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.
 

 


 

May 12, 2020 - USDA World Supply and Demand Estimates

 

Corn

Market Reaction: July 2020 corn futures closed up 3 ¾ cents for the day at $3.22 ¼ with a trading range for the day of $3.14 ½ to $3.24. December 2020 corn futures closed up 1 cent at $3.35 ¾ with a trading range for the day of $3.30 ¾ to $3.37 ½. The supply numbers for corn will keep prices depressed for 2010, if they are realized. However, there is still a lot of time between now and harvest for projections to change. Reductions in acres planted and yield are possible. Recovery of demand lost to the COVID-19 economic slowdown will also be a very important factor if prices are able to recover. Brining idled ethanol plants back on line would be supportive to prices.

USDA Summary:  The U.S. feed-grain outlook for 2020/21 is for record high production and domestic use, greater exports, and larger ending stocks.  The corn crop is projected at a record 16.0 billion bushels, up from last year on increased area and a return to trend yield.  The yield projection of 178.5 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2019 time period.  Despite beginning stocks that are down slightly from a year ago, total corn supplies are forecast record high at 18.1 billion bushels. Total U.S. corn use in 2020/21 is forecast to rise relative to a year ago with increases for domestic use and exports.  Food, seed, and industrial (FSI) use is projected to rise 245 million bushels to 6.6 billion.  Corn used for ethanol is projected to increase from the 2019/20 COVID-19 reduced levels, based on expectations of a rebound in U.S. motor gasoline consumption. Corn feed and residual use is projected higher mostly reflecting a larger crop and lower expected prices. U.S. 2020/21 corn exports are forecast to rise 375 million bushels to 2,150 million, driven by growth in world corn trade.  U.S. market share is expected to increase from the 2019/20 multi-year low, but remains below the average level seen during 2015/16 to 2019/20 with expected competition from Argentina, Brazil, and Ukraine. With total U.S. corn supply rising more than use, 2020/21 U.S. ending stocks are up 1.2 billion bushels from last year and if realized would be the highest since 1987/88.  Stocks relative to use at 22.4 percent would be the highest since 1992/93.  With larger stocks relative to use, the season-average farm price is projected at $3.20 per bushel, down 40 cents from 2019/20 and the lowest since 2006/07.

The global coarse grain outlook for 2020/21 is for record production and use and larger ending stocks.  World corn production is forecast record-high, with the largest increases for the United States, Brazil, Ukraine, Mexico, and Canada.  Global corn use is expected to grow 4 percent, with foreign consumption up 3 percent.  Global corn imports are projected to increase 4 percent.  Notable forecast increases in corn imports include the EU, Egypt, Mexico, Iran, Morocco, and Vietnam.  Global corn ending stocks are up from a year ago, as a decline in foreign stocks is more than offset by an increase for the United States.  Excluding China and the United States, ending stocks are up 4 percent relative to a year ago. For China, total coarse grain imports are forecast up, but below the 2014/15 record.  Since 2001/02, China’s largest individual coarse grain import total occurred during 2014/15.  Over that same time period realized corn imports reached a high of 217 million bushels.  Expectations are for robust demand from China in 2020/21, with 276 million bushels of corn imports from all sources.


 

2016/17

2017/18

2018/19

2019/20 Projected April

2019/20 Est May

2019/20 Change From Previous Month

2020/21 Projected May

Change 2019/20 to 20/21

 

Planted and Harvested Acres & Yield

Planted (Million)

94

90.2

88.9

89.7

89.7

0.0

97.0

7.3

Harvested (Million)

86.7

82.7

81.3

81.5

81.4

-0.1

89.6

8.2

U.S. Avg. Yield (Bu/Acre)

174.6

176.6

176.4

168

167.8

-0.2

178.5

10.7

 

Supply (Million Bushels)

Beg. Stocks

1,737

2,293

2,140

2,221

2,221

0

2,098

-123

Production

15,148

14,609

14,340

13,692

13,663

-29

15,995

2,332

Imports

57

36

28

45

45

0

25

-20

Total Supply

16,942

16,939

16,509

15,957

15,928

-29

18,118

2,190

 

Use & Ending Stocks (Million Bushels)

