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 2017 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 2018 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 2018 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, 2018 - USDA World Supply and Demand Estimates

Corn

Market Reaction: September 2018 corn futures closed down 11 ½ cents at $3.57 ¾ with a trading range for the day of $3.57 to $3.69 ¾.  December 2018 corn futures closed down 11 cents at $3.71 ¾ with a trading range for the day of $3.70 ¾ to $3.83 ½. Record U.S. yield of 178.4 drove prices down across the board. The global corn picture provides some hope for improved prices but with trade disruptions on multiple fronts will U.S. supplies be able to access global demand and alleviate downward domestic price pressure?

 

USDA Summary: This month’s 2018/19 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and larger ending stocks.  Corn production is forecast at 14.6 billion bushels, up 356 million from the July projection.  The season’s first survey-based corn yield forecast, at a record 178.4 bushels per acre, is 4.4 bushels higher than last month’s trend-based projection.  Today’s Crop Production report indicates that Illinois, Indiana, Nebraska, Ohio, North Dakota, and South Dakota are forecast to have yields above a year ago.  The yield for Iowa is unchanged relative to last year, while Missouri, Minnesota, and Kansas are forecast below a year ago.  Feed and residual use is up based mostly on a larger crop and lower expected prices.  Exports are raised reflecting U.S. export competitiveness and expectations of reduced competition from Brazil.  With supply rising faster than use, ending stocks are raised 132 million bushels to 1.7 billion. The season-average corn price received by producers is down 20 cents at the midpoint at a range of $3.10 to $4.10 per bushel. 

 

This month’s 2018/19 foreign coarse grain outlook is for lower production, reduced trade, and slightly lower stocks relative to last month.  EU corn production is lowered, mostly reflecting reductions for France and Germany that are partially offset by increases for Romania and Bulgaria.  Brazil corn production is lowered based on updated expectations for second-crop corn area that will be planted beginning early 2019.  Ukraine corn production is forecast higher, as timely rainfall and lack of excessive heat during reproduction boost yield prospects.  Other notable corn production changes include projected increases for Zimbabwe, Serbia, and Moldova, with reductions for Zambia and South Africa. 

 

Major foreign coarse grain trade changes for 2018/19 include corn export reductions for Brazil, Zambia, and South Africa that are partially offset by increases for Serbia, Ukraine, and Moldova.  Brazil’s corn exports are lowered for 2017/18 based on lower-than-expected shipments observed for the local marketing year beginning in March 2018.  Global corn imports for 2018/19 are raised reflecting expectations of record-high imports for the EU that are partially offset by reductions for Vietnam and Zimbabwe.  Foreign corn ending stocks are slightly higher relative to last month, mostly reflecting increases for Brazil and Zimbabwe that are largely offset by reductions for Zambia, South Africa, Canada, and Russia.


 

2014/15

2015/16

2016/17

2017/18 Est.

2018/19 Projected July

2018/19 Projected August

2018/19 Change From Previous Month

Change 2017/18 to 2018/19

Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

90.6

88

94

90.2

89.1

89.1

0.0

-1.1

Acres Harvested (Million Acres)

83.1

80.8

86.7

82.7

81.8

81.8

0.0

-0.9

U.S. Average Yield (Bu/Acre)

171.0

168.4

174.6

176.6

174

178.4

4.4

1.8

Supply (Million Bushels)

Beg. Stocks

1,232

1,731

1,737

2,293

2,027

2,027

0

-266

Production

14,216

13,602

15,148

14,604

14,230

14,586

356

-18

Imports

32

68

57

40

50

50

0

10

Total Supply

15,479

15,401

16,942

16,937

16,307

16,664

357

-273

Use & Ending Stocks (Million Bushels)

Feed and Residual

5,280

5,114

5,470

5,450

5,425

5,525

100

75

Ethanol

5,200

5,224

5,432

5,600

5,625

5,625

0

25

Food, Seed & Industrial

1,401

1,424

1,453

1,460

1,480

1,480

0

20

Exports

1,867

1,901

2,294

2,400

2,225

2,350

125

-50

Total Use

13,748

13,664

14,649

14,910

14,755

14,980

225

70

U.S. Ending Stocks

1,731

1,737

2,293

2,027

1,552

1,684

132

-343

Foreign Stocks

6,529

6,685

6,676

5,584

4,430

4,438

8

-1,146

Price and Stocks to Use Ratio

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

$3.70

$3.61

$3.36

$3.35-$3.45

$3.30-$4.30

$3.10-$4.10

-$0.20

$0.20

U.S. Stocks/Use

12.59%

12.71%

15.65%

14.78%

10.52%

11.24%

0.7%

-3.54%

Source: USDA-WASDE August 10, 2018


World Corn Supply and Use (Million Bushels) 2018/19 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

