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Feed Outlook - November 2010

Nutrition Economics

Global coarse grain production for 2010/11 is projected to fall 3.6 million tons this month to 1,085.2 million, according to Allen Baker, Edward Allen,Heather Lutman and Yonas Hamda in the latest report from the USDA Economic Research Service.

Sorghum Price Prospects Raised in 2010/11

Sorghum production increased slightly this month, raising total supply 390,000 bushels from last month to 378.9 million for 2010/11. This increase resulted in a corresponding increase in ending stocks to 38.9 million bushels. Reflecting a higher expected corn price and strong marketings to date, the projected price range for sorghum is raised to $4.90 to $5.70 per bushel, up 10 cents on both ends of the range, compared with $3.22 per bushel in 2009/10.

Barley and Oats Prices Lowered

Barley yield is estimated at 73.1 bushels per acre, down 0.5 bushels per acre this month; barley production for 2010/11 is lowered 2 million this month to 180 million bushels. Total use remains unchanged this month at 225 million bushels for 2010/11. As a result, ending stocks are forecast at 86 million bushels, down one million. The projected price range is lowered five cents on the low end of the range and 15 cents on the high end of the range at $3.75 to $4.25 per bushel, compared to $4.66 per bushel last year.

Oats yield is estimated 0.3 bushels per acre lower to 64.3 bushels this month. Oats production for 2010/11 is lowered one million bushels to 81 million bushels. The projected price range is lowered to $2.15 to $2.55 per bushel, down five cents on the low end of the range and down 15 cents on the high end of the range, compared with $2.02 per bushel last year.

This month's reduction in the projected price ranges for barley and oats is made to reflect prices received to date by producers. Although cash prices are expected to remain supported by rising corn prices over the coming months, a large share of barley and oats crops have already been sold since the marketing year began on 1 June. Portions of both crops, particularly malting barley, are also contracted further limiting future gains in their season-average prices for 2010/11.


World Coarse Grain Production: Mostly a US Reduction

Global coarse grain production for 2010/11 is projected down 3.6 million tons this month to 1,085.2 million. Foreign production is trimmed 0.4 million tons to 752.8 million, with increases nearly offsetting reductions. Foreign corn production is up 2.0 million tons to a record 500.0 million, mostly due to an increase for China. Foreign sorghum is up 0.25 million tons to a record 55.0 million, as good rains and soil moisture in eastern Australia provide for favorable sorghum prospects there. However, these increases are more than offset by reductions in oats, down 1.3 million tons; barley, reduced 0.8 million tons; rye, cut 0.3 million tons and millet and mixed grain, each trimmed 0.1 million tons.

China's corn production forecast for 2010/11 is increased 2.0 million tons to a record 168.0 million as recently published data for 2009/10 indicate higher-than-expected corn area. Growing conditions and harvest weather were mostly favourable, so the projected yield is nearly unchanged this month. Corn production estimated for 2009/10 was increased 3.0 million tons to 158.0 million based on the higher reported area. However, the yield reported by the National Bureau of Statistics is hard to reconcile with the unfavourable weather in key growing regions, and USDA is maintaining a lower estimated yield. The current 2009/10 estimate and 2010/11 forecast implies a year-to-year production increase of 10 million tons, and these yield levels reflect the improved weather.

This month's numbers reflect information lowering China's oats area back to 2005/06. There are also smaller reductions to barley and millet area. Barley yields for 2010/11 are also reduced, cutting production 0.7 million tons to 2.4 million. China's oats production projection is reduced 0.2 million tons to 0.4 million, and millet is trimmed 0.1 million, to 1.5 million. The reduction in other feed grains offsets about half the increase in corn.

Australia's coarse grain production for 2010/11 is forecast up 0.6 million tons to 11.5 million. Good yields in eastern Australia are expected to more than offset drought in the west, boosting barley production 0.3 million tons this month to 7.9 million. Good soil moisture boosts prospects for sorghum yields, increasing production 0.25 million tons to 1.95 million.

Moldova reported excellent corn yields for 2010/11, though area was nearly unchanged from the previous year, boosting production 0.2 million tons to 1.4 million.

Russia's coarse grain production is reduced 1.4 million tons this month to 17.3 million. Harvest reports indicate drought reduced yields for oats and rye, cutting oats production 1.0 million tons to 3.5 million and rye production 0.4 million to 2.1 million.

Based on small revisions to several member country harvest reports, EU coarse grain production is reduced 0.4 million tons this month to 138.8 million as 0.1- million-ton reductions each for barley, corn, mixed grain and oats more than offset a small increase for rye. Belarus barley yield was reported lower than expected, reducing production 0.2 million tons to 1.4 million. Chile reported coarse grain production down 0.1 million tons to 1.7 million, with small declines for corn, oats, and barley. Also, Ukraine reported a slight reduction in millet production based on lower area.

Foreign coarse grain beginning stocks for 2010/11 increased 0.3 million tons to 150.9 million, offsetting a small portion of the production decline. More complete trade data for 2009/10 boosted imports and ending stocks for several importing countries, and EU production for 2009/10 was revised up slightly. These increases more than offset a 0.8-million-ton decline for Argentina, where increased corn feed use is estimated for 2009/10, cutting expected stocks.

Changes in Global Coarse Grain Use Nearly Offsetting This Month

World coarse grain use projected for 2010/11 is down 0.2 million tons to 1,124.0 million, as changes for different countries mostly offset each other. The largest increase in projected use is for China, with coarse grain use up 1.5 million tons. Forecast corn feed use is boosted 2.0 million tons this month based on increased production, but reduced use of barley and oats is partly offsetting. Argentina's 2010/11 corn feed use is up 0.5 million tons to 5.5 million as high meat prices boost feed prospects for both 2009/10 and 2010/11. There are small increases this month in projected coarse grain use for Saudi Arabia, Malaysia, Australia, Moldova and Morocco.

Russia's projected 2010/11 coarse grain use is cut 1.3 million tons this month to 20.4 million. Oats feed use is reduced 0.75 million tons due to lower production, and food seed and industrial use is cut a combined 0.55 million for oats and rye. EU coarse grain feed use is projected 0.65 million tons lower this month mostly due to reduced prospects for corn as more is expected to be exported. Corn feed use in the Philippines is reduced 0.3 million tons to 5.0 million as meat imports limit the growth in corn feed use. Corn use in South Korea is reduced 0.3 million tons to 9.1 million as a 0.5-million-ton reduction in corn feed use due to increased feed-quality wheat imports is partly offset by an increase in expected food and industrial use. There are smaller declines in expected coarse grain use for Israel, Chile, Belarus and Ukraine.

World 2010/11 Coarse Grain Ending Stocks Prospects Reduced

Global coarse grain stocks are projected down 3.1 million tons to 160.2 million, the lowest since 2006/07. This sum of local marketing year ending stocks equals 14 per cent of projected 2010/11 use, down from 18 per cent a year earlier.

The largest reduction in projected coarse grain stocks is for Argentina, down 1.3 million tons to 1.6 million. Most of the decline, 1.2 million tons, is in corn, with increased domestic feed use. Serbia is projected to reduce corn stocks 0.5 million tons to 1.2 million as strong prices are expected to encourage exports and reverse the stock buildup that occurred in 2009/10. With reduced production, ending stocks of coarse grain in Russia and Belarus are lowered 0.2 million and 0.1 million tons, respectively. There are also small reductions this month in projected ending stocks for Chile, China and Jordan.

Increased coarse grain ending stocks for 2010/11 are projected this month for a number of countries, but the increases are small. Australia is up 0.4 million tons to 2.6 million because of increased sorghum and barley production. The EU is increased 0.2 million tons to 10.7 million as feed use is reduced more than exports are increased. Increased beginning stocks boost ending stocks 0.1 million tons for both Malaysia and South Korea. There are smaller increases this month for Moldova, Saudi Arabia, Israel, the Philippines, Ukraine, Switzerland and Tunisia.

Further Reading

- You can view the full report by clicking here.

November 2010