Feed and Residual

5,470

5,304

5,430

5,675

5,700

25

6,050

350

Ethanol

5,432

5,605

5,378

5,050

4,950

-100

5,200

250

Food, Seed & Industrial

1,453

1,452

1,415

1,415

1,405

-10

1,400

-5

Exports

2,294

2,438

2,065

1,725

1,775

50

2,150

375

Total Use

14,649

14,798

14,288

13,865

13,830

-35

14,800

970

U.S. Ending Stocks

2,293

2,140

2,221

2,092

2,092

0

3,318

1,226

Foreign Stocks

11,515

11,308

10,413

9,843

10,292

449

10,052

-240

 

Price and Stocks to Use Ratio

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

$3.36

$3.36

$3.61

$3.60

$3.60

$0.00

$3.20

-$0.40

U.S. Stocks/Use

15.65%

14.46%

15.54%

15.09%

15.13%

0.04%

22.42%

7.3%

Source: USDA-WASDE May 12, 2020



World Corn Supply and Use (Million Bushels) 2020/21 Current Year

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

12,390

46,724

6,937

28,700

45,744

7,175

13,370

United States

2,098

15,995

25

6,050

12,650

2,150

3,318

Total Foreign

10,292

30,729

6,912

22,650

33,094

5,025

10,052

        Argentina

172

1,968

0

433

610

1,339

192

        Brazil

173

4,173

59

2,283

2,677

1,496

232

        Russia

31

571

2

350

394

173

37

        South Africa

107

551

0

260

484

91

84

        Ukraine

30

1,535

1

157

205

1,299

61

        Egypt

55

252

433

579

677

0

63

        E.U.

315

2,689

905

2,559

3,425

173

311

        Japan

57

0

630

484

630

0

57

        Mexico

86

1,102

720

1,075

1,793

24

92

        S.E. Asia

124

1,195

695

1,555

1,870

25

120

        South Korea

75

3

465

370

467

0

76

        Canada

81

614

39

370

583

39

113

        China

8,191

10,236

276

7,401

10,826

1

7,876

ROW

794

5,839

2,687

4,773

8,453

365

740

World Corn Supply and Use (Million Bushels): Current (2020/21) - Previous Year (2019/20)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

-244

2,907

283

777

1,227

642

1,435

United States

-122

2,303

-20

375

510

425

1,226

Total Foreign

-122

604

303

402

717

218

209

        Argentina

79

-

-

28

20

20

40

        Brazil

-31

197

12

39

39

79

59

        Russia

16

9

-

8

12

8

6

        South Africa

35

-79

-

-8

-12

-8

-24

        Ukraine

-21

122

-

28

28

39

34

        Egypt

-16

0

43

20

20

-

7

        E.U.

9

66

79

118

138

31

-16

        Japan

-

-

-

-4

-4

-

4

        Mexico

-114

118

39

31

41

-4

6

        S.E. Asia

7

25

6

31

37

2

-1

        South Korea

3

-

16

16

18

-

1

        Canada

3

87

-20

35

35

4

31

        China

-89

-30

-

-79

-157

-

39

ROW

-3

89

127

138

502

47

23

Source: USDA-WASDE May 12, 2020


Cotton

Market Reaction: July 2020 cotton futures closed up 1.71 cents at 58.34 cents with a trading range for the day of 56 to 58.59 cents. December 2020 cotton futures closed up 0.27 cents at 57.9 with a trading range for the day of 56.65 to 58 cents. Cotton has been hit as hard as any commodity by the COVID-19 economic slow down. A great deal of uncertainty remains regarding a return of consumer spending specifically on clothing and apparel. Exports will remain an important factor for cotton, thus the implementation of the Phase 1 trade deal and geopolitical relationship with China will be a factor closely monitored.

USDA Summary: The U.S. cotton forecasts for 2020/21 include larger beginning stocks, consumption, exports, and ending stocks compared with the year before.  Production is forecast at 19.5 million bales—400,000 bales less than the year before, based on 13.7 million planted acres as indicated in the NASS March Prospective Plantings report.  Planted area is expected to be virtually unchanged from 2019/20, but harvested area is projected 2 percent lower, as abandonment rises from 2019/20.  The yield is projected only slightly higher, using 10-year regional averages.  Domestic mill use and exports are expected to rebound as the world economy begins to recover.  Mill use is expected to rise 200,000 bales, and exports by 1 million; but ending stocks are expected to rise 600,000 bales to 7.7 million, equivalent to 41 percent of use.  This would be marginally higher than in 2019/20 and the highest since 2007/08’s 55 percent.  The price received by upland producers is forecast at 57 cents per pound, slightly below 2019/20. For 2019/20, U.S. cotton production is raised slightly from last month.  The export forecast is unchanged, but expected consumption is 200,000 bales lower, and ending stocks 400,000 bales higher.

