Supply and Demand Estimates and Profitability Outlook


 
The following is a summary of the USDA's monthly World Agricultural Supply and Demand Estimates (WASDE) report. Domestic balance sheets for corn, soybeans, cotton, and wheat are displayed along with price reaction in futures markets for each commodity on the day of the report release. Additionally, supply and demand estimates for key importing and exporting countries are provided for the current month along with change in estimates from the previous report. The Profitability Outlook section contains estimated returns per acre for each commodity based  on 2016 Tennessee state average/trend yields and current price offerings (note: cotton prices include a seed and hauling rebate). Variable expenses are based on the University of Tennessee Extension 2017 Row Crop Budgets. Prices are updated monthly; expenses are updated as warranted during the year and may be different than the expenses contained in the 2017 Row Crop Budgets. This section provides an estimation of the current relative profitability amongst major row crops in Tennessee.
The report is prepared monthly by Dr. Aaron Smith and Chuck Danehower.


August 10, 2017 - USDA World Supply and Demand Estimates

 

Corn

Market Reaction: September 2017 corn futures closed down 15 cents at $3.57 ¼ with a trading range for the day of $3.56 ½ to $3.75 ½. December 2017 corn futures closed down 15 ¼ cents at $3.71 with a trading range for the day of $3.70 ¼ to $3.89. Initial survey based yield estimates were higher than expectations at 169.5 bu/acre. Greater yield (production) provided the fuel for the market sell off. Decreased projected ending stocks year-over-year, both domestically and internationally, remain a positive for prices.

 

USDA Summary: This month’s 2017/18 U.S. corn outlook is for lower supplies, reduced feed and residual use and exports, and a decline in ending stocks.  Corn production is forecast at 14.2 billion bushels, down 102 million from the July projection.  The season’s first survey-based corn yield forecast, at 169.5 bushels per acre, is 1.2 bushels lower than last month’s trend-based projection.  This month’s Crop Production report indicates that South Dakota, Iowa, Minnesota, and Illinois are forecast to have yields below a year ago.  The projected yield for Indiana is unchanged relative to last year, while Nebraska and Ohio are forecast higher. Projected feed and residual use for 2017/18 is lowered 25 million bushels on a smaller crop.  Exports are forecast down 25 million bushels, reflecting the increased competitiveness of supplies in Argentina and Brazil and the low level of new-crop outstanding sales.  With supplies falling faster than use, ending stocks are reduced 52 million bushels.  The projected range for the season-average corn price received by producers is unchanged at $2.90 to $3.70 per bushel. 

 

This month’s 2017/18 foreign coarse grain outlook is for virtually unchanged production, lower trade, and greater stocks relative to last month.  EU corn and barley production are reduced.  Canada corn production is down on lower projected harvested area.  Corn and barley production forecasts are raised for Russia based on higher corn area and favorable growing conditions for barley.  Ukraine corn production is unchanged as a reduction in projected yield is offset by increased area.  For 2016/17, corn production is increased for Brazil based on second crop corn harvest results to date.

 

Major global corn grain trade changes for 2017/18 include corn export reductions for the EU, Serbia, and Canada.  More than offsetting are increases for Ukraine and Russia.  Brazil’s corn exports are raised for 2016/17 based on record-high shipments observed for the local marketing year beginning in March 2017.  Corn imports for 2017/18 are raised, mostly reflecting increases for the EU and Iran.  Foreign corn ending stocks are raised from last month.  Historical revisions are made to corn stock estimates for Ukraine to better reflect statistics published by the government.

 

 

2013/14

2014/15

2015/16

2016/17 Est.