7,611

41,771

5,997

26,432

43,261

6,284

6,121

US

2,027

14,586

50

5,525

12,630

2,350

1,684

Foreign

5,584

27,185

5,947

20,907

30,631

3,934

4,438

Argentina

137

1,614

0

315

472

1,063

216

Brazil

414

3,720

28

2,205

2,618

1,142

402

South Africa

114

531

0

260

496

79

71

Egypt

70

252

382

535

634

0

70

EU

323

2,354

709

2,362

3,110

59

217

Japan

52

0

571

441

583

0

40

Mexico

190

1,024

638

984

1,701

59

91

Southeast Asia

87

1,155

610

1,425

1,736

30

86

South Korea

75

3

402

315

405

0

74

Canada

93

583

20

335

547

61

87

China

3,132

8,858

197

6,850

9,881

2

2,303

Ukraine

55

1,220

1

197

248

965

63

ROW

841

5,871

2,390

4,683

8,199

474

716

World Corn Supply and Use (Million Bushels) August-July 2018/19

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

63

266

43

187

189

72

139

US

-

356

-

100

100

125

131

Foreign

63

-91

43

87

90

-53

8

Argentina

-

-

-

-

-

-

-

Brazil

59

-59

-

39

39

-79

39

South Africa

-

-20

-

-

-

-8

-12

Egypt

-

-

-

-

-

-

-

EU

28

-67

79

59

39

-

-

Japan

-

-

-

-

-

-

-

Mexico

-

-

-

-

-

-

-

Southeast Asia

-11

-

-20

-31

-31

-

1

South Korea

-

-

-

-

-

-

-

Canada

-8

-

-

-

-

-

-8

China

-

-

-

-

-

-

-

Ukraine

-

39

-

20

20

20

-

ROW

-5

16

-16

-

22

14

-13

​Source: USDA-WASDE August 10, 2018

 

Cotton

Market Reaction: December 2018 cotton futures closed down 2.03 cents at 85.23 with a trading range for the day of 85.1 to 87.69 cents. March 2019 cotton futures closed down 1.98 cents at 85.71 with a trading range for the day of 85.56 to 88.07 cents. U.S. cotton stocks were up 600,000 bales from last month. Yield was up but so was abandonment. 

 

USDA Summary: This month’s 2018/19 U.S. cotton forecast includes higher beginning stocks, production, exports, and ending stocks relative to last month.  Production for the 2018 crop is raised 4 percent to 19.2 million bales, on this season’s first survey-based production forecast.  NASS’s survey indicates higher abandonment, but a higher average yield compared to last month’s expectations.  Beginning stocks are raised 400,000 bales due to lower-than-expected 2017/18 exports and domestic consumption, and 2018/19 exports are 500,000 bales higher, at 15.5 million bales.  Ending stocks are 600,000 bales higher this month.  The midpoint of the marketing-year-average price is unchanged from last month, at 75 cents per pound.


Projected world 2018/19 ending stocks are down 1 percent this month, due to a combination of lower beginning stocks and higher consumption offsetting higher production.  Beginning stocks are reduced 450,000 bales, reflecting both lower production and higher consumption estimates for 2017/18.  Production in 2018/19 is increased 400,000 bales, with higher expected crops in the United States, Argentina, and Turkey offsetting reduced crops in Uzbekistan, Australia, and Turkmenistan.  Consumption is raised 660,000 bales, led by a 300,000-bale increase for Pakistan, with smaller increases in Indonesia, Turkey, and other countries.​


 

2014/15

2015/16

2016/17

2017/18 Est.

