USDA: Feed ending stocks remain large, despite uptick in use

21-Mar-2016 - Last updated on 22-Mar-2016 at 08:56 GMT

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Global feed usage is expected to see a boost in use and trade, with drops in production and lower stocks.

The US Department of Agriculture’s (USDA) March Feed Outlook report details more international movement as the domestic feed market remains steady, said officials.

Globally, production of course grains has dropped, said officials. Corn is down 0.4m tons to a level of 969.6m tons.

“World coarse grain supplies in 2015/16 are forecast down 1.6 million tons this month to 1,504.7 million, with beginning stocks reduced 0.9 million and production prospects trimmed 0.7 million,” they said.

However, there have been few changes to the US ‘balance sheet’ in terms of production or use of feed grains, said officials.

“Feed and residual use for the four feed grains plus wheat converted to a September-August marketing year is forecast 0.3 million tons higher at 145.5 million tons for 2015/16,” they said. The change is based on wheat.

Global details

Estimations of South Africa’s 2015/16 corn production have been reduced again based on hot weather and continued drought, said officials. Overall production for the country has dropped to 6.5m tons.

“Some of the very late-planted corn that was seeded when some rain fell has likely failed, and what gets harvested will have limited yield potential,” they said. “This is expected to be South Africa’s smallest corn crop in more than two decades.”

The Philippines also have seen a reduction in their expected 2015/16 corn production from decreased precipitation, said officials.

Expected corn production in Indonesia has been increased by 0.3m tons based on a larger area being planted, they said. Peru and Australia also may see some increase in corn.

Brazil’s 2015/16 beginning corn stock has been reduced by 1.7m tons after their local marketing year trade, which ended in February, they said. Global coarse grain use has been increased by 0.5m tons.

International Trade

Brazil’s corn imports have dropped, while exports were raised 1.5m to a record 34.5m tons, said officials.

“The 2014/15 trade adjustments leave Brazil’s March 1, 2016, stocks at 7.9m tons, down 43 percent from estimated stocks a year earlier,” they said.

World ending stocks in 2015/16 are predicted to be down by 2.1m tons, they said, primarily based on Brazil’s corn exports.

“South Africa’s 2015/16 corn ending stocks are cut 0.3m tons as reduced production and increased use are only partly offset by increased imports,” they said. “EU corn ending stocks are trimmed 0.1 million tons by increased export prospects.”

Additionally, the world trade in corn has been increased by 1.3m tons for the 2015/16 period, they said. Imports are expected to be up for South Africa, the Philippines and Mexico.

Countries seeing an upturn in their corn trade include, Indonesia, South Africa and the EU, they said. “Brazil’s torrid shipment pace reported for February 2016 supports an increase of 1.0 million tons for the trade year to a record 37.5m,” they added.

Domestic production

In the US, the number of grain-consuming animal units in production has increased by 0.15m units, said officials. Feed and residual use for each animal unit is set at 1.55 tons.

There has been an improvement in the import and export of barley for the 2015/16 year, they said, both were raised by 2m bushels with no lasting effect on carryout.

“Total 2014/15 food, seed, and industrial use is projected at 6,559.8m bushels,” they said. “The corn for ethanol use projection for 2015/16 is unchanged at 5,225m bushels.”

The midpoint price for most feed grains remained the same, but the expected mid-price of oats for 2015/16 was dropped by $0.05, said officials. Price ranges were curtailed for other feed grains including corn, sorghum and barley.

“The projected corn price range for 2015/16 is narrowed 5 cents per bushel on both ends to $3.40 per bushel and $3.80 per bushel, leaving the midpoint unchanged at$3.60 per bushel,” they said.

What’s next?

The Prospective Plantings and Grain Stocks report is set to come out at the end of March, said USDA officials. That report will offer a survey-based look at plantings for 2016.

The information contained in the report, however, is subject to change based on weather and conditions during spring planting, they said.

“For 2015, the March intentions were 1.2m bushels higher than the final planted estimate,” they said. “In the past 10 years, the March intentions were below the final estimate of corn acres four times and above the final planted area estimate six times.”