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Economic Research Service Feed Outlook Summary - April 14, 2016

Core Content

The USDA Economic Research Service (ERS) released the Feed Outlook for April 14, 2016, providing a comprehensive update on the U.S. and global outlook for corn, sorghum, barley, and oats. The report highlights changes in planting intentions, utilization patterns, stock levels, and price forecasts for the 2015/16 and 2016/17 marketing years.

Main Views and Key Information

U.S. Domestic Outlook

• Corn Planting Intentions: U.S. producers intend to plant 93.6 million acres of corn for the 2016/17 crop, a 6% increase from the 2015/16 final planted area of 88.0 million acres. This is the third highest planting area since 1944.
• Corn Feed and Residual Use: For the 2015/16 marketing year, U.S. corn feed and residual use was lowered by 50 million bushels to 5,250 million, due to slower-than-expected disappearance.
• Corn Price Forecast: The projected corn price range for 2015/16 was lowered by 10 cents on the high end to $3.40 to $3.70 per bushel, with the midpoint reduced by 5 cents to $3.55 per bushel.
• Sorghum Domestic Use: U.S. sorghum FSI disappearance was raised by 25 million bushels to 125 million, driven by increased use in ethanol production. Sorghum exports were reduced by 10 million bushels to 315 million, as China reduces purchases.
• Oats Utilization: Projected oats feed and residual use was reduced by nearly 1 million bushels, leading to a 6.0-million-bushel increase in ending stocks to 65.2 million bushels, the highest since 2010/11.
• Barley Utilization: Slight reduction in barley FSI use by 0.7 million bushels to 216.3 million bushels, with a 12% decline in intended barley acreage for 2016/17 to 3.1 million acres.

Global Outlook

• Coarse Grain Production: Global 2015/16 coarse grain production is forecast down by 2.2 million tons, with Sub-Saharan Africa and Argentina being key contributors to the change.
• Sudan and Ethiopia: Sudan's production dropped by 3.3 million tons to 2.9 million, mainly due to drought. Ethiopia's production decreased by 2.4 million tons to 10.0 million, with significant drops in sorghum and millet.
• World Coarse Grain Supplies: Global 2015/16 coarse grain beginning stocks increased by 2.5 million tons to a record 243.7 million, supporting higher total supplies by 0.3 million tons to 1,505.0 million.
• World Coarse Grain Use: Projected global use is lowered by 1.7 million tons to 1,260.0 million, with Sub-Saharan Africa showing the largest decline in food use.
• World Coarse Grain Ending Stocks: Ending stocks are forecast at 245.1 million tons, a record high, driven by increased stocks in Japan, the U.S., the EU, and other countries.
• Corn Trade: Global corn trade for 2015/16 is projected to reach a record 133.8 million tons, with Vietnam, Mexico, and Egypt showing significant import increases. Argentina and U.S. also saw notable export gains.
• Sorghum Trade: Global sorghum trade is projected to decrease, with China and Japan reducing imports, while Mexico increased imports due to reduced local production.
• Barley Trade: Global barley trade is projected up by 0.5 million tons to 26.8 million, with Saudi Arabia, Iran, and Morocco as key importers. Australia and India saw reductions in exports.

Key Highlights

• Corn remains the dominant feed grain, with increased use in ethanol production and reduced use in feed and residual.
• Sorghum is shifting from export to domestic use, especially in ethanol, due to lower prices and competition with corn.
• Oats and barley show declines in planting intentions and utilization, with oats experiencing the largest increase in ending stocks.
• Global supply and demand are influenced heavily by weather conditions, particularly in Sub-Saharan Africa and Argentina.
• U.S. exports remain competitive, especially in corn, with a record forecast for the October-September 2015/16 trade year.

Conclusion

The report underscores the dynamic nature of global and domestic feed grain markets, driven by planting decisions, utilization trends, price fluctuations, and weather impacts. While U.S. corn and sorghum show mixed outcomes in terms of use and exports, global supplies are expected to remain at record levels, influenced by increased beginning stocks and reduced use in some regions.