2018/19 Projected July

2018/19 Projected August

2018/19 Change From Previous Month

Change 2017/18 to 2018/19

Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

11.04

8.58

10.07

12.61

13.52

13.52

0

0.91

Acres Harvested (Million Acres)

9.35

8.07

9.51

11.1

10.51

10.14

-0.37

-0.96

U.S. Average Yield (lbs/acre)

838

766

867

905

845

911

66

6

Supply (Million Bales)

Beg. Stocks

2.35

3.65

3.8

2.75

4

4.4

0.4

1.65

Production

16.32

12.89

17.17

20.92

18.5

19.24

0.74

-1.68

Imports

0.01

0.03

0.01

0.01

0.01

0.01

0

0

Total Supply

18.68

16.57

20.98

23.68

22.51

23.64

1.13

-0.04

Use & Ending Stocks (Million Bales)

Domestic

3.58

3.45

3.25

3.25

3.4

3.4

0

0.15

Exports

11.25

9.15

14.92

15.85

15

15.5

0.5

-0.35

Total Use

14.82

12.6

18.17

19.1

18.4

18.9

0.5

-0.2

U.S. Ending Stocks

3.65

3.8

2.75

4.4

4

4.6

0.6

0.2

Foreign Stocks

108.09

91.11

81.34

80.11

73.84

72.5

-1.34

-7.61

Chinese Stocks

66.92

58.2

45.92

37.79

28.54

28.64

0.1

-9.15

Price and Stocks to Use Ratio

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

$0.613

$0.612

$0.68

$0.68

$0.68-$0.82

$0.70-$0.80

$0.000

$0.070

U.S. Stocks/Use

25%

30%

15%

25%

22%

24%

2.60%

-0.60%

Chinese Stocks/Use

197%

166%

119%

102%

67%

67%

0.24%

-35.04%

Source: USDA-WASDE August 10, 2018

World Cotton Supply and Use (Million 480 lb Bales) 2018/19 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

84.51

120.53

41.8

127.62

41.82

0.3

77.1

US

4.4

19.24

0.01

3.4

15.5

0.14

4.6

Foreign

80.11

101.29

41.79

124.22

26.32

0.16

72.5

Central Asia

2.77

5.9

0

3.71

2.38

0

2.58

Afr. Fr. Zone

2.22

5.28

0

0.14

4.97

0

2.39

Australia

2.86

3.55

0

0.04

4.3

0

2.07

Brazil

8.63

9.5

0.08

3.6

5.3

0

9.31

India

12.43

28.7

1.5

25.2

4.5

0

12.93

Mexico

0.65

1.75

0.9

1.9

0.55

0.03

0.83

China

37.79

26.5

7

42.5

0.15

0

28.64

EU

0.25

1.56

0.7

0.75

1.45

0.05

0.26

Turkey

1.95

4.5

3.5

7.5

0.33

0

2.13

Pakistan

2.87

8.5

2.5

11

0.18

0.03

2.67

Indonesia

0.62

0

3.75

3.65

0.01

0

0.72

Thailand

0.18

0

1.13

1.1

0

0.03

0.18

Bangladesh

1.86

0.14

8.1

8

0

0.01

2.08

Vietnam

1.19

0

7.7

7.5

0

0

1.39

ROW

3.84

5.41

4.93

7.63

2.2

0.01

4.32

World Cotton Supply and Use (Million 480 lb Bales​​) August-July 2018/19

Country / Region

Beginning Stocks

Production

Imports

Domestic Use

Exports

Loss

Ending Stocks

World

-0.45

0.42

0.57

0.67

0.58

0.03

-0.74

US

0.4

0.74

-

-

0.5

0.03

0.6

Foreign

-0.85

-0.32

0.56

0.67

0.08

-

-1.34

Central Asia

-0.06

-0.57

-

-0.01

-0.2

-

-0.43

Afr. Fr. Zone

-0.43

-

-

-

0.21

-

-0.63

Australia

-0.2

-0.15

-

-

-0.1

-

-0.25

Brazil

-

-

-

-

-0.1

-

0.11

India

-0.2

-

-

-

0.2

-

-0.4

Mexico

-0.1

-

-0.03

-

-

-

-0.12

China

0.1

-

-

-

-

-

0.1

EU

-

-

-0.01

0.01

-0.01

-

-0.01

Turkey

-0.08

0.2

-0.1

0.1

-0.02

-

-0.05

Pakistan

-0.01

-

0.2

0.3

-0.02

-

-0.09

Indonesia

-

-

0.25

0.15

-

-

0.1

Thailand

-

-

0.05

0.05

-

-

-

Bangladesh

-

-

0.1

-

-

-

0.1

Vietnam

-

-

-

-

-

-

-

ROW

0.13

0.2

0.11

0.07

0.12

0.00

0.23

Source: USDA-WASDE August 10, 2018


 