2017/18 Projected July

2017/18 Projected August

2017/18 Change From Previous Month

Change 2016/17 to 2017/18


Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

95.4

90.6

88

94

90.9

90.9

0.0

-3.1

Acres Harvested (Million Acres)

87.5

83.1

80.8

86.7

83.5

83.5

0.0

-3.2

U.S. Average Yield (Bu/Acre)

158.1

171.0

168.4

174.6

170.7

169.5

-1.2

-5.1


Supply (Million Bushels)

Beg. Stocks

821

1,232

1,731

1,737

2,370

2,370

0

633

Production

13,829

14,216

13,602

15,148

14,255

14,153

-102

-995

Imports

36

32

68

55

50

50

0

-5

Total Supply

14,686

15,479

15,401

16,940

16,675

16,573

-102

-367


Use & Ending Stocks (Million Bushels)

Feed and Residual

5,040

5,280

5,113

5,425

5,475

5,450

-25

25

Ethanol

5,124

5,200

5,224

5,450

5,500

5,500

0

50

Food, Seed & Industrial

1,369

1,401

1,426

1,470

1,500

1,500

0

30

Exports

1,920

1,867

1,901

2,225

1,875

1,850

-25

-375

Total Use

13,454

13,748

13,664

14,570

14,350

14,300

-50

-270

U.S. Ending Stocks

1,232

1,731

1,737

2,370

2,325

2,273

-52

-97

Foreign Stocks

5,653

6,529

6,668

6,630

5,580

5,635

55

-995


Price and Stocks to Use Ratio

U.S. Avg. Season Price ($/Bu)

$4.46

$3.70

$3.61

$3.25-$3.45

$2.90-$3.70

$2.90-$3.70

$0.00

-$0.05

U.S. Stocks/Use

9.16%

12.59%

12.71%

16.27%

16.20%

15.90%

-0.3%

-0.37%

Source: USDA-WASDE August 10, 2017

  

 

World Corn Supply and Use (Million Bushels) 2017/18 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

9,000

40,686

5,795

25,641

41,778

5,985

7,908

US

2,370

14,153

50

5,450

12,450

1,850

2,273

Foreign

6,630

26,533

5,745

20,191

29,328

4,135

5,635

Argentina

141

1,575

0

315

465

1,122

129

Brazil

404

3,740

12

2,047

2,421

1,339

396

South Africa

116

492

4

228

461

67

85

Egypt

83

236

394

528

626

0

87

EU

249

2,362

630

2,212

2,949

59

234

Japan

49

0

591

453

594

0

45

Mexico

266

984

610

894

1,602

28

231

Southeast Asia

144

1,189

594

1,468

1,775

28

124

South Korea

75

3

402

315

405

0

74

Canada

95

547

31

323

543

51

80

China

3,987

8,464

118

6,535

9,370

1

3,199

Ukraine

45

1,122

1

217

272

846

50

ROW

975

5,817

2,358

4,656

7,845

594

902


World Corn Supply and Use (Million Bushels) 2017/18 August-July

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

43

-135

56

-33

-94

-17

2

US

-

-102

-

-25

-25

-25

-52

Foreign

43

-33

56

-8

-69

8

54

Argentina

-

-

-

-

-

-

-

Brazil

20

-

-

-

-

-

20

South Africa

-

-

-

-

-

-

-

Egypt

-

-

-

-

-

-

-

EU

13

-63

39

8

8

-31

14

Japan

-

-

-

-

-

-

-

Mexico

-

-

-

-

-

-

-

Southeast Asia

-1

0

-

-2

-2

-

1

South Korea

-

-

-

-

-

-

-

Canada

-

-20

-

-12

-12

-8

-

China

-1

-

-

-

-

-

-1

Ukraine

4

-

-

-39

-39

39

4

ROW

8

49

16

37

-24

8

17

Source: USDA-WASDE August 10, 2017

 


Cotton

Market Reaction: December 2017 cotton futures closed down 3.00 cents at 68.11 with a trading range for the day of 68.11 to 71.19 cents. March 2018 cotton futures closed down 2.93 cents at 67.83 with a trading range for the day of 67.77 to 70.81 cents. Yield was projected at 892 lbs/acre which if realized would tie 2012 for the highest ever.


