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 2018 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 Extension2019 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 2019 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 Danny Morris.
 

 


 

November 8, 2019 - USDA World Supply and Demand Estimates

 

Corn

Market Reaction: December 2019 corn futures closed up 2 cents for the day at $3.77 ¼ with a trading range for the day of $3.72 ½ to $3.83 ¾. March 2020 corn futures closed up 2 ¾ cents at $3.86 ½ with a trading range for the day of $3.81 to $3.92 ¼. The USDA reduced yields and may need further reductions with cold wet weather across most of the Corn Belt. On the November 4 Crop Progress report the USDA estimated 52% of corn harvested nationally. Further decreases in production should be supportive to corn prices near $4.00.

USDA Summary: This month’s 2019/20 U.S. corn outlook is for lower production, reduced use, and smaller ending stocks.  Corn production is forecast at 13.661 billion bushels, down 118 million from last month on a 1.4-bushel reduction in yield to 167.0 bushels per acre.  Feed and residual use is down 25 million bushels based on a smaller crop and higher expected prices.  Exports are reduced reflecting the slow pace of early-season sales and shipments.  Corn used for ethanol is down 25 million bushels based on September data from the Grain Crushings and Co-Products Production report and weekly ethanol production data as reported by the Energy Information Administration for the month of October.  With supply falling more than use, corn ending stocks are lowered 18 million bushels from last month.  The season-average corn price received by producers is raised 5 cents to $3.85 per bushel based on observed prices to date.

Global coarse grain production for 2019/20 is forecast lower.  This month’s 2019/20 foreign coarse grain outlook is for larger production, increased trade, and lower stocks relative to last month.  Foreign corn production is forecast higher as increases for several African countries, as well as Russia and Turkey, more than offset declines for Mexico, Ukraine, and the EU.  For Mexico, production is lowered as area for summer season corn is expected to be the lowest on record.  Yield forecasts for Russia and Ukraine are raised and lowered, respectively, based on observed harvest results to date. Corn exports are raised for Brazil and Russia, with reductions for the United States and Mexico.  For 2018/19, corn exports for Brazil are raised for the local marketing year beginning March 2019, based on shipments observed through October.  For 2019/20, corn imports are raised for Vietnam, Colombia, Japan, and South Korea.  Partly offsetting, are reductions for Iran, Egypt, Malaysia, and Turkey.  Foreign corn ending stocks are lower relative to last month, with declines for Brazil, Iran, Mexico, China, and Argentina that are partly offset by small increases for several African countries.  Global corn ending stocks, at 296.0 million tons, are down 6.6 million.


 

2015/16

2016/17

2017/18

2018/19 Est

2019/20 Projected October

2019/20 Projected November

2019/20 Change From Previous Month

Change 2018/19 to 2019/20


Planted and Harvested Acres & Yield

Planted (Million Acres)

88.0

94

90.2

89.1

89.9

89.9

0.0

0.8

Harvested (Million Acres)

80.8

86.7

82.7

81.7

81.8

81.8

0.0

0.1

U.S. Average Yield (Bu/Acre)

168.4

174.6

176.6

176.4

168.4

167

-1.4

-9.4


Supply (Million Bushels)

Beg. Stocks

1,731

1,737

2,293

2,140

2,114

2,114

0

-26

Production

13,602

15,148

14,609

14,420

13,779

13,661

-118

-759

Imports

68

57

36

28

50

50

0

22

Total Supply

15,401

16,942

16,939

16,588

15,944

15,825

-119

-763


Use & Ending Stocks (Million Bushels)

Feed and Residual

5,114

5,470

5,304

5,618

5,300

5,275

-25

-343

Ethanol

5,224

5,432

5,605

5,376

5,400

5,375

-25

-1

Food, Seed & Industrial

1,424

1,453

1,452

1,415

1,415

1,415

0

0

Exports

1,901

2,294

2,438

2,065

1,900

1,850

-50

-215

Total Use

13,664

14,649

14,798

14,474

14,015

13,915

-100

-559

U.S. Ending Stocks

1,737

2,293

2,140

2,114

1,929

1,910

-19

-204

Foreign Stocks

10,523

11,515

11,312

10,486

9,982

9,741

-241

-745


Price and Stocks to Use Ratio

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

$3.61

$3.36

$3.36

$3.61

$3.80

$3.85

$0.05

$0.24

U.S. Stocks/Use

12.71%

15.65%

14.46%

14.61%

13.76%

13.73%

-0.04%

-0.88%

Source: USDA-WASDE November 8, 2019



World Corn Supply and Use (Million Bushels) 2019/20 Current Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