Soybeans

Futures Market Reaction: September 2018 soybean futures were down 42 ¼ cents at $8.50 ¾ with a trading range for the day of $8.49 ½ to $8.93. November 2018 soybean futures closed down 42 ¼ cents at $8.61 ¾ with a trading range for the day of $8.60 ¼ to $9.03 ¾. Near record U.S. yields and massive ending stocks (785 million bushels), with only minor year-over-year reductions in exports sent soybean futures spiraling down. Given the glut of global soybeans, reduced access to the largest importer (China) weighs heavily on the U.S. soybean market.      


USDA Summary:  U.S. oilseed production for 2018/19 is projected up from last month mainly due to a higher soybean production forecast.  Soybean production is forecast at 4,586 million bushels, up 276 million on higher yields.  Harvested area is forecast at 88.9 million acres, unchanged from the July projection.  The first survey-based soybean yield forecast of 51.6 bushels per acre is 3.1 bushels above last month and 2.5 bushels above last year.  As higher production more than offsets lower beginning stocks, soybean supplies for 2018/19 are projected at a record 5,040 million bushels, 5 percent above last month.  With larger supplies, crush and exports are raised 15 and 20 million bushels, respectively.  Ending stocks are projected at 785 million bushels, up 205 million from last month. The U.S. season-average soybean price for 2018/19 is forecast at $8.90 per bushel at the midpoint, down 35 cents from last month.  The soybean meal price forecast at $295 to $335 per short ton, down $20 at the midpoint. The soybean oil price forecast is unchanged at 28.0 to 32.0 cents per pound.

U.S. soybean changes for 2017/18 include higher exports, higher crush, and lower ending stocks.  Exports are raised 25 million bushels to 2,110 million on strong export sales and shipments through July.  Crush is raised 10 million bushels to a record 2,040 million on strong soybean meal exports.  With increased crush and exports, soybean ending stocks are reduced 35 million bushels to 430 million.

Global oilseed 2018/19 supply and demand forecasts include higher production, exports, crush, and stocks compared to last month.  Global oilseed production for 2018/19 is projected up with higher soybean, sunflowerseed, cottonseed, and peanut production partly offset by lower rapeseed.  Global soybean, peanut, and cottonseed crops are raised on higher U.S. production.  Global oilseed exports for 2018/19 are projected up with higher soybean exports for the United States and higher rapeseed exports for Ukraine.  Global crush is raised.  Lower soybean crush for China and rapeseed crush for the EU are offset by higher rapeseed crush for Russia and sunflowerseed crush for the EU, Russia, and Ukraine.  With larger increases to supply than use, global oilseed stocks are raised.

 

2014/15 

2015/16

2016/17

2017/18 Est.

2018/19 Projected July

2018/19 Projected August

2018/19 Change From Previous Month

Change 2017/18 to 2018/19

Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

83.3

82.7

83.4

90.1

89.6

89.6

0.0

-0.5

Acres Harvested (Million Acres)

82.6

81.7

82.7

89.5

88.9

88.9

0.0

-0.6

U.S. Average Yield (Bu/Acre)

47.5

48

52

49.1

48.5

51.6

3.1

2.5

Supply (Million Bushels)

Beg. Stocks

92

191

197

302

465

430

-35

128

Production

3,927

3,926

4,296

4,392

4,310

4,586

276

194

Imports

33

24

22

22

25

25

0

3

Total Supply

4,052

4,140

4,515

4,715

4,800

5,040

240

325

Use & Ending Stocks (Million Bushels)

Crushing

1,873

1,886

1,901

2,040

2,045

2,060

15

20

Exports

1,842

1,942

2,166

2,110

2,040

2,060

20

-50

Seed and Residual

146

115

146

136

135

136

1

0

Total Use

3,862

3,944

4,214

4,286

4,220

4,256

36

-30

U.S. Ending Stocks

191

197

302

430

580

785

205

355

Foreign Stocks

2,658

2,687

3,250

3,084

3,031

3,108

77

24

Price and Stocks to Use Ratio

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

$10.10

$8.95

$9.47

$9.35

$8.00-$10.50

$7.65-$10.15

-$0.35

-$0.45

U.S. Stocks/Use

4.95%

4.99%

7.17%

12.66%

13.74%

18.44%

4.70%

5.79%

Source: USDA-WASDE Aguust 10, 2018


World Soybean Supply and Use (Million Bushels) 2018/19 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

3,513

13,489

5,689

11,342

12,994

5,804

3,893

US

430

4,586

25

2,060

2,196

2,060

784

Foreign

3,084

8,903

5,664

9,281

10,798

3,744

3,108

Argentina

1,132

2,094

82

1,580

1,761

294

1,253

Brazil

887

4,428

16

1,569

1,700

2,756

875

Paraguay

10

360

0

145

148

217

6

China

863

533

3,491

3,491

4,119

4

764

EU

39

102

581

599

660

11

51

Japan

8

10

121

86

129

0

10

Mexico

6

18

175

191

193

0

6

ROW

139

1,358

1,199

1,621

2,089

463

145

World Soybean Supply and Use (Million Bushels) August-July 2018/19

Country / Region

Beginning Stocks

Production

Imports

Domestic Crush

Domestic Total

Exports

Ending Stocks

World

-15

280

17

-24

-24

24

282

US

-35

276

-

15

16

20

205

Foreign

20

4

17

-39

-40

4

77

Argentina

53

-

-1

-

-1

-

53

Brazil

-31

-

-

-

-

-

-31

Paraguay

-

-

-

-

-

-

-

China

1

-

-

-55

-55

-2

58

EU

-

1

18

18

18

-

1

Japan

-

-

-

-

-

-

-

Mexico

-

-

-

-

-

-

-

ROW

-4

3

-

-1

-2

6

-5

Source: USDA-WASDE August 10, 2018
 

Wheat


Futures Market Reaction: September 2018 wheat futures closed down 17 ¾ cents at $5.46 ¾ with a trading range for the day of $5.45 ¾ to $5.74. July 2019 wheat futures closed down 13 ½ cents at $5.90 ¾ with a trading range for the day of $5.89 to $6.08 ¾. Wheat futures were drug down on minimal reductions to domestic and foreign ending stocks (compared to expectations) and bearish U.S. soybean and corn yields.

 

USDA Summary: The outlook for 2018/19 U.S. wheat this month is lower supplies, greater use, and reduced stocks.  Wheat production is lowered 4 million bushels to 1,877 million on a slight reduction in winter wheat, durum, and other spring wheat production as indicated by the NASS August Crop Production report.  Projected food use is increased by 5 million bushels to 970 million based on the latest NASS Flour Milling Products report.  This would be record food use, surpassing 2017/18, which was also revised higher.  Projected wheat exports are raised 50 million bushels to 1,025 million on substantially lower exportable supplies for the EU and limited additional export capacity of several other major competitors.  Projected 2018/19 ending stocks are reduced 50 million bushels to 935 million, down 15 percent from last year.  The projected season-average farm price is up $0.10 per bushel at the midpoint with the range at $4.60 to $5.60. 

World 2018/19 wheat supplies are reduced this month by 261 million bushels, primarily on lower EU production.  Continued drought conditions in several northern European countries, most notably Germany, resulted in lower production, down 276 million bushels to 5.052 billion.  This would be the lowest EU wheat production since 2012/13.  Russia’s wheat production is increased 37 million bushels to 2.499 billion on continued favorable conditions for spring wheat.  

Projected global 2018/19 trade is lower, mainly on reduced EU exports, which are down 165 million bushels to 845 million, the lowest in six years.  Russia’s exports are increased 37 million bushels to 1.286 billion; Russia is projected to remain the leading world wheat exporter for the second consecutive year.  Global imports are lowered for several countries with the largest reduction for Algeria.  Projected 2018/19 world consumption is 187 million bushels lower, primarily on reduced feed use in the EU and Russia.  Global ending stocks are down 70 million bushels to 9.517 billion, down 5 percent from last year’s record.​

 

2014/15

2015/16

2016/17

2017/18 Est.

2018/19 Projected July

2018/19 Projected August

2018/19 Change From Previous Month

Change 2017/18 to 2018/19

 

Planted and Harvested Acres & Yield

Acres Planted (Million Acres)

56.8

55

50.1

46

47.8

47.8

0

1.8

Acres Harvested (Million Acres)

46.4

47.3

43.9

37.6

39.6

39.6

0

2

U.S. Average Yield (Bu/Acre)

43.7

43.6

52.7

46.3

47.5

47.4

-0.1

1.1

Supply (Million Bushels)

Beg. Stocks

590

752

976

1,181

1,100

1,100

0

-81

Production

2,026

2,062

2,309

1,741

1,881

1,877

-4

136

Imports

151

113

118

157

135

135

0

-22

Total Supply

2,768

2,927

3,402

3,079

3,117

3,112

-5

33

Use & Ending Stocks (Million Bushels)

Food

958

957

949

964

965

970

5

6

Seed

79

67

61

64

62

62

0

-2

Feed

114

149

161

48

130

120

-10

72

Exports

864

778

1,051

901

975

1,025

50

124

Total Use

2,015

1,951

2,222

1,978

2,132

2,177

45

199

U.S. Ending Stocks

752

976

1,181

1,100

985

935

-50

-165

Foreign Stocks

7,243

7,944

8,270

8,933

8,601

8,580

-21

-353

Price and Stocks to Use Ratio

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

$5.99

$4.89

$3.89

$4.73

$4.50-$5.50

$4.60-$5.60

$0.10

$0.37

U.S. Stocks/Use

37.32%

50.03%

53.15%

55.61%

46.20%

42.95%

-3.25%

-12.66%

Source: USDA-WASDE August 10, 2018


World Wheat Supply and Use (Million Bushels) 2018/19 (August)

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

10,034

26,809

6,676

5,087

27,328

6,756

9,515

US

1,100

1,877

135

120

1,152

1,025

935

Foreign

8,933

24,932

6,541

4,967

26,176

5,731

8,580

Argentina

26

717

0

4

209

522

11

Australia

180

808

6

169

298

588

108

Canada

219

1,194

17

162

345

900

184

EU

519

5,052

202

1,911

4,556

845

372

Brazil

47

173

276

18

445

11

39

China

4,660

4,703

165

625

4,483

44

5,002

Sel. Mideast

464

693

678

177

1,436

42

358

N. Africa

536

775

953

83

1,688

25

551

Pakistan

177

966

0

44

930

44

170

Southeast Asia

201

0

1,007

314

966

39

202

India

485

3,564

18

184

3,601

15

452

Russia

339

2,499

22

588

1,396

1,286

177

Kazakhstan

104

533

2

73

250

312

77

Ukraine

52

937

1

110

338

606

46

ROW

926

2,318

3,193

506

5,235

451

831

World Wheat Supply and Use (Million Bushels) August-July 2018/19

Country / Region

Beginning Stocks

Production

Imports

Domestic Feed

Domestic Total

Exports

Ending Stocks

World

-16

-244

-37

-143

-188

-58

-71

US

-

-5

-

-10

-5

50

-50

Foreign

-15

-239

-37

-133

-184

-108

-21

Argentina

-

-

-

-

-

-

-

Australia

-

-

-

-

-

-

-

Canada

13

-

-2

15

11

-

-

EU

-10

-276

-

-92

-110

-165

-10

Brazil

-

-7

-

-4

-4

-

-4

China

-

-

-

-

-

-

-

Sel. Mideast

-2

-

-5

-1

-1

-

-5

N. Africa

7

-

-12

-

3

-

-8

Pakistan

-

29

-

-

-

7

22

Southeast Asia

7

-

-4

-9

2

1

-

India

-

-

-

-

-

-

-

Russia

-37

37

-

-37

-37

37

-

Kazakhstan

-

18

-

4

4

-

15

Ukraine

-

-

-

-7

-7

-

8

ROW

6

-40

-15

-1

-43

12

-39

Source: USDA-WASDE August 10, 2018
 

2018 Estimated Returns - Non-Irrigated

The projected profitability outlook for the 2018 crop has been updated after the release of the August 10, USDA Supply & Demand reports. This report incorporates the projected production for this crop year and includes survey based yield estimates. The Tennessee estimates for 2018 are used in this profitability update. For 2018, Tennessee state average yields are currently estimated by the National Agricultural Statistics Service (NASS) to be corn 174 bu./acre, cotton 1050 lbs./acre, soybeans 49 bu./acre and wheat 63 bu./acre. Since milo and double crop soybeans are not projected, 90 bu./acre and 35 bu./acre respectively are still being used. Prices used for 2018 are current forward prices for 2018 harvest with the exception of wheat which is a harvest time average. Since the July 12th report, cotton prices are down 2 cents with profitability up $26 per acre, corn price is up 12 cents with profitability up $49 per acre, soybean prices are down 5 cents with profitability up $10 per acre, while wheat/soybeans profitability decreased $1. Prices rallied during the last month before dropping on this report so are not changed much since the July 12th. Profitability has benefitted from a projected increase in yields for cotton, corn, and soybeans over the state average yield. Costs are based on the 2018 UT Extension Row Crop budgets with adjustments made where warranted.  Milo prices are an estimate as very few quotes are available. 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. I would like to point out the cotton price of 82 cents that is being used in the profitability outlook. The price of 82 cents is made up of a cash price of 80 cents and gin rebates (seed & hauling) of 2 cents. Gin rebates for seed and hauling are an estimate as those are generally not known until harvest time and could be in the range 0f 0 -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 2018 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 - $ 94, Soybeans - $35, Corn - $128 (includes 170 units of N), and Wheat/Soybeans - $94. 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 2018 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.



2018 Estimated Returns – Non-Irrigated

Cotton

Soybeans

Corn

Wheat/Soybeans

Yield

1050 lbs.

49 bu.

174 bu.

63 bu./35 bu.

Price (as of 8/10/18)

$0.82 lb.

$8.29 bu.

$3.54 bu.

$5.21 bu./$8.29 bu.

Revenue

$861

$406

$616

$618

Variable Expenses

$430

$224

$347

$417

Returns Over Variable

$431

$182

$269

$202

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

$213

$99

$151

$151

Returns Over Variable and Land Costs

$219

$83

$118

$51

Fixed Costs
Depreciation & interest on machinery

$134

$64

$57

$111

Returns Over Specified Costs

$85

$19

$61

-$60

Breakeven Price at 2018 Projected Yield and Specified Cost

$0.74

$7.89

$3.19

$5.81/$8.91

  

2018 Estimated Returns - Irrigation

Considering irrigation, profitability is positive for cotton over variable, land and fixed cost. Returns Over Variable and Land Costs are positive for corn, soybeans, and wheat/soybeans, but not enough to cover fixed costs. An individual producer’s machinery and equipment costs will have a strong influence on profitability.
Since the July 12th report cotton profitability is down $18 per acre, corn down $2 per acre, soybean profitability is down $3 per acre, while wheat/soybeans decreased $2 per acre. Irrigated yields have been left unchanged so adjustment are strictly price based.  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 2018 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 in variable expenses energy costs for irrigation of $30 per acre for corn, $26 per acre for cotton, and $20 per acre for soybeans. Irrigation repairs and maintenance are estimated at $16 per acre for corn, $14 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 - $101, Soybeans - $37, Corn - $159 (includes 240 units of N), 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 2018 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. 

2018 Estimated Returns – Irrigated

Cotton

Soybeans

Corn

Wheat/Soybeans

Yield

1200 lbs.

60 bu.

210 bu.

63 bu./45 bu.

Price (as of 8/10/18)

$0.82 lb.

$8.29 bu.

$3.54 bu.

$5.21 bu./$8.29 bu.

Revenue

$984

$497

$743

$701

Variable Expenses( include energy cost)

$477

$255

$445

$447

Fixed Irrigation Costs per Acre

$86

$86

$86

$86

Returns Over Variable & Fixed IR Costs

$421

$156

$212

$168

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

 

$222

$100

$161

$150

Returns Over Variable, IR Fixed Cost and Land Costs

$199

$56

$51

$18

Fixed Costs- management labor,
depreciation & interest on machinery

$149

$79

$72

$126

Returns Over Specified Costs

$50

-$23

-$21

-$108

Breakeven Price at Average Yield and Specified Cost

$0.78

$8.67

$3.64

$5.81/$9.85

​​
  

Past Monthly Comments: