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Soy outlook improves...

USDA cuts estimate of cotton USDA is projecting a slightly smaller U.S. cotton crop, lower U.S. ending stocks for soybeans and wheat, and stiffer competition for U.S. corn and rice producers.

Cotton U.S. cotton production is down slightly from last month, according to USDA's December crop production report, as gains in yield for Arkansas, California and South Carolina did not offset declines for Louisiana, Mississippi, Missouri, Oklahoma and Texas.

Survey and ginnings data indicated a 200,000-bale decrease in Texas production from the November forecast, which more than offset a 150,000-bale increase in California.

The agency forecast cotton production at 17.4 million 480-pound bales, down less than 1 percent from last month's estimate of 17.5 million bales, but up 3 percent from 1999. Yield is expected to average 619 pounds per acre, down 3 pounds from last month.

In its December supply and demand estimate, USDA forecast slightly lower domestic mill use based on weak cotton consumption to date and a slowdown in overall textile business. Forecast ending stocks remain at 3.9 million bales, 22.3 percent of total use.

World stocks edged higher from last month due to significant changes in production and decreased consumption. Production increases for Syria, Brazil, and Turkey nearly offset decreases for India, Uzbekistan, the African Franc Zone countries, the United States and Australia.

World consumption was reduced slightly, reflecting decreases for India, Mexico, and the United States, which was offset partially by increases for Brazil and Russia.

Rice USDA made no major changes in rice supply and use from last month. The season-average price projection for 2000-01 was lowered 25 cents per cwt. on each end to $5.50 to $6.

The lower price projection reflects prices through the first four months of the marketing year and the expectation that prices will continue to be under pressure the remainder of the marketing year because of stiff competition for limited global import markets.

Global production, consumption, and ending stocks for new crop rice were increased from a month ago, while imports and exports were lowered. World rice production is projected at 400.6 million tons, up nearly 3 million tons from last month, but down over 4 million tons from the 1999-2000 record.

The increase in production is the result of larger crops projected for Indonesia, Thailand, Egypt, the Philippines, Vietnam, and Spain. World consumption is projected at a record 402.7 million tons, up 1.5 million tons from last month and an increase of over 2 million tons from 1999-2000.

Global ending stocks are projected at 62.7 million tons, up 3.5 million from last month, but down 2.1 million tons from the 1999-2000 record. Import projections for 2000-01 were lowered for Indonesia and the Philippines. Export projections for 2000-01 were reduced for India, Thailand, Vietnam and China and increased for Japan and Egypt.

Soybeans A European Union ban on meat and bone meal, which should be implemented by Jan. 1, 2001, is expected to add approximately 2 million tons of alternative protein feed needs on a soybean-meal equivalent basis in the 2000-01 marketing year.

As a result, an additional 1.3 million tons of soybean meal likely will be consumed this marketing year in the EU. Compared with last month, EU soybean imports are forecast to rise 900,000 tons and soybean meal imports are forecast up nearly 600,000 tons. Germany and France are expected to favor soybeans in the import mix due to their restrictions on use of animal fats for food and feed use.

U.S. soybean exports are forecast at 975 million bushels, up 25 million from last month. Soybean crush is up 5 million bushels to 1.605 billion bushels in response to an increase of 200,000 short tons in soybean meal exports. U.S. soybean stocks were reduced 30 million bushels this month to 320 million bushels, still above last year's carryover of 288 million bushels.

U.S. season-average soybean prices for 2000-01 were projected at $4.50 to $5.10 per bushel, up 10 cents per bushel from last month.

China's soybean crop is forecast at 15.4 million tons, up 400,000 from last month. Argentina's soybean crop was increased 500,000 tons this month to a record 23.5 million tons based on higher area, mainly at the expense of sunflowerseed.

Wheat The USDA December supply and demand estimate lowered U.S. ending stocks of wheat by 30 million bushels from last month because of larger exports and food use. The projected price range was narrowed 5 cents on each end to $2.50 to $2.70 per bushel. Global 2000-01 supply and use projections are little changed in aggregate from last month.

Corn USDA is projecting an increase of 75 million bushels in corn ending stocks from last month as smaller global imports and increased competition lowered export prospects. The projected price range for corn is down 5 cents on each end to $1.65 to $2.05 per bushel.

The largest impact on potential U.S. 2000-01 corn exports is a 1-million-ton increase in Argentina's exports for its 1999-2000 marketing year, due to an upward revision in the 1999-2000 Argentine corn crop and a strong export pace in recent months.

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