12,600

43,390

6,592

27,356

44,339

6,576

11,651

United States

2,114

13,661

50

5,275

12,065

1,850

1,911

Total Foreign

10,486

29,729

6,542

22,082

32,274

4,727

9,741

        Argentina

142

1,968

0

405

591

1,319

202

        Brazil

200

3,976

39

2,205

2,598

1,417

200

        Russia

10

551

2

295

331

224

8

        South Africa

72

551

4

260

484

59

83

        Ukraine

36

1,398

1

169

220

1,181

33

        Egypt

72

252

390

559

657

0

56

        E.U.

297

2,542

827

2,441

3,248

79

339

        Japan

57

0

630

488

634

0

53

        Mexico

195

984

689

1,035

1,744

31

93

        Southeast Asia

104

1,217

705

1,571

1,878

29

119

        South Korea

76

3

425

335

429

0

75

        Canada

102

551

39

335

539

59

94

        China

8,319

9,999

276

7,401

10,905

1

7,689

ROW

804

5,736

2,516

4,582

8,015

327

698

World Corn Supply and Use (Million Bushels) 2019/20: Current - Previous Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

-156

-73

53

41

31

18

-259

United States

-

-118

-

-25

-50

-50

-18

Total Foreign

-156

46

53

66

80

68

-241

        Argentina

-19

-

-

-

-

-

-19

        Brazil

-87

-

-

-

-39

79

-126

        Russia

-

20

-

-

-

20

-

        South Africa

-6

-

-

-

-

-

-6

        Ukraine

-

-20

-

-20

-20

-

-

        Egypt

-11

-

-12

-

-

-

-23

        E.U.

-

-9

-

-

-

-

-9

        Japan

2

0

16

20

20

-

-2

        Mexico

-12

-79

-

-28

-35

-28

-28

        Southeast Asia

-4

-

39

39

39

-

-4

        South Korea

2

-

12

12

12

-

2

        Canada

-

-

-

-

-

-

-

        China

-20

-

-

-

-

-

-20

ROW

-1

133

-2

42

104

-3

-6

Source: USDA-WASDE November 8, 2019 

Cotton

Market Reaction: December 2019 cotton futures closed up 0.37 cents at 64.72 with a trading range for the day of 63.61 to 65.06 cents. March 2020 cotton futures closed up 0.53 cents at 66.57 with a trading range for the day of 65.50 to 66.93 cents. Global and domestic stock reductions and a decrease in estimated average US yield were supportive to prices, however for cotton prices to improve to near 70 cents exports will need to accelerate and US ending stocks approach 5 million bales.

USDA Summary: This month’s 2019/20 U.S. cotton estimates include lower production and ending stocks due to a smaller crop in the Southwest.  While the U.S. production forecast is reduced 4 percent, to 20.8 million bales, domestic mill use and exports are unchanged.  U.S. ending stocks are now 900,000 bales lower at 6.1 million but, at 31 percent, are still forecast at their highest share of use since 2008/09.  The marketing-year average price received by upland producers is forecast at 61 cents per pound, 5 percent (3 cents) above the October forecast, but 13 percent lower than the final 2018/19 price of 70.3 cents.

This month’s 2019/20 world cotton forecasts include lower production, lower ending stocks and higher world trade.  World production is reduced nearly 3.0 million bales, with reductions occurring primarily in the United States, Pakistan, India, and China. There are also smaller declines in the production estimates for Turkey and Turkmenistan.  World trade is forecast 1.1 million bales higher, with higher imports by Turkey, Pakistan, and India more than offsetting a 200,000-bale decline in Indonesia.  Higher exports are projected from Brazil, Malaysia, Benin, Greece, India, and several smaller countries. With little change from the previous month in beginning stocks or consumption, world 2019/20 cotton ending stocks are projected nearly 3.0 million bales lower this month.  At 80.8 million bales, world ending stocks in 2019/20 are forecast nearly unchanged from 2018/19.


 

2015/16

2016/17

2017/18

2018/19 Est

2019/20 Projected October

2019/20 Projected November

2019/20 Change From Previous Month

Change 2018/19 to 2019/20


Planted and Harvested Acres & Yield

Planted (Million Acres)

8.58

10.07

12.72

14.1

13.76

13.76

0

-0.34

Harvested (Million Acres)

8.07

9.51

11.1

10.21

12.51

12.51

0

2.3

U.S. Average Yield (lb/acre)

766

867

905

864

833

799

-34

-65


Supply (Million Bales)

Beg. Stocks

3.65

3.8

2.75

4.2

4.85

4.85

0

0.65

Production

12.89

17.17

20.92

18.37

21.71

20.82

-0.89

2.45

Imports

0.03

0.01

0

0

0.01

0.01

0

0.01

Total Supply

16.57

20.98

23.68

22.57

26.56

25.67

-0.89

3.1


Use & Ending Stocks (Million Bales)

Domestic

3.45

3.25

3.23

2.98

3

3

0

0.02

Exports

9.15

14.92

16.28

14.76

16.5

16.5

0

1.74

Total Use

12.6

18.17

19.5

17.74

19.5

19.5

0

1.76

U.S. Ending Stocks

3.8

2.75

4.2

4.85

7

6.1

-0.9

1.25

Foreign Stocks

91.11

77.65

76.74

75.7

76.69

74.7

-1.99

-1

Chinese Stocks

58.2

45.92

37.99

35.67

33.25

32.75

-0.5

-2.92


Price and Stocks to Use Ratio

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

$0.61

$0.68

$0.686

$0.703

$0.58

$0.61

$0.03

-$0.09

U.S. Stocks/Use

30%

15%

22%

27%

36%

31%

-5%

4%

Chinese Stocks/Use

166%

119%

93%

90%

84%

83%

-1%

-7%

Source: USDA-WASDE Novemer 8, 2019

 

World Cotton Supply and Use (Million 480 lb Bales) 2019/20 Current Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

80.55

121.94

44.03

121.49

44.03

0.2

80.8

United States

4.85

20.82

0.01

3

16.5

0.07

6.1

Total Foreign

75.7

101.12

44.03

118.49

27.53

0.13

74.7

       Central Asia

2.47

5.25

0

4.04

1.53

0

2.15

       Afr. Fr. Zone

1.37

5.89

0

0.14

5.66

0

1.46

       Australia

1.57

1.2

0

0.04

1.7

0

1.04

       Brazil

11.78

11.6

0.03

3.4

8.6

0

11.41

       India

10.01

30

1.8

24.5

4.1

0

13.21

       Mexico

0.77

1.58

0.85

2

0.45

0.03

0.72

       China

35.67

27.25

9.5

39.5

0.18

0

32.75

       E.U.

0.23

1.86

0.65

0.69

1.76

0.03

0.26

       Turkey

1.59

3.8

3.8

7.1

0.35

0

1.74

       Pakistan

2.5

7

3.6

10.7

0.1

0.03

2.27

       Indonesia

0.53

0

3.1

3.1

0.01

0

0.53

       Thailand

0.18

0

1.05

1.03

0

0.03

0.18

       Bangladesh

1.78

0.14

7.3

7.4

0

0.01

1.81

       Vietnam

1.19

0

7.5

7.4

0

0

1.29

ROW

4.06

5.55

4.84

7.45

3.09

0.00

3.88

World Cotton Supply and Use (Million 480 lb Bales) 2019/20: Current-Previous Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

-0.18

-2.83

1.13

-0.12

1.12

0.01

-2.89

United States

-

-0.89

-

-

-

0.01

-0.9

Total Foreign

-0.18

-1.95

1.13

-0.12

1.12

-

-1.99

       Central Asia

-0.05

-0.15

-

0.05

-

-

-0.25

       Afr. Fr. Zone

-

-

-

-

0.25

-

-0.25

       Australia

-

-

-

-

-

-

-

       Brazil

-0.23

-

-

-

0.3

-

-0.53

       India

-0.02

-0.5

0.2

-0.25

0.1

-

-0.17

       Mexico

-

-

-

-

-

-

-

       China

-

-0.5

-

-

-

-

-0.5

       E.U.

-0.01

0.1

-0.03

-0.02

0.09

-

-0.01

       Turkey

-0.1

-0.3

0.6

0.2

-

-

-

       Pakistan

-

-0.6

0.5

-

0.05

-

-0.15

       Indonesia

0.02

-

-0.2

-0.1

-

-

-0.08

       Thailand

-

-

-

-

-

-

-

       Bangladesh

-

-

-

-

-

-

-

       Vietnam

-

-

-

-

-

-

-

ROW

0.21

0.01

0.06

-

0.33

-

-0.05

Source: USDA-WASDE November 8, 2019


 

 
 

Soybeans


Futures Market Reaction: January 2020 soybean futures were down 5 ½ cents for the day closing at $9.31 with a trading range for the day of $9.26 ½ to $9.38 ¾. November 2020 soybean futures closed down 5 cents at $9.67 ¼ with a trading range for the day of $9.63 ½ to $9.74 ½. Limited changes to soybean estimates both domestically and globally. Reductions in yield and harvested acres may occur on future reports due to weather challenges.

USDA Summary: The U.S. soybean outlook is for slightly lower production, reduced crush, and higher ending stocks.  Soybean production is forecast at 3.55 billion bushels, down less than 1 million on fractionally lower yields and unchanged harvested area.  Soybean crush is reduced 15 million bushels to 2.11 billion on lower-than expected early-season crush and reduced soybean meal export prospects.  With reduced crush, soybean ending stocks are projected at 475 million bushels, up 15 million. The U.S. season-average soybean price for 2019/20 is forecast at $9.00 per bushel, unchanged from last month.  The soybean meal price forecast is also unchanged at $325.00 per short ton.  The soybean oil price is forecast at $0.31 per pound, up $0.01 from last month on sharply higher reported prices through October.

The foreign oilseed supply and demand forecasts for 2019/20 include lower production, crush, and stocks, compared with last month.  Foreign production is forecast down on lower soybean, cottonseed, sunflowerseed, and rapeseed production.  Soybean production for India is reduced 73 million bushels to 331 million on lower yields resulting from excessive late-season rainfall.  Soybean production is also reduced for Canada on lower yields.  Other production changes include lower sunflowerseed production for Argentina and lower rapeseed production for Australia and the European Union.  Foreign soybean crush changes for 2019/20 include reductions for India, China, and Canada.  Foreign soybean ending stocks for 2019/20 are reduced with lower projections for Argentina, Canada, and India only partly offset with higher forecasts for Brazil and Egypt.



 

2015/16

2016/17

2017/18

2018/19 Est

2019/20 Projected October

2019/20 Projected November

2019/20 Change From Previous Month

Change 2018/19 to 2019/20


Planted and Harvested Acres & Yield

Planted (Million Acres)

82.7

83.5

90.2

89.2

76.5

76.5

0.0

-12.7

Harvested (Million Acres)

81.7

82.7

89.5

87.6

75.6

75.6

0.0

-12.0

U.S. Average Yield (Bu/Acre)

48

51.9

49.3

50.6

46.9

46.9

0.0

-3.7


Supply (Million Bushels)

Beg. Stocks

191

197

302

438

913

913

0

475

Production

3,926

4,296

4,412

4,428

3,550

3,550

0

-878

Imports

24

22

22

14

20

20

0

6

Total Supply

4,140

4,516

4,735

4,880

4,483

4,483

0

-397


Use & Ending Stocks (Million Bushels)

Crushing

1,886

1,901

2,055

2,092

2,120

2,105

-15

13

Exports

1,942

2,166

2,134

1,748

1,775

1,775

0

27

Seed and Residual

115

147

109

128

128

128

0

0

Total Use

3,944

4,214

4,297

3,967

4,023

4,008

-15

41

U.S. Ending Stocks

197

302

438

913

460

475

15

-438

Foreign Stocks

2,687

3,213

3,204

3,117

3,038

3,031

-7

-86


Price and Stocks to Use Ratio

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

$8.95

$9.47

$9.33

$8.48

$9.00

$9.00

$0.00

$0.52

U.S. Stocks/Use

4.99%

7.17%

10.19%

23.01%

11.43%

11.85%

0.42%

-11.16%

Source: USDA-WASDE November 8, 2019


World Soybean Supply and Use (Million Bushels) 2019/2020 Current Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

4,029

12,366

5,458

11,123

12,846

5,502

3,506

United States

913

3,550

20

2,105

2,233

1,775

475

Total Foreign

3,117

8,817

5,438

9,018

10,612

3,727

3,031

        Argentina

1,062

1,947

143

1,617

1,878

323

951

        Brazil

1,080

4,519

7

1,608

1,710

2,793

1,104

        Paraguay

6

375

0

143

146

228

7

        China

712

628

3,123

3,105

3,755

5

704

        E.U.

40

96

559

584

645

9

39

        S.E. Asia

38

24

363

166

373

1

50

        Mexico

7

8

213

219

220

0

8

ROW

172

1,219

1,029

1,576

1,885

368

168

World Soybean Supply and Use (Million Bushels) 2019/20: Current-Previous Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

-8

-89

16

-92

-101

13

8

United States

-

-

-

-15

-15

-

15

Total Foreign

-8

-88

16

-77

-86

13

-7

        Argentina

-11

-

-

-

-2

29

-39

        Brazil

20

-

-

-

-

-18

38

        Paraguay

-

-

-

-

-

-

-

        China

-13

-

-

-18

-18

-

5

        E.U.

-2

-

4

-

-

1

1

        S.E. Asia

-

-

-

-

-

-

-

        Mexico

-

-

-

-

-

-

-

ROW

-1

-89

12

-58

-65

1

-12

Source: USDA-WASDE November 8, 2019
 
 

Wheat

Futures Market Reaction: December 2019 wheat futures closed down 2 ¼ cents at $5.10 ¼ with a trading range for the day of $5.05 ½ to $5.17 ¾. July 2020 wheat futures closed down 2 ½ cents at $5.24 with a trading range for the day of $5.20 ¼ to $5.30 ¾.  Global wheat stocks are now projected to exceed 10.5 billion bushels. Without stock reductions via a production failure in a key production region wheat prices will have a hard time improving beyond the current $4.80-$5.50 price range.

USDA Summary: The outlook for 2019/20 U.S. wheat this month is for smaller supplies, reduced domestic use, and lower stocks.  Wheat supplies are decreased 42 million bushels, based on updated production estimates for the States resurveyed following the NASS Small Grains Summary, issued September 30.  Adjustments to production in these States, where significant acreage remained unharvested in early September, lowers production estimates for Hard Red Spring wheat, White wheat, and Durum with most reductions occurring in North Dakota and Montana.  Estimated seed use is reduced 7 million bushels to 61 million, reflecting a projected 2020/21 all wheat planted acreage of 45.0 million.  Food use is lowered 5 million bushels to 955 million, primarily based on the NASS Flour Milling Products report, issued November 1.  Projected 2019/20 wheat stocks are reduced 30 million bushels to 1,014 million.  The season-average farm price is reduced $0.10 per bushel to $4.60, based on NASS prices reported to date and expectations for cash and futures prices the remainder of the 2019/20 marketing year.

The global outlook for wheat this month is for higher supplies, increased exports, fractionally greater consumption, and higher ending stocks.  Supplies are raised with increased production forecasts for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia.  EU and Russia production forecasts are raised to 5.622 and 2.719 billion bushels, respectively, on updated harvest results.  Australia’s production is lowered to 632 million bushels on further damage from the continent’s severe drought and is now forecast lower than last year’s drought-affected crop.  Argentina’s production is reduced to 735 million bushels on dry conditions but remains record large.  World exports are raised by 37 million bushels to 6.64 billion on increases for the EU, Russia, and Ukraine more than offsetting reductions for Argentina and Australia.  Global consumption is nearly unchanged at 27.749 billion bushels, which is 3 percent greater than last year.  With global supplies rising more than consumption, 2019/20 ending stocks are raised to a record 10.593 billion bushels with China comprising 51 percent of the total.
 

 

2015/16

2016/17

2017/18

2018/19  Est.

2019/20 Projected October

2019/20 Projected November

2019/20 Change From Previous Month

Change 2018/19 to 2019/20

 

Planted and Harvested Acres & Yield

Planted (Million Acres)

55

50.1

46.1

47.8

45.2

45.2

0

-2.6

Harvested (Million Acres)

47.3

43.8

37.6

39.6

38.1

37.2

-0.9

-2.4

U.S. Average Yield (Bu/Acre)

43.6

52.7

46.4

47.6

51.6

51.7

0.1

4.1


Supply (Million Bushels)

Beg. Stocks

752

976

1,181

1,099

1,080

1,080

0

-19

Production

2,062

2,309

1,741

1,885

1,962

1,920

-42

35

Imports

113

118

158

135

120

120

0

-15

Total Supply

2,927

3,402

3,080

3,119

3,161

3,120

-41

1


Use & Ending Stocks (Million Bushels)

Food

957

949

964

955

960

955

-5

0

Seed

67

61

63

59

68

61

-7

2

Feed

149

160

47

90

140

140

0

50

Exports

778

1,051

906

936

950

950

0

14

Total Use

1,951

2,222

1,981

2,039

2,118

2,106

-12

67

U.S. Ending Stocks

976

1,181

1,099

1,080

1,043

1,014

-29

-66

Foreign Stocks

7,944

8,457

9,290

9,131

9,531

9,578

47

447


Price and Stocks to Use Ratio

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

$4.89

$3.89

$4.72

$5.16

$4.70

$4.60

-$0.10

-$0.56

U.S. Stocks/Use

50.03%

53.15%

55.48%

52.97%

49.24%

48.15%

-1.1%

-4.8%

Source: USDA-WASDE November 8, 2019


World Wheat Supply and Use (Million Bushels) 2019/20 Current Month

 

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

 

World

10,211

28,129

6,486

5,455

27,748

6,639

10,592

 

United States

1,080

1,920

120

140

1,156

950

1,014

 

Total Foreign

9,131

26,209

6,367

5,315

26,592

5,689

9,578

 

        Argentina

71

735

0

2

222

514

69

 

        Australia

182

632

6

184

312

331

177

 

        Canada

218

1,213

17

165

349

900

197

 

        E.U.

367

5,622

202

2,058

4,685

1,066

441

 

        Russia

287

2,719

18

625

1,451

1,268

305

 

        Ukraine

58

1,066

3

121

345

735

46

 

        Bangladesh

35

40

220

11

265

0

31

 

        Brazil

39

195

283

18

448

22

46

 

        China

5,136

4,850

118

772

4,703

48

5,352

 

        Japan

36

35

217

26

239

10

38

 

        N. Africa

568

693

1,007

83

1,718

33

518

 

        Nigeria

7

2

187

2

175

15

7

 

        Sel. Mideast

432

833

628

144

1,434

26

433

 

        S.E. Asia

181

0

996

295

949

39

189

 

        India

624

3,755

1

220

3,601

18

761

 

        Kazakhstan

62

423

2

66

243

191

53

 

ROW

828

3,397

2,463

524

5,452

473

915

 

World Wheat Supply and Use (Million Bushels) 2019/20: Current - Previous Month

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

8

12

31

0

2

37

18

United States

-

-42

-

-

-12

-

-30

Total Foreign

8

53

32

-

14

37

47

        Argentina

4

-18

-

-

-

-18

4

        Australia

-

-29

-

-

-

-18

-11

        Canada

-

-

-

-

-

-

-

        E.U.

-

37

-

-

-

37

-

        Russia

-16

55

-

-

-

18

21

        Ukraine

-

11

-

-

-

18

-7

        Bangladesh

10

-

-

-

-

-

10

        Brazil

-

-

-

-

-

-

-

        China

-

-

-

-

-

-

-

        Japan

-

-

-

-

-

-

-

        N. Africa

-

-

-

-

-

-

-

        Nigeria

-

-

-

-

-

-

-

        Sel. Mideast

15

8

-7

-

-

-

16

        S.E. Asia

-

-

-

-

-

-

-

        India

-4

-

-

-

-

-

-4

        Kazakhstan

-6

-

-

-

-

-

-6

ROW

5

-10

39

-

14

-

25

Source: USDA-WASDE November 8, 2019
 

2019 Estimated Returns - Non-Irrigated


The profitability outlook has been updated after the release of the November, 2019 USDA WASDE reports. The vast majority of the corn crop has been harvested with record level yields being reported from nearly every producer. Soybeans and cotton harvest continues to progress as well. In many counties, there is still quite a bit of cotton in the field. Soybean yields appear to be slightly above average with most preliminary cotton yields being very good thus far. Yields used for non- irrigated estimates are a 5 year Tennessee state average year of 164 bushels per acre for corn, 47 bushels per acre for full-season soybeans, 1023 pounds per acre cotton, and 68 bushels per acre wheat. Prices used for grain sales are based on 2019 harvest cash bids as reported by the USDA Tennessee Cash Grain report dated November 11, 2019. The price of $0.58 per lb. of cotton is based on a cotton loan price of $0.52 and an assumed $0.06 cotton equity. Based on these yields and prices, all crops are projected to have positive net returns over variable, land, and fixed costs with the exception of cotton. Corn and soybeans are projected to earn a profit due to recent increases in futures prices. However, cotton and a double crop mix for wheat and soybeans is anticipated to result in a loss. Producers with higher yields for corn will likely have a much higher net return over all costs. However, final yields for 2019 have not yet been established. Cotton profitability continues to remain low due to depressed prices and relatively low cotton equities. Although the double crop mix is currently showing a loss, there has been Costs are based on the 2019 UT Extension Row Crop budgets with adjustments made where warranted. 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. 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. The projected cotton price assumes no gin rebates (seed & hauling) in 2019. Gin rebates for seed and hauling are an estimate as those are generally not known until harvest time and could be in the range of 0 to 5 cents. 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 2019 to be sustainable. These estimates do not consider any USDA or crop insurance payments from the new farm bill, including MFP payments. 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 - $ 111, Soybeans - $52, Corn - $148 (includes 180 units of N), and Wheat/Soybeans - $106. These cost reflect a slight increase from 2018 to 2019 along with micronutrients where warranted. Operating expenses 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 with resistant weeds. Production costs are estimates based on the 2019 University of Tennessee Crop Budgets with adjustments made where needed. Please visit with your farm supplier on estimated costs for your operation. 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. A whole farm financial plan can be completed for you for free by your Area Farm Management Specialist.



 

Cotton

Soybeans

Corn

Wheat/Soybeans

Yield

1023 lbs.

47 bu.

164 bu.

68 bu./35 bu.

Price (as of 11/11/2019)

$0.58 lb.

$9.22 bu.

$3.77 bu.

$5.33 bu./$9.22

Revenue

$593

$433

$619

$685

Variable Expenses

$475

$246

$371

$455

Returns Over Variable

$118

$187

$248

$230

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

$145

$106

$152

$168

Returns Over Variable and Land Costs

($27)

$81

$95

$62

Fixed Costs (Capital Recovery and Management Labor)

$110

$65

$64

$114

Returns Over Specified Costs

($137)

$16

$31

($52)

Breakeven Price at Average Yield and Specified Cost

$0.76

$8.76

$3.52

$6.15/$9.60

  

2019 Estimated Returns - Irrigation

Considering irrigation, Returns Over Specific Costs are negative for all principal row crops. However, the corn, soybeans, and a double crop of wheat and soybeans do result in a positive return over variable, irrigation, and land costs. An individual producer's machinery and equipment costs will have a strong influence on profitability. 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 2019 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. Note that due to an increase in dryland cotton and corn 5-year state average yields, irrigated yields have been increased in this projection over the previous year. Irrigation fixed costs and energy costs will vary greatly among producers and systems. These projections include: variable expenses energy costs for irrigation of $32 per acre for corn, $27 per acre for cotton, and $20 per acre for soybeans. Irrigation repairs and maintenance are estimated at $16 per acre for corn, $13 per acre for cotton, and $10 per acre for soybeans. Fixed costs of $86 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 - $115, Soybeans - $57, Corn - $198 (includes 240 units of N), and Wheat/Soybeans - $106. 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 2019 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 – Capital Recovery and Management Labor. 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. A whole farm financial plan can be completed for you for free by your Area Farm Management Specialist.

 

 

Cotton

Soybeans

Corn

Wheat/Soybeans

Yield

1200 lbs.

60 bu.

210 bu.

68 bu./45 bu.

Price (as of 11/11/2019)

$0.58 lb.

$9.22 bu.

$3.77 bu.

$5.33 bu./$9.22 bu.

Revenue

$696

$553

$792

$777

Variable Expenses(includes energy cost)

$475

$289

$489

$455

Fixed Irrigation Costs per Acre

$86

$86

$86

$86

Returns Over Variable & Fixed IR Costs

$135

$178

$217

$236

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

$207

$132

$189

$177

Returns Over Variable, IR Fixed Cost and Land Costs

($72)

$46

$28

$59

Fixed Costs (Capital Recovery and Management Labor)

$125

$81

$84

$114

Returns Over Specified Costs

($197)

($35)

($56)

($55)

Breakeven Price at Average Yield and Specified Cost

$0.75

$9.80

$4.04

$5.82/$9.70


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