USDA Summary: The first survey of U.S. 2017 crop production indicates a crop of 20.5 million bales, 1.5 million above last month and the largest production in 11 years.  The larger crop is partially offset by lower beginning stocks which are reduced 400,000 bales to 2.8 million due to an increase in final 2016/17 exports.  Domestic mill use for 2017/18 is lowered 50,000 bales, but exports are raised 700,000 based on the larger supply and strong early-season commitments.  Ending stocks are now projected at 5.8 million bales which, if realized, would be the largest since 2008/09.  The forecast range for the marketing year average price received by producers of 55 to 67 cents per pound is narrowed 1 cent on each end, with the midpoint unchanged at 61 cents.

Sharply larger production is raising this month’s 2017/18 global stock forecasts.  World production is increased 1.9 million bales, as higher production in the United States, China, and Benin is partially offset by a reduction for Turkey.  The forecast for China’s crop is raised 500,000 bales mainly on higher area.  World consumption for 2017/18 is forecast 375,000 bales higher this month, largely due to a 500,000-bale increase for China.  At 3.3 percent, growth in world cotton consumption in 2017/18 is projected at its highest rate in 5 years.  World 2017/18 ending stocks are now projected at 90.1 million bales, an increase of 1.4 million from the July forecast, and 100,000 above 2016/17.  

 

 

 

 

2013/14

2014/15

2015/16

2016/17 Est

2017/18 Projected July

2017/18 Projected August

2017/18 Change From Previous Month

Change 2016/17 to 2017/18


Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

10.41

11.04

8.58

10.07

12.06

12.06

0

1.99

Acres Harvested (Million Acres)

7.54

9.35

8.07

9.51

11.18

11.05

-0.13

1.54

U.S. Average Yield (lbs/acre)

821

838

766

867

816

892

76

25


Supply (Million Bales)

Beg. Stocks

3.8

2.35

3.65

3.8

3.2

2.8

-0.4

-1

Production

12.91

16.32

12.89

17.17

19

20.55

1.55

3.38

Imports

0.01

0.01

0.03

0.01

0.01

0.01

0

0

Total Supply

16.72

18.68

16.57

20.98

22.21

23.36

1.15

2.38


Use & Ending Stocks (Million Bales)

Domestic

3.55

3.58

3.45

3.25

3.4

3.35

-0.05

0.1

Exports

10.53

11.25

9.15

14.92

13.5

14.2

0.7

-0.72

Total Use

14.08

14.82

12.6

18.17

16.9

17.55

0.65

-0.62

U.S. Ending Stocks

2.35

3.65

3.8

2.8

5.3

5.8

0.5

3

Foreign Stocks

100.63

108.09

93.42

87.19

83.43

84.29

0.86

-2.9

Chinese Stocks

62.71

66.92

58.2

48.4

39.35

39.35

0

-9.05


Price and Stocks to Use Ratio

U.S. Avg. Season Price ($/lb)

$0.779

$0.613

$0.612

$0.68

$0.54-$0.68

$0.55-$0.67

$0.000

-$0.070

U.S. Stocks/Use

17%

25%

30%

15%

31%

33%

1.69%

17.64%

Chinese Stocks/Use

182%

197%

166%

129%

104%

102%

-1.34%

-26.86%

Source: USDA-WASDE August 10, 2017



 

World Cotton Supply and Use (Million 480 lb Bales) 2017/18 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

89.99

117.31

37.19

117.4

37.17

-0.19

90.09

US

2.8

20.55

0.01

3.35

14.2

0.01

5.8

Foreign

87.19

96.76

37.18

114.05

22.97

-0.2

84.29

Central Asia

2.47

6.2

0

2.65

3.01

0

3.01

Afr. Fr. Zone

1.78

5.24

0

0.12

4.56

0

2.35

Australia

2.65

4.8

0

0.04

3.9

-0.15

3.66

Brazil

7.41

7

0.1

3.3

3.2

-0.15

8.16

India

12.59

29

1.3

24.5

4.3

0

14.09

Mexico

0.44

1.15

1.03

1.8

0.15

0.03

0.64

China

48.4

24.5

5

38.5

0.05

0

39.35

EU

0.23

1.36

0.72

0.74

1.21

0

0.35

Turkey

1.65

3.6

3.45

6.6

0.33

0

1.77

Pakistan

2.27

9.15

2.2

10.6

0.35

0.03

2.64

Indonesia

0.63

0

3.35

3.3

0.01

0

0.68

Thailand

0.2

0

1.3

1.25

0

0.03

0.23

Bangladesh

1.41

0.13

7.2

6.9

0

0.01

1.82

Vietnam

0.88

0

6.2

5.9

0

0

1.19

ROW

4.18

4.63

5.33

7.85

1.9

0.00

4.35


World Cotton Supply and Use (Million 480 lb Bales) 2017/18 August-July

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

-0.28

1.95

0.42

0.37

0.36

-0.03

1.36

US

-0.4

1.55

-

-0.05

0.7

-

0.5

Foreign

0.12

0.4

0.42

0.42

-0.34

-0.03

0.86

Central Asia

-

0.01

-

-

-0.04

-

0.05

Afr. Fr. Zone

0.08

0.08

-

-

-0.07

-

0.24

Australia

-0.4

-

-

-

-0.35

-

-0.05

Brazil

0.01

-

-

-

0.1

-

-0.09

India

0.35

-

-0.1

-0.25

0.1

-

0.4

Mexico

-

-

0.1

-

-

-

0.1

China

-

0.5

-

0.5

-

-

-

EU

0.03

-

-

-

-0.03

-0.03

0.08

Turkey

0.2

-0.2

0.05

0.05

-0.02

-

0.02

Pakistan

-0.12

-

-

-

-0.05

-

-0.08

Indonesia

-

-

0.15

0.1

-

-

0.05

Thailand

-

-

-

-

-

-

-

Bangladesh

-

-

0.1

-

-

-

0.1

Vietnam

-0.1

-

0.1

-

-

-

-

ROW

0.07

0.01

0.02

0.02

0.02

-

0.04

Source: USDA-WASDE August 10, 2017



Soybeans

Futures Market Reaction: September 2017 soybean futures were down 32 cents at $9.34 with a trading range for the day of $9.32 to $9.81.  November 2017 soybean futures closed down 33 cents at $9.40 ¼ with a trading range for the day of $9.38 ½ to $9.88 ½. Like corn, soybean future price declines were fueled by higher than expected yields. However, unlike corn global year-over-year stocks are projected to increase. More production risk in the US crop exists with soybeans than corn, however if yield projections are accurate a future decrease in soybean prices is likely.


USDA Summary: U.S. oilseed production for 2017/18 is projected up from last month mainly due to higher soybean production.  Soybean production is forecast at 4,381 million bushels, up 121 million on higher yields.  Harvested area is forecast at 88.7 million acres, unchanged from July.  The first survey-based soybean yield forecast of 49.4 bushels per acre is 1.4 bushels above last month but 2.7 below last year’s record.  With higher production and lower beginning stocks, soybean supplies for 2017/18 are projected at 4,777 million bushels, up 2 percent from last month.  U.S. soybean exports are raised 75 million bushels to 2,225 million on increased supplies and lower prices.  Crush is reduced on lower global soybean meal import demand.  Soybean ending stocks are projected at 475 million bushels, up 15 million from last month. The U.S. season-average soybean price for 2017/18 is forecast at $8.45 to $10.15 per bushel, down 10 cents at the midpoint.  The soybean meal price forecast of $295 to $335 per short ton is down $5.00 at the midpoint.  The soybean oil price is forecast at 31 to 35 cents per pound, up 1 cent on both ends of the range.

U.S. changes for 2016/17 include higher exports, lower crush, and lower ending stocks.  Soybean exports are raised 50 million bushels to 2,150 million on outstanding export sales and shipments through July.  With lower crush only partly offsetting higher exports, ending stocks are projected at 370 million bushels, down 40 million from last month.

Global oilseed production for 2017/18 is projected up mainly on an 85-million-bushel increase for soybean production.  The higher U.S. forecast was partly offset with a 55-million-bushel reduction for India based on the latest government planting data indicating lower harvested area.  Soybean and canola production is projected down for Canada, where hot and dry weather conditions in the Canadian Prairies lowered yield prospects for both crops, and excessive rainfall in eastern Canada led to a lower soybean harvested area estimate. 

 

Global soybean exports for 2017/18 are up 55 million bushels as higher U.S. exports are partly offset by lower Argentina shipments.  Beginning stocks for 2017/18 are raised based on lower crush and exports for Argentina for 2016/17.  Coupled with higher production, 2017/18 soybean ending stocks are increased 158 million bushels to 3.594 billion.

 

 

 

 

2013/14 

2014/15 

2015/16

2016/17 Est.

2017/18 Projected July

2017/18 Projected August

2017/18 Change From Previous Month

Change 2016/17 to 2017/18


Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

76.8

83.3

82.7

83.4

89.5

89.5

0.0

6.1

Acres Harvested (Million Acres)

76.3

82.6

81.7

82.7

88.7

88.7

0.0

6.0

U.S. Average Yield (Bu/Acre)

44.0

47.5

48

52.1

48

49.4

1.4

-2.7


Supply (Million Bushels)

Beg. Stocks

141

92

191

197

410

370

-40

173

Production

3,358

3,927

3,926

4,307

4,260

4,381

121

74

Imports

72

33

24

25

25

25

0

0

Total Supply

3,570

4,052

4,140

4,528

4,695

4,777

82

249


Use & Ending Stocks (Million Bushels)

Crushing

1,734

1,873

1,886

1,890

1,950

1,940

-10

50

Exports

1,638

1,842

1,942

2,150

2,150

2,225

75

75

Seed and Residual

107

146

115

118

135

136

1

18

Total Use

3,478

3,862

3,944

4,158

4,235

4,301

66

143

U.S. Ending Stocks

92

191

197

370

460

475

15

105

Foreign Stocks

2,211

2,658

2,635

3,193

2,976

3,117

141

-76


Price and Stocks to Use Ratio

U.S. Average Season Price ($/Bu)

$13.00

$10.10

$8.95

$9.50

$8.40-$10.40

$8.45-$10.15

-$0.10

-$0.20

U.S. Stocks/Use

2.65%

4.95%

4.99%

8.90%

10.86%

11.04%

0.18%

2.15%

Source: USDA-WASDE August 10, 2017

 

 


 

World Soybean Supply and Use (Million Bushels) 2017/18 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

3,563

12,763

5,437

11,040

12,615

5,555

3,593

US

370

4,381

25

1,940

2,076

2,225

475

Foreign

3,193

8,382

5,412

9,100

10,539

3,330

3,117

Argentina

1,306

2,094

55

1,648

1,813

294

1,349

Brazil

974

3,932

7

1,543

1,679

2,352

883

Paraguay

14

345

0

145

147

202

10

China

705

514

3,454

3,399

3,972

6

696

EU

29

93

536

559

619

7

32

Japan

9

10

121

86

129

0

11

Mexico

4

15

158

173

175

0

3

ROW

152

1,379

1,079

1,547

2,005

470

134


World Soybean Supply and Use (Million Bushels) 2017/18 August-July

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

81

83

-24

-65

-72

56

156

US

-40

121

-

-10

-9

75

15

Foreign

121

-37

-24

-55

-63

-19

141

Argentina

90

-

-

-24

-24

-18

133

Brazil

26

-

-

-

-

-

26

Paraguay

-

-

-

-

-

-

-

China

1

-

-

-

-

-

1

EU

-1

3

-7

-7

-7

-

2

Japan

-

-

-

-

-

-

-

Mexico

-

-

-

-

-

-

-

ROW

5

-40

-16

-24

-31

-1

-20

Source: USDA-WASDE August 10, 2017



Wheat

Futures Market Reaction: September 2018 wheat futures closed down 19 cents at $4.40 ½ with a trading range for the day of $4.39 ¼ to $4.62. July 2018 wheat futures closed down 16 ½ cents at $5.14 ¼ with a trading range for the day of $5.13 ½ to $5.33 ¼. Decreased domestic production due to drought in the Northern Plains was more than offset by increased foreign production. Projected global stocks are an all-time record of 9.726 billion bushels.

 

USDA Summary: Projected 2017/18 U.S. wheat supplies are decreased this month on lower production, down 21 million bushels to 1,739 million.  The August NASS production forecasts for durum and other spring wheat indicated a significant decline compared to last year, primarily due to continued severe drought conditions affecting the Northern Plains.  Partially offsetting this decrease is higher winter wheat production, on increased yields, with most of the production increase for white wheat.  Food use estimates for both 2016/17 and 2017/18 are reduced, based primarily on the August 1, NASS Flour Milling Products report.  The other wheat usage categories for 2017/18 are unchanged this month.  Projected 2017/18 ending stocks are decreased 5 million bushels to 933 million.  The 2017/18 season-average farm price is unchanged at the midpoint of $4.80 per bushel and the projected range remains at $4.40 to $5.20. 

Global 2017/18 wheat supplies increased significantly, primarily on a 316-million-bushel production increase in the Former Soviet Union (FSU).  Russian production is a record 2.848 billion bushels, surpassing last year’s record by 184 million.  Winter wheat yields are forecast higher for both Russia and Ukraine, based mainly on harvest results to date.  Additionally, spring wheat conditions have remained very favorable for both Russia and Kazakhstan, resulting in higher production forecasts.  Canadian wheat production is reduced 70 million bushels to 974 million on the increasing intensification of drought conditions in major production areas of the Prairie Provinces.  The increased FSU production more than offsets reduced production forecasts in Canada, EU, and U.S., raising 2017/18 global production by more than 184 million bushels to 27.308 billion.

Foreign 2017/18 trade is increased on higher exports for Russia, Ukraine, and Kazakhstan more than offsetting reductions in Canada and EU.  Projected imports are raised for several countries, led by Indonesia and Nigeria.  Total world consumption is projected higher, primarily on greater usage by Russia, Indonesia, and Nigeria.  Projected global ending stocks are 151 million bushels higher this month at 9.726 billion, which is a new record.

 

 

 

2013/14

2014/15

2015/16

2016/17 Est.

2017/18 Projected July

2017/18 Projected August

2017/18 Change From Previous Month

Change 2016/17 to 2017/18

 

Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

56.2

56.8

55

50.2

45.7

45.7

0

-4.5

Acres Harvested (Million Acres)

45.3

46.4

47.3

43.9

38.1

38.1

0

-5.8

U.S. Average Yield (Bu/Acre)

47.1

43.7

43.6

52.6

46.2

45.6

-0.6

-7


Supply (Million Bushels)

Beg. Stocks

718

590

752

976

1,184

1,184

0

208

Production

2,135

2,026

2,062

2,310

1,760

1,739

-21

-571

Imports

173

151

113

118

140

150

10

32

Total Supply

3,026

2,768

2,927

3,403

3,084

3,074

-10

-329


Use & Ending Stocks (Million Bushels)

Food

955

958

957

949

955

955

0

6

Seed

77

79

67

61

66

66

0

5

Feed

228

114

149

154

150

150

0

-4

Exports

1,176

864

778

1,055

975

975

0

-80

Total Use

2,436

2,015

1,951

2,219

2,146

2,141

-5

-78

U.S. Ending Stocks

590

752

976

1,184

938

933

-5

-251

Foreign Stocks

6,524

7,243

7,948

8,316

8,637

8,793

156

477


Price and Stocks to Use Ratio

U.S. Avg. Season Price ($/Bu)

$6.87

$5.99

$4.89

$3.89

$4.40-$5.20

$4.40-$5.20

$0.00

$0.95

U.S. Stocks/Use

24.22%

37.32%

50.03%

53.36%

43.71%

43.58%

-0.13%

-9.78%

Source: USDA-WASDE August 10, 2017

 


World Wheat Supply and Use (Million Bushels) 2017/18 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

9,500

27,307

6,590

5,167

27,082

6,611

9,726

US

1,184

1,739

150

150

1,166

975

933

Foreign

8,316

25,568

6,440

5,017

25,916

5,636

8,793

Argentina

19

643

0

4

220

423

19

Australia

328

863

6

165

294

698

205

Canada

254

974

17

118

309

753

182

EU

406

5,495

239

2,039

4,676

1,084

381

Brazil

82

191

265

18

430

37

71

China

4,093

4,777

110

478

4,262

29

4,688

Sel. Mideast

475

716

676

181

1,465

27

375

N. Africa

507

654

1,034

80

1,664

25

507

Pakistan

160

963

1

33

933

22

168

Southeast Asia

201

0

928

275

876

38

215

India

351

3,527

147

184

3,638

18

369

Russia

398

2,848

18

698

1,543

1,157

564

Kazakhstan

146

514

2

77

254

276

133

Ukraine

69

974

1

132

375

588

81

ROW

826

2,429

2,996

535

4,978

460

834


World Wheat Supply and Use (Million Bushels) 2017/18 August-July

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

19

197

49

49

65

55

150

US

-

-21

10

-

-5

0

-6

Foreign

18

217

39

49

70

55

156

Argentina

-

-

-

-

-

-

-

Australia

-

-

-

-

-

-

-

Canada

-9

-68

-

-11

-15

-55

-7

EU

8

-16

-

-

-

-18

11

Brazil

-

-15

7

-

-

-

-7

China

15

-

-

-

-

-

15

Sel. Mideast

6

-

-

-

1

-

5

N. Africa

6

-

-

-

-

-

6

Pakistan

-

-

-

-

-

-

-

Southeast Asia

6

-

18

15

22

-

2

India

-

-

-

-

-

-

-

Russia

-

202

-

37

37

37

129

Kazakhstan

-

37

-

-

-

18

18

Ukraine

-

92

-

-

-

73

18

ROW

-12

-15

13

8

25

-

-33

Source: USDA-WASDE August 10, 2017




2017 Estimated Returns - Non-Irrigated

The projected profitability outlook for the 2017 crop has been updated after the release of the August 12, USDA Supply & Demand reports. This report incorporates the projected production for this crop year and includes survey based yield estimates. The Tennessee estimates for 2017 are used in this profitability update. For 2017, Tennessee state average yields are currently estimated by the National Agricultural Statistics Service (NASS) to be corn 166 bu./acre, cotton 1036 lbs./acre, soybeans 45 bu./acre and wheat 72 bu./acre. Since milo and double crop soybeans are not projected, 90 bu./acre and 30 bu./acre respectively are still being used. Costs are based on the 2017 UT Extension Row Crop budgets with adjustments made based on current input prices. Prices used for 2017 are incorporating forward 2017 harvest prices. Milo prices are an estimate as very few quotes are available. Prices for corn and soybeans have worked their way lower since the last USDA report – Corn is 24 cents lower with soybeans 80 cents lower. Cotton prices have been variable but currently is 1.38 cents higher since the July report. Since wheat has been harvested and probably priced, I am using $4.70 bushel as more of an average price. Soybeans, corn, and wheat-soybeans are showing a profitable Net Return, with cotton based on an above average yield having narrowed the loss after all expenses to $11 per acre. It depends on a producer’s situation on what is showing to be the most profitable crop. Producers with cash rent or owned ground will want to look at Returns Over Variable Expenses as their land cost will be fixed and if their machinery cost are truly fixed and no equipment changes will be made. Producers with share rent will want to plug in their appropriate share rent if their equipment cost are fixed. Producers who may be making some equipment changes may want to look at Net Returns. This may be an opportunity to review marketing plans and decide whether to lock in a percentage of forward harvest prices. Visit with your supplier on input cost expectations. 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. I would like to point out the cotton price of 67.09 cents that is being used in the profitability outlook. The price of 67.09 cents is made up of a cash price of 62.09 cents and gin rebates (seed & hauling) of 5 cents. The cash price of 62.09 cents is composed of a loan rate of 49.49 cents and a 12.60 cent equity from the buyer. Note - When prices are low, cotton is redeemed out of the marketing loan program at the Adjusted World Price (AWP). This is effect helps create the loan option or equity price that producers receive. Currently, this price is in 12-13 cent range. Basically, this is a result of the way the cotton marketing loan program works. My observations and discussions with cotton buyers would indicate that when futures move above 70-73 cents, then the prices to the producers would start to move up penny for penny. 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 2017 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 - $ 97, Soybeans - $38, Corn - $121 (includes 170 units of N), Milo - $87, and Wheat/Soybeans - $93. 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 2017 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.

 


2017 Estimated Returns - Non-Irrigated

 

Cotton

Soybeans

Corn

Milo

Wheat/Soybeans

Yield

1036 lbs.

45 bu.

166 bu.

90 bu.

72 bu./32 bu.

Price (as of 8/10/17)

$0.6709 lb.

$9.45 bu.

$3.45 bu.

$3.15 bu.

$4.70 bu./$9.45 bu.

Revenue

$695

$425

$573

$284

$641

Variable Expenses

$404

$216

$308

$229

$374

Returns Over Variable

$291

$209

$265

$55

$266

Land Costs (25% of Revenue-25% crop insurance)

$172

$104

$140

$68

$157

Returns Over Variable and Land Costs

$119

$105

$125

-$13

$110

Fixed Costs
Depreciation & interest on machinery

$130

$62

$56

$62

$99

Returns Over Specified Costs

-$11

$42

$69

-$76

$11

Breakeven Price at Average Yield and Specified Cost

$0.68

$ 8.51

$3.04

$3.99

$4.88/8.74

 

 

 

2017 Estimated Returns - Irrigation

Considering irrigation, profitability is positive for soybeans considering variable, land and fixed cost. Returns Over Variable and Land Costs are positive for corn, cotton, and wheat-soybeans. Producers should look at these returns as what could be if no adjustments are made in their operation and consider that adjustments may need to be made in 2017 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 $28 per acre for corn, $24 per acre for cotton, and $18 per acre for soybeans and $15 per acre of irrigation repairs and maintenance. Fixed costs of $85 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.  For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton - $101, Soybeans - $37, Corn - $159 (includes 240 units of N), Milo - $103, and Wheat/Soybeans - $93. Cost of production will continue to be adjusted as information becomes available. Hopefully, we will see costs reduced or possibly suitable generic products 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 2017 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.



2017 Estimated Returns – Irrigation

 

Cotton

Soybeans

Corn

Milo

Wheat/Soybeans

Yield

1100 lbs.

60 bu.

190 bu.

130 bu.

72 bu./45 bu.

Price (as of 8/10/17)

$0.6709 lb.

$9.45 bu.

$3.45 bu.

$3.15 bu.

$4.70 bu./$9.45 bu.

Revenue

$738

$567

$656

$410

$764

Variable Expenses( include energy cost)

$450

$250

$402

$291

$409

Fixed Irrigation Costs per Acre

$85

$85

$85

$85

$85

Returns Over Variable & Fixed IR Costs

$203

$232

$168

$34

$270

Land Costs (25% of Revenue-25% crop insurance-25% fixed irrigation costs)

 

$161

$118

$139

$78

$166

Returns Over Variable, IR Fixed Cost and Land Costs

$42

$113

$29

-$45

$104

Fixed Costs- management labor,
depreciation & interest on machinery

$145

$77

$71

$77

$114

Returns Over Specified Costs

-$103

$36

-$42

-$122

-$10

Breakeven Price at Average Yield and Specified Cost

$0.76

$8.85

$3.67

$4.09

$4.88/$9.58


 



 

Past Monthly Comments: