May Supply and Demand Estimates Give First Look at 2014/15 Crops

Friday’s World Agricultural Supply and Demand Estimates (WASDE) reduced 2013/14 U.S. corn ending stocks to 1.146 billion bushels, much lower than the expected 1.314 billion bushels. Much of the decrease in old-crop ending stocks is a result of a boost in exports. New crop ending stocks are estimated to be 1.726 billion bushels, which comes in higher than average pre-report expectations of 1.672 billion bushels. Compared to the 2013/14 crop, domestic use for corn is expected to be 50 million bushels lower in 2014/15 with the reduction a result of decreased feed use. U.S. exports for the 2014/15 crop are expected to be about 200 million bushels lower, while production is expected to be about 10 million bushels higher than last year at 13.935 billion bushels. If realized, that would mark the second consecutive record corn crop. On the global corn market, ending stocks for the 2014/15 crop are estimated to be 181.73 million metric tons, an increase of 13.31 million metric tons from the 2013/14 crop. The U.S. is expected to again be the world’s largest corn producer with China coming in second, while Japan, Mexico, and the European Union will be the largest importers of corn.

Old crop U.S. soybean stocks were reduced another 5 million bushels from last month’s estimate to 130 million bushels, lower than trade expectations of 134 million bushels. Old crop soybean crush was revised up by 10 million bushes and exports were revised up by 20 million bushels, but those increases were partially offset by an upward revision in imports. New crop 2014/15 soybean ending stocks are expected to be more than double the old crop stocks at 330 million bushels. This comes in slightly higher than the trade expectations of 307 million bushels. Production will be 346 million bushels higher than a year ago at 3.635 billion bushels, which if realized would be a record crop. Soybean crush and exports are both expected to be higher than the old crop numbers. Global soybean ending stocks are also expected to be much higher in 2014/15 at 82.23 million metric tons compared to 66.98 in the 2013/14 crop year. The U.S. is again expected to be the global leader in soybean production with Brazil trailing by just under 8 million metric tons, although Brazil is expected to export slightly more soybeans than the U.S. China will be the world’s largest soybean importer, bringing in 72 million metric tons from other countries, which comprises nearly 2/3 of the world’s imported soybeans.

Old crop U.S. wheat ending stocks were unchanged from last month, although there was some adjustments to where the crop is being consumed. The new crop 2014/15 ending stocks are expected to be 43 million bushels lower than a year ago. Production is expected to be 167 million bushels lower than a year ago at 1.963 billion bushels. U.S. harvested acres for wheat are estimated to be 45.9 million acres, about 700,000 more than last year, but poor crop conditions have caused a reduction in yield estimates compared to a year ago. U.S. food use for wheat is expected to be 10 million bushels higher than a year ago, but there is expected to be 50 million fewer bushels used for feed. This is not surprising given that we are expecting a record corn crop that will likely make corn a more appealing feed grain than wheat. U.S. wheat exports are expected to be 235 million bushels lower than a year ago. Globally, 2014/15 wheat ending stocks are expected to be 890,000 metric tons higher than a year ago, despite a reduction of nearly 17 million metric tons in global production. Global feed use and exports are expected to be lower than a year ago, with countries from the former Soviet Union leading the way in exports, followed by the European Union, the U.S., and Canada. Countries in Northern Africa and the Middle East are expected to be the largest global importers of wheat.

The USDA estimates domestic harvested acres using planted acres from the March Prospective Plantings report and a 10-year average of the harvested-to-planted acres ratio. The yield estimates are projected using a weather adjusted trend model and assume normal growing conditions.