World ending stocks in 2020/21 are projected to rise for a second consecutive year, but at a much slower pace.  With harvested area down globally, production is expected to decline 3.7 million bales, while consumption is expected to rise 11.5 million bales as the global economy begins recovering.  Global ending stocks are expected to rise 2.3 million bales, but fall as a share of consumption, from 93 percent in 2019/20 to 85 percent. For 2019/20, the world consumption forecast is reduced to 105.0 million bales, down 5.6 million from the previous forecast and 12.7 percent below the previous year.  This would be the largest annual decline in world consumption since the 19th century.  World production is raised 1 million bales from the previous month, and 2019/20 ending stocks are 5.9 million higher.  The revised year-to-year increase in global ending stocks is 16.9 million bales.


 

2016/17

2017/18

2018/19

2019/20 Projected April

2019/20 Est May

2019/20 Change From Previous Month

2020/21 Projected May

Change 2019/20 to 2020/21

 

Planted and Harvested Acres & Yield

Planted (Million)

10.07

12.72

14.1

13.74

13.74

0

13.7

-0.04

Harvested (Million)

9.51

11.1

9.99

11.8

11.61

-0.19

11.35

-0.26

U.S. Average Yield (lb/acre)

867

905

882

805

823

18

825

2

 

Supply (Million Bales)

Beg. Stocks

3.8

2.75

4.2

4.85

4.85

0

7.1

2.25

Production

17.17

20.92

18.37

19.8

19.91

0.11

19.5

-0.41

Imports

0.01

0

0

0.01

0.01

0

0.01

0

Total Supply

20.98

23.68

22.57

24.66

24.77

0.11

26.61

1.84

 

Use & Ending Stocks (Million Bales)

Domestic

3.25

3.23

2.98

2.9

2.7

-0.2

2.9

0.2

Exports

14.92

16.28

14.76

15

15

0

16

1

Total Use

18.17

19.5

17.74

17.9

17.7

-0.2

18.9

1.2

U.S. Ending Stocks

2.75

4.2

4.85

6.7

7.1

0.4

7.7

0.6

Foreign Stocks

77.65

76.54

75.43

84.56

84.56

0

91.73

7.17

Chinese Stocks

45.92

37.99

35.67

35.25

36.25

1

34.12

-2.13

 

Price and Stocks to Use Ratio

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

$0.68

$0.686

$0.703

$0.59

$0.59

$0.00

$0.57

-$0.02

U.S. Stocks/Use

15%

22%

27%

37%

40%

2.7%

40.7%

0.6%

Chinese Stocks/Use

119%

93%

90%

97%

107%

10.0%

89.8%

-16.8%

Source: USDA-WASDE May 12, 2020

 

World Cotton Supply and Use (Million 480 lb Bales) 2020/21 Current Year

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

97.16

118.95

42.84

116.46

42.93

0.14

99.43

United States

7.1

19.5

0.01

2.9

16

0.01

7.7

Total Foreign

90.06

99.45

42.84

113.56

26.93

0.13

91.73

       Central Asia

2.76

5.9

0

4.24

1.38

0

3.04

       Afr. Fr. Zone

2.48

6.09

0

0.14

5.54

0

2.88

       Australia

0.91

1.7

0

0.04

1

0

1.58

       Brazil

13.78

12

0.03

3.2

9

0

13.61

       India

18.11

28.5

1.1

23.5

4.5

0

19.71

       Mexico

0.79

1.23

0.88

1.85

0.25

0.03

0.76

       China

36.25

26.5

9.5

38

0.13

0

34.12

       E.U.

0.47

1.95

0.61

0.66

1.77

0.03

0.58

       Turkey

2.29

3.65

3.7

7

0.33

0

2.32

       Pakistan

2.78

6.3

4.7

10.5

0.15

0.03

3.1

       Indonesia

0.68

0

3.05

3

0.01

0

0.73

       Thailand

0.1

0

0.93

0.85

0

0.03

0.16

       Bangladesh

2.02

0.15

7

7

0

0.01

2.15

       Vietnam

1.39

0

6.95

6.8

0

0

1.54

ROW

5.25

5.48

4.38

6.78

2.87

0.00

5.45

World Cotton Supply and Use (Million 480 lb Bales): Current(2020/21)-Previous (2019/20) Year

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

16.88

-2.76

2.16

5.88

2.29

-0.05

8.17

United States

2.25

-0.3

-

-

1

-0.05

1

Total Foreign

14.63

-2.46

2.17

5.88

1.29

-

7.17

       Central Asia

0.45

-0.06

-

0.11

-0.25

-

0.54

       Afr. Fr. Zone

0.9

-0.01

-

-

0.27

-

0.61

       Australia

-0.66

1.07

-

-

-0.2

-

0.62

       Brazil

1.52

-1.2

-

-0.1

0.4

-

0.03

       India

8.8

-1

-0.9

1.5

1.2

-

4.2

       Mexico

0.02

-0.34

0.18

-

-0.13

-

-0.03

       China

0.58

-0.75

2

3

-0.05

-

-1.13

       E.U.

0.25

-0.05

-0.03

0.03

-0.01

-

0.16

       Turkey

0.7

0.25

-0.3

0.2

-0.02

-

0.48

       Pakistan

0.28

-0.3

1

0.4

0.05

-

0.52

       Indonesia

0.15

-

0.15

0.2

-

-

0.1

       Thailand

-0.08

-

0.05

-

-

-

-0.02

       Bangladesh

0.24

0.01

0.1

0.1

-

-

0.24

       Vietnam

0.2

-

0.55

0.5

-

-

0.25

ROW

1.28

-0.08

-0.64

-0.06

0.03

-

0.6

Source: USDA-WASDE May 12, 2020


 

 
 

Soybeans


Futures Market Reaction: July 2020 soybean futures were down 3 cents for the day closing at $8.52 with a trading range for the day of $8.49 ½ to $8.58. November 2020 soybean futures closed down 1 ½ cents at $8.57 with a trading range for the day of $8.53 ¾ to $8.62 ¾. While the May WASDE provided bearish stock estimates for corn and wheat, soybean stocks were not as problematic potentialy adding a small glimmer of light that soybean prices could improve. However, any price improvements will be dictated by U.S. planted acres, yield, and the export relationship with China. Needless to say, all three factors come with a high degree of uncertainty at this point in time.

USDA Summary: The 2020/21 outlook for U.S. soybeans is for higher supplies, crush, exports, and lower ending stocks compared to 2019/20.  The soybean crop is projected at 4.125 billion bushels, up 568 million from last year on increased harvested area and trend yields.  Despite lower beginning stocks, soybean supplies are projected up 5 percent from 2019/20 to 4.720 billion bushels.  Total U.S. oilseed production for 2020/21 is forecast up from 2019/20 mainly on higher soybean production. The U.S. soybean crush for 2020/21 is projected at 2.130 billion bushels, up slightly from the 2019/20 forecast with higher soybean meal disappearance partly offset by lower soybean meal exports.  U.S. soybean exports are forecast at 2.050 billion bushels, up 375 million from the revised forecast for 2019/20.  With higher global soybean import demand for 2020/21 led by expected gains for China, U.S. export share is expected to rise to 34 percent from the 2019/20 record low of 30 percent.  U.S. ending stocks for 2020/21 are projected at 405 million bushels, down 175 million from the revised 2019/20 forecast.  The 2020/21 U.S. season-average soybean price is projected at $8.20 per bushel, down 30 cents from 2019/20.  Soybean meal prices are forecast at $290 per short ton, down $10.00 from 2019/20.  Soybean oil prices are forecast at 29.0 cents per pound, up 0.5 cents from 2019/20.

The global oilseed outlook for 2020/21 includes larger supplies with lower beginning stocks offset by record production; however, ending stocks are expected to decline modestly with rising use.  Global oilseed production for 2020/21 is projected at a record from 2019/20 mainly on higher soybean production.  Global soybean production is forecast up 159 million bushels to 13.331 billion, with Brazil’s crop rising 257 million bushels to 4.813 billion, Argentina’s crop is up 92 million bushels to 1.966 billion, and U.S. production rising from last year’s decline.  Partly offsetting are smaller soybean crops projected for China and Ukraine. 

Global protein meal consumption outside of China is projected to increase 2 percent in 2020/21, down from the prior 5-year average of 3 percent due to the slowing global economy.  Protein meal consumption in China at 6 percent is stronger than the prior few years, however, as China recovers from the August 2018 outbreak of African Swine Fever.  With higher protein meal demand, soybean exports are expected to increase 294 million bushels to 5.949 billion.  China accounts for most of the increase in shipments with imports rising 147 million bushels to 3.527 billion.  Global soybean ending stocks are projected at 3.616 million bushels, down 70 million from 2019/20.  Lower year-over-year U.S. stocks offset higher stocks in China, Brazil, and Argentina.



 

2016/17

2017/18

2018/19

2019/20 Projected April

2019/20 Est May

2019/20 Change From Previous Month

2020/21 Projected May

Change 2019/20 to 20/21

 

Planted and Harvested Acres & Yield

Planted (Million)

83.5

90.2

89.2

76.1

76.1

0.0

83.5

7.4

Harvested (Million)

82.7

89.5

87.6

75

75

0.0

82.8

7.8

U.S. Avg. Yield (Bu/Acre)

51.9

49.3

50.6

47.4

47.4

0.0

49.8

2.4

 

Supply (Million Bushels)

Beg. Stocks

197

302

438

909

909

0

580

-329

Production

4,296

4,412

4,428

3,558

3,557

-1

4125

568

Imports

22

22

14

15

15

0

15

0

Total Supply

4,516

4,735

4,880

4,482

4,481

-1

4720

239

 

Use & Ending Stocks (Million Bushels)

Crushing

1,901

2,055

2,092

2,125

2,125

0

2130

5

Exports

2,166

2,134

1,748

1,775

1,675

-100

2050

375

Seed and Residual

147

109

131

102

101

-1

135

34

Total Use

4,214

4,297

3,971

4,002

3,901

-101

4315

414

U.S. Ending Stocks

302

438

909

480

580

100

405

-175

Foreign Stocks

3,213

3,200

3,225

3,211

3,104

-107

3210

106

 

Price and Stocks to Use Ratio

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

$9.47

$9.33

$8.48

$8.65

$8.50

-$0.15

$8.20

-$0.30

U.S. Stocks/Use

7.17%

10.19%

22.89%

11.99%

14.87%

2.87%

9.39%

-5.48%

Source: USDA-WASDE May 12, 2020



World Soybean Supply and Use (Million Bushels) 2020/2021 Current Year

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

3,684

13,329

5,806

11,493

13,255

5,950

3,615

United States

580

4,125

15

2,130

2,265

2,050

405

Total Foreign

3,104

9,204

5,792

9,363

10,990

3,900

3,210

        Argentina

992

1,966

132

1,580

1,845

239

1,007

        Brazil

945

4,813

6

1,653

1,751

3,050

964

        Paraguay

18

377

0

140

151

231

13

        China

927

643

3,527

3,417

4,093

4

1,001

        E.U.

60

96

547

577

638

7

58

        S.E. Asia

28

22

328

144

348

1

29

        Mexico

6

15

224

235

238

0

7

ROW

128

1,273

1,026

1,617

1,927

368

132

World Soybean Supply and Use (Million Bushels): Current (2020/21)-Previous (2019/20) Year

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

-387

907

241

366

453

383

-76

United States

-329

567

-

5

37

275

-75

Total Foreign

-58

340

241

361

415

108

-1

        Argentina

-69

55

-11

51

55

-62

-18

        Brazil

-175

239

-

28

28

165

-129

        Paraguay

-

13

-

-4

4

15

-7

        China

212

-22

257

257

283

-1

165

        E.U.

-3

-

-7

-7

-7

-2

-1

        S.E. Asia

3

-1

-7

-4

-

-

-5

        Mexico

-1

6

4

7

8

-

1

ROW

-26

51

6

32

45

-6

-8

Source: USDA-WASDE May 12, 2020
 
 

Wheat

Futures Market Reaction: July 2020 wheat futures closed down 2 ¾ cents at $5.14 ½ with a trading range for the day of $5.07 ¾ to $5.18 ¼. September 2020 wheat futures closed down 3 ¼ cents at $5.17 ½ with a trading range for the day of $5.11 ¾ to $5.21 ¾. Wheat prices held up reasonably well at the start of the COVID-19 economic slowdown, however given the record global stocks and initial stockpiling of wheat by importing countries the prospects for price declines are very likely moving forward.

USDA Summary:   The initial outlook for 2020/21 U.S. wheat is for smaller supplies, decreased domestic use, lower exports, and reduced stocks.  Supplies are decreased by 121 million bushels from 2019/20 on lower carry-in stocks and smaller production.  The 2020/21 U.S. wheat crop is projected at 1,866 million bushels, down 3 percent from last year on lower yields offsetting higher harvested acreage.  The all-wheat yield is projected at 49.5 bushels per acre, down 2.2 bushels from last year.  The first 2020 NASS survey-based winter wheat production forecast of 1,255 million bushels is down 4 percent from 2019, on lower Hard Red Winter and White Winter production.  Total 2020/21 domestic use is projected down nearly 3 percent on reduced feed and residual use as record-large 2020/21 corn supplies are expected to displace wheat for feeding.  Higher food use is partially offsetting as 2020/21 is projected up 2 million bushels to 964 million, up from a revised 2019/20 estimate of 962 million, which was raised 7 million this month.  The NASS Flour Milling Products report, issued on May 1, indicated an unusually large volume of wheat was ground for flour in the first quarter of 2020.  Exports for 2020/21 are projected at 950 million bushels, down 20 million from the revised 2019/20 exports.  Greater global 2020/21 export competition is expected for the United States with several major exporters projected having larger supplies.  Projected 2020/21 ending stocks are 69 million bushels lower than last year at 909 million.  The projected season-average farm price is $4.60 per bushel, unchanged from last year as the outlook for low U.S. corn prices is expected to restrain 2020/21 U.S. wheat prices.

The initial outlook for 2020/21 international wheat is for larger supplies, increased trade, greater consumption, and higher ending stocks.  Foreign supplies are projected to increase 852 million bushels to 36.097 billion as several major exporters (Argentina, Australia, Canada, and Russia) are projected to have higher production for 2020/21.  Australia is projected with the largest increase from last year to 882 million bushels, up 323 million as it recovers from a multi-year drought.  Conversely, the EU is projected to decline nearly 441 million bushels to 5.254 billion on lower harvested area and yields.  Ukraine production is also projected lower at 1.029 billion bushels, but this would still be the second-largest production on record. 

Projected 2020/21 global trade is 169 million bushels, or more than 2 percent higher, at a record-high 6.908 billion on greater exportable supplies.  Imports are projected to rise, primarily on increased demand by China, Algeria, Morocco, the EU, Iraq, and Uzbekistan.  Russia is projected as the 2020/21 leading world wheat exporter at 1.286 billion bushels with Argentina, Australia, and Canada also projected higher while the EU, Ukraine, and United States are lower.  Projected 2020/21 world consumption is increased 180 million bushels to a record-large 27.686 billion as higher food, seed, and industrial use more than offsets reduced feed use on greater global corn supplies.  Projected 2020/21 world ending stocks increased 5 percent to a record-large 11.394 billion bushels with China accounting for 52 percent of the total.
 

 

2016/17

2017/18

2018/19 

2019/20 Projected April

2019/20 Est. May

2019/20 Change From Previous Month

2020/21 Projected May

Change 2019/20 to 2020/21

 

Planted and Harvested Acres & Yield

Planted (Million)

50.1

46.1

47.8

45.2

45.2

0

44.7

-0.5

Harvested (Million)

43.8

37.6

39.6

37.2

37.2

0

37.7

0.5

U.S. Avg. Yield (Bu/Acre)

52.7

46.4

47.6

51.7

51.7

0

49.5

-2.2


Supply (Million Bushels)

Beg. Stocks

976

1,181

1,099

1,080

1,080

0

978

-102

Production

2,309

1,741

1,885

1,920

1,920

0

1,866

-54

Imports

118

158

135

105

105

0

140

35

Total Supply

3,402

3,080

3,119

3,105

3,105

0

2,984

-121


Use & Ending Stocks (Million Bushels)

Food

949

964

955

955

962

7

964

2

Seed

61

63

59

60

60

0

61

1

Feed

160

47

90

135

135

0

100

-35

Exports

1,051

906

936

985

970

-15

950

-20

Total Use

2,222

1,981

2,039

2,135

2,127

-8

2,075

-52

U.S. Ending Stocks

1,181

1,099

1,080

970

978

8

909

-69

Foreign Stocks

8,457

9,325

9,185

9,788

9,866

78

10,486

620


Price and Stocks to Use Ratio

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

$3.89

$4.72

$5.16

$4.60

$4.60

$0.00

$4.60

$0.00

U.S. Stocks/Use

53.15%

55.48%

52.97%

45.43%

45.98%

0.5%

43.8%

-2.2%

Source: USDA-WASDE May 12, 2020



World Wheat Supply and Use (Million Bushels) 2020/21 Current Year

 

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

 

World

10,844

28,237

6,718

5,051

27,686

6,907

11,395

 

United States

978

1,866

140

100

1,125

950

909

 

Total Foreign

9,866

26,371

6,578

4,951

26,561

5,957

10,486

 

        Argentina

53

772

0

2

228

533

64

 

        Australia

136

882

7

147

277

551

197

 

        Canada

204

1,249

17

169

360

900

209

 

        E.U.

491

5,254

202

1,856

4,420

1,047

480

 

        Russia

304

2,829

18

643

1,488

1,286

378

 

        Ukraine

45

1,029

3

92

323

698

55

 

        Bangladesh

65

46

243

11

276

0

78

 

        Brazil

33

202

261

18

445

22

30

 

        China

5,525

4,960

220

735

4,777

37

5,892

 

        Japan

45

32

206

22

230

10

43

 

        N. Africa

505

640

1,091

72

1,732

36

468

 

        Nigeria

7

2

187

2

175

15

7

 

        Sel. Mideast

439

821

624

126

1,425

25

435

 

        S.E. Asia

198

0

968

259

915

39

212

 

        India

882

3,785

1

220

3,638

37

993

 

        Kazakhstan

42

496

4

55

231

261

49

 

ROW

892

3,371

2,525

523

5,621

460

895

 

World Wheat Supply and Use (Million Bushels): Current (2020/21)- Previous Year (2019/20)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

625

148

96

-249

136

194

637

United States

-102

-54

35

-35

-25

-35

-61

Total Foreign

728

202

61

-215

162

228

698

        Argentina

-11

55

-

-

2

37

6

        Australia

-46

323

-13

-44

-42

250

57

        Canada

-18

61

-2

-11

-4

55

-11

        E.U.

105

-404

26

-129

-191

-184

101

        Russia

17

125

1

18

18

55

69

        Ukraine

-13

-43

-

-11

-11

-55

10

        Bangladesh

18

2

4

-

7

-

17

        Brazil

-6

11

-4

-

-

4

-2

        China

389

52

73

37

147

-

367

        Japan

6

-3

-

-

-

-

3

        N. Africa

-63

-36

90

-11

14

-

-23

        Nigeria

-

-

-

-

-

-

-

        Sel. Mideast

7

-12

7

-4

5

-5

2

        S.E. Asia

-2

-

-24

-29

-29

2

1

        India

258

-22

-

-

106

18

111

        Kazakhstan

-20

75

-9

-4

-4

40

9

ROW

107

19

-89

-27

143

11

-20

Source: USDA-WASDE May 12, 2020
 

2020 Estimated Returns - Non-Irrigated


The profitability outlook has been updated after the release of the May 2020, USDA WASDE report. For the Table below, non- irrigated yields were estimated as the 5-year Tennessee state average: 165 bushels per acre for corn, 47 bushels per acre for full-season soybeans, 1,072 pounds per acre cotton, and 69 bushels per acre for wheat. Prices used for grain sales are based on 2020 new crop cash bids as reported by the USDA AMS Market report dated May 12, 2020 for Tennessee country grain elevators. The price of $0.58 per lb. of cotton is based on a cotton loan price of $0.52, an assumed $0.03 cotton equity, and a gin rebate of $0.03. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, MFP etc.). Costs shown below are based on the 2020 UT Extension Row Crop budgets with adjustments made where warranted. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: Cotton - $ 112, Soybeans - $41, Corn - $142 (includes 180 units of N), and Wheat/Soybeans - $95. These cost reflect a slight increase from 2019 to 2020 along with other nutrients where warranted. Land cost was estimated as a share arrangement: 25% of gross revenue less 25% of the crop insurance premium. Additional details on expenses can be found in the 2020 UT Crop Budgets.

Based on projected yields, prices, and expenses all crops are projected to have positive returns over variable expenses and land costs, but negative net returns over variable, land, and fixed costs. Producers with higher yields or lower cost structures may attain improved (or positive) net return over all costs. The 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. Please contact your local County Extension office or Area Specialist - Farm Management for assistance in developing a budget or financial plan for your farm.


 

Cotton

Soybeans

Corn

Wheat/Soybeans

Yield

1072 lbs.

47 bu.

165 bu.

69 bu./35 bu.

Price (as of 5/12/2020)

$0.58 lb.

$8.46 bu.

$3.15 bu.

$5.16 bu./$8.46

Revenue

$622

$397

$519

$652

Variable Expenses

$470

$245

$384

$455

Returns Over Variable

$152

$152

$135

$197

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

$153

$98

$127

$160

Returns Over Variable and Land Costs

($1)

$55

$8

$37

Fixed Costs (Capital Recovery and Management Labor)

$182

$118

$116

$114

Returns Over Specified Costs

($183)

($63)

($108)

($77)

Breakeven Price at Average Yield and Specified Cost

$0.81

$10.25

$4.02

$6.15/$9.60

  

2020 Estimated Returns - Irrigation

For the table below, irrigated yields were estimated as: 225 bushels per acre for corn, 65 bushels per acre for full-season soybeans, and 1,200 pounds per acre cotton. Prices used for grain sales are based on 2020 new crop cash bids as reported by the USDA AMS Market report dated May 12, 2020 for Tennessee country grain elevators. The price of $0.58 per lb. of cotton is based on a cotton loan price of $0.52, an assumed $0.03 cotton equity, and a gin rebate of $0.03. Revenue estimates do not consider any government payments (crop insurance, ARC or PLC, MFP etc.). Costs shown below are based on the 2020 UT Extension Row Crop budgets with adjustments made where warranted. For reference, in variable expenses below, fertilizer expense per acre is estimated as follows: cotton - $ 116/acre, soybeans - $51/acre, corn - $181/acre. These cost reflect a slight increase from 2019 to 2020 along with other nutrients where warranted. Land cost was estimated at 25% of gross revenue less 25% of the crop insurance premium. Irrigation fixed costs and energy costs will vary greatly among producers and systems. These projections include: variable expenses and energy costs for irrigation of $49 per acre for corn, $42 per acre for cotton, and $32 per acre for soybeans. Fixed irrigation costs of $96 per acre for irrigation equipment are used in the table below. A management expense of $36 per acre is included in Fixed Costs – Capital Recovery and Management Labor. This is $18 above the dryland crop management labor expense.

Based on projected yields, prices, and expenses all crops are projected to have positive returns over variable expenses and land costs except cotton. A negative net return over variable, land, and fixed costs is projected for all four crop mixes at today’s current new crop price level. Producers with higher yields or lower cost structures may attain improved (or positive) net return over all costs.  The 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. Please contact your local County Extension office or Area Specialist - Farm Management for assistance in developing a budget or financial plan for your farm. 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.

65 bu.

225 bu.

68 bu./45 bu.

Price (as of 5/12/2020)

$0.58 lb.

$8.46 bu.

$3.15 bu.

$5.16 bu./$8.46

Revenue

$696

$550

$708

$731

Variable Expenses(includes energy cost)

$476

$288

$475

$449

Fixed Irrigation Costs per Acre

$96

$96

$96

$86

Returns Over Variable & Fixed IR Costs

$124

$166

$137

$196

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

$147

$112

$150

        $155

Returns Over Variable, IR Fixed Cost and Land Costs

($23)

$54

($13)

$42

Fixed Costs (Capital Recovery and Management Labor)

$119

$120

$137

$216

Returns Over Specified Costs

($142)

($66)

($150)

($174)

Breakeven Price at Average Yield and Specified Cost

$0.74

$9.80

$4.04

$7.05/$10.75

  

Past Monthly Comments: