December WASDE Numbers Released

The USDA released its latest WASDE numbers Friday.  The USDA saidys the U.S. 2016/17 all wheat supply and demand estimates are unchanged from November.  The marketing year average price received by producers is unchanged at the midpoint, but the range is narrowed $0.20 per bushel to $3.60 to $3.80.Global wheat production for 2016/17 is raised 6.5 million tons led by a 4.7-million-ton increase for Australia, a 0.9-million-ton increase for China, and 0.4-million-ton increases for both the EU and Brazil.

Taking a  look at livestock numbers, the 2016 forecast of total red meat and poultry production is raised from last month as higher forecast beef production offsets lower poultry and pork production.  Beef production is raised on the current pace of slaughter.  Pork production is lowered due to counter-seasonally lighter-than-expected carcass weights this quarter. Broiler and turkey production is forecast lower, largely reflecting the slower pace of slaughter in the fourth quarter. For 2017, pork and broiler production forecasts are unchanged from the previous month, but beef and turkey production forecasts are lowered.

However, the ensuing decline in fed cattle slaughter will be slightly offset by higher expected cow slaughter. The turkey production forecast is lowered from the previous month as a slower pace of slaughter is expected in the second half of the year. Egg production is forecast higher for both 2016 and early 2017.

Cattle prices are forecast higher for the remainder of 2016 and through the first half of 2017 as demand has improved and is expected to carry into early 2017. Hog prices are unchanged. Broiler prices are raised for 2016 and 2017 on recent price strength. Turkey prices are lowered in 2016 and 2017 on weaker-than-expected demand. For 2016, egg prices are lowered reflecting current price data, but the price forecast for 2017 is unchanged.

The milk production forecast is lowered for both 2016 and 2017 as slower growth in cow numbers more than offsets slightly higher growth in milk per cow.

Price forecasts for cheese and butter are raised for 2016 on current price strength.

No changes are made to this month’s 2016/17 U.S. corn supply and use projections. Forecast U.S. corn exports are unchanged this month, despite a sales and shipment pace that is well above a year ago. In recent years, early-season U.S. corn export commitments have not been a robust indicator of final exports, and it is expected that the U.S. will likely face strong competition from South America beginning in the first part of 2017.

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