in “new crop” MY 2016 (starting September 1, 2016).

Longer term, from MY 2008/09 to projected “new crop” MY 2016/17, the USDA forecasts a strong upward trend in World soybean production (up 6.6% annually) which will have “out-paced” the increase in World soybean use (up 5.9% per year) if it holds true.  However, the shortfall in South American’s soybean production in “current” MY 2015/16 has at least temporarily interrupted these trends, and has caused projected World soybean ending stocks and percent ending stocks-to-use to fall since MY 2014/15.  As this trend toward larger supplies has “abated” in “current” MY 2015/16 and for projected “new crop” MY 2016/17, U.S. and World soybean prices have received at least moderate support.  These trends are illustrated in that since World soybean ending stocks of 62.0 mmt (22.5% %S/U) in MY 2013/14, stocks grew sharply in MY 2014/15 to 78.3 mmt (25.9% S/U), but have since declined to an estimate of 72.3 mmt (22.7% S/U) in “current” MY 2015/16, and are forecast to decline further to 66.3 mmt (20.2% S/U) in “new crop” MY 2016/17.

Key Market Issue to Address for Remainder of 2016

A key World soybean market issue will be to determine whether weather or disease problems end up driving U.S. soybean production low enough to alter the existing “large supply – buyer’s market” situation that has existed in U.S. and World soybean markets in recent years, or if a large 2016 U.S. soybean crop will “rectify” this short run trend toward lower World soybean ending stocks and lead to a re-establishment of the “large supply – low price” situation in fall 2016 that had existed during the 2014-2015 time period.

USDA U.S. Soybean Forecast of “Current” MY 2015/16

As usual at this time in the marketing year, the USDA maintained its forecast 2015 U.S. soybean production of a record 3.929 billion bushels (bb) – up marginally from 3.927 bb in 2014.  For “current” 2015/16, USDA projected U.S. total supplies at a record 4.150 bb (vs 4.052 bb in MY 2014/15), domestic crush at 1.890 bb (up 10 mb from May and 20 mb from April), exports at 1.760 bb (up 20 mb from May and 70 mb from March – but still down from the existing record 1.843 bb in “current” MY 2014/15), total use at 3.780 bb (up 30 mb from May – but less than the record of 3.862 bb in MY 2014/15), and ending stocks at a 9-year high of 370 mb (down 30 mb from May, and 75 mb from April, but still up from 191 million bushels or ‘mb’ in MY 2014/15, and from 92 mb in MY 2013/14).

Ending stocks-to-use are projected at 9.79% – down from 10.67% in May and 12.01% in April, but still up dramatically from 4.95% in MY 2014/15, and the record low of 2.65% in MY 2013/14.  The USDA forecast “current” MY 2015/16 U.S. soybean average prices to be $9.05 /bu – up $0.15 from May, but still down from $10.10 in MY 2014/15, $13.00 in MY 2013/14, and the record high of $14.40 in MY 2012/13.

USDA U.S. Soybean Forecast for “New Crop” MY 2016/17

The USDA projected 2016 U.S. soybean plantings of 82.236 million acres (ma) – down 414,000 acres from 2015.  Forecast 2016 harvested acres of 81.370 ma is calculated from projections of production and average yields, and is down 479,000 acres vs 2015.  With projected yields of 46.7 bu/ac, 2016 U.S. soybean production is projected to be 3.800 bb – 3rd highest on record behind 3.927 bb in 2014 and 3.929 bb in 2015.   With forecast “new crop” MY 2016/17 total use of 3.940 bb (a new record high ahead of 3.862 bb in MY 2014/15), and projected ending stocks of 260 mb (6.60% S/U), U.S. soybean prices are estimated by the USDA to be in the range of $8.75-$10.25 (midpoint = $9.50 /bu) – down from the $9.05 /bu in “current” MY 2015/16 and $10.10 in MY 2014/15.  This USDA projection is thought to have a 35% probability of occurring in the judgment of Kansas State University Extension.

KSU Forecasts for “New Crop” MY 2016/17

Three alternative KSU-Scenarios for U.S. soybean supply-demand and prices are presented for “new crop” MY 2016/17, with each assuming a 1.000 ma upward adjustment in 2016 U.S. soybean planted acres from the USDA’s March 31st Prospective Plantings and the June 10th WASDE reports.

A) KSU “Higher Acres – Trend Yield” Scenario (30% probability) assumes for “new crop” MY 2016/17: 83.236 ma planted, 82.242 ma harvested, 45.85 bu/ac trend yield, 3.771 bb production, 4.171 bb total supplies, 3.915 bb total use, 256 mb ending stocks, 6.54% S/U, & $10.25 /bu U.S. soybean average price;

B) KSU “Higher Acres – Moderate Drought” (20% prob.) assumes 83.236 ma planted, 82.242 ma harvested, 44.0 bu/ac yield, 3.619 bb production, 4.019 bb total supplies, 3.801 bb total use, 218 mb ending stocks, 5.74% S/U, & $10.75 /bu U.S. soybean price; and

C) KSU “Higher Acres & Serious Drought” (15% prob.) assumes 83.236 ma planted, 82.242 ma harvested, 39.0 bu/ac yield, 3.207 bb production, 3.607 bb total supplies, 3.436 bb total use, 171 mb ending stocks, 4.98% S/U, & $11.50 /bu U.S. soybean price.

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KSU Wheat Market Outlook in Mid June 2016 – Assessing “New Crop” Market Possibilities during U.S. HRW Wheat Harvest

An analysis of U.S. and World wheat supply-demand factors and 2016-2017 price prospects following the USDA’s June 10th Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports, and the market actions that have followed those reports will be available on the KSU AgManager website on Wednesday, June 22, 2016 (http://www.agmanager.info/default.asp).

Following is a summary – with the full analysis-article for Wheat to be found at this web location:  http://www.agmanager.info/marketing/outlook/newletters/Wheat.asp

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Summary

Overview

Since the USDA’s June 10th Crop Production and World Agricultural Supply and Demand Estimates (WASDE) report, U.S. and World wheat market prices have fallen sharply – especially as the U.S. hard red winter wheat harvest has advanced.

For the “new crop” 2016/17 marketing year the USDA projected:

1) World wheat total supplies of 973.8 mmt and total use of 716.0 mmt – both at record high levels,

2) that at least marginally weaker trade continues in World wheat exports with 165.7 mmt in the “new” marketing year – down from 168.3 mmt last year, but up from 164.1 mmt two years ago,

3) World wheat ending stocks at a record high 257.8 mmt compared to 243.0 mmt last year, and 216.5 mmt two years ago, and

4) World wheat percent ending stocks-to-use of 36.0% – up from 34.3% last year and from 30.7% two years ago – up to their highest level in 15 years (since MY 2001/02).

For a perspective on how historically large World wheat stocks and percent stocks-to-use are, the 34-year low in World wheat ending stocks of 128.7 mmt and at least a 57-year low in percent ending stocks-to-use of 20.9% S/U both occurred in MY 2007/08, the last major World wheat “short crop” marketing year.  The “large crop-over supply” situation that exists in World and U.S. wheat markets continues to have a strong prevailing negative influence on World wheat prices.

It is likely that significant World wheat production problems and/or trade disruptions would need to occur in coming weeks and months in order to have wheat prices recover significantly in spring-summer 2016.  Ongoing strength in the U.S. dollar exchange rate – although it has been weakening recently – also is a serious negative factor that is limiting U.S. wheat exports, resulting in higher U.S. wheat ending stocks and % ending stocks-to-use, and is consequently causing U.S. wheat prices to fall sharply.

USDA U.S. Wheat S/D Forecast for “Old Crop” MY 2015/16

The USDA made minor changes in its supply-demand and price projections for U.S. wheat in the “old crop” 2015/16 marketing year – with 2.052 billion bushels (bb) production, 2.921 bb total supplies (down 3 mb on reduced imports), 960 million bushels (mb) of food use, 775 mb of exports (down 5 mb), 140 mb of feed use, 1.941 bb of total use (down 5 mb), 980 mb ending stocks (up 2 mb), and 50.49% ending-stocks-to-use (up from 50.24% in May to the highest level since 48.6% in MY 2009/10).  The USDA forecast of “old crop” MY 2015/16 U.S. average wheat prices to be $4.90 /bu – the lowest U.S. wheat marketing year average price since $4.87 /bu in MY 2009/10 when U.S. wheat ending stocks-to-use was 48.58%.

USDA U.S. Wheat S/D Forecast for “New Crop” MY 2016/17

The USDA projected 2016 U.S. wheat plantings of 49.559 million acres (ma) – down 5.085 ma from 2015.  The USDA also implicitly forecast 2016 harvested acres of 42.737 ma which would be down 4.357 ma (-9.25%) vs 2015.  Based on projected 2016 U.S. wheat yields of 48.6 bu/ac (up from 43.6 bu/ac in 2015), 2016 U.S. wheat production is projected to be 2.077 bb (vs 2.052 bb in 2015), with total supplies of 3.182 bb (up from 2.921 bb in “old crop” MY 2015/16), and total use of 2.132 bb (up from 1.941 bb in “old crop” MY 2015/16).

Given these numbers, the USDA projected “new crop” MY 2016/17 ending stocks of 1.050 bb (vs 980 mb a year ago), with percent ending stocks-to-use of 49.25% S/U (vs 50.49% last year).  U.S. wheat average prices are projected to be in the range of $3.60 to $4.40 (midpoint = $4.00 /bu) – down from $4.90 /bu in “old crop” MY 2015/16.   It is assumed by Kansas State University that these USDA projections for “new crop” MY 2016/17 have a 35% probability of occurring.

KSU U.S. Wheat S/D Forecasts for “New Crop” MY 2016/17

Three alternative KSU-Scenarios for U.S. wheat supply-demand and prices are presented for “new crop” MY 2016/17, with each assuming the same 2016 planted acreage as USDA.  However, based on historical U.S. percent harvested-to-planted acreage relationships, these KSU projections assumed 1.000 million less acres harvested than the implicit USDA estimate.  These KSU projections also assume at least a moderation in the high value of the U.S. dollar, and some improvement in U.S. wheat exports as a result.

A) KSU “Trend Yield – Moderate $USD” Scenario (30% probability) assumes for “new crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production, 3.025 bb total supplies, 850 mb exports, 2.079 bb total use, 946 mb ending stocks, 45.50% S/U, & $4.40 /bu U.S. wheat average price;

B) KSU “Trend Yield – Foreign Crop Problems – Moderate $USD” Scenario (15% probability) assumes: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production, 3.025 bb total supplies, 1.100 bb exports, 2.329 bb total use, 696 mb ending stocks, 29.88% S/U, & $5.50 /bu U.S. wheat average price;  and

C) KSU “Trend Yield – Fall 2017 Crop Problems – Moderate $USD” (20% prob.) assumes for “new crop” MY 2016/17: 49.559 ma planted, 41.737 ma harvested, 46.0 bu/ac yield, 1.920 bb production, 3.025 bb total supplies, 1,000 mb exports, 2.229 bb total use, 796 mb ending stocks, 35.71% S/U, & $5.10 /bu U.S. wheat average price.

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