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Feed Outlook Summary (July 14, 2015)

Core Content

This report provides an overview of the U.S. and global feed grain outlook for the 2015/16 marketing year, including production, use, and price forecasts. It also highlights changes in supply and demand for key grains like corn, sorghum, barley, and oats, as well as the impact of weather, trade dynamics, and policy on the market.

Key Highlights

U.S. Corn Outlook

• Planted Acres: Estimated at 88.9 million acres for 2015/16, a 2% decrease from the 2014/15 estimate and 0.3 million lower than March intentions.
• Harvested Area: Forecast at 81.1 million acres, down 599,000 acres from June.
• Production: Reduced by 100 million bushels to 13,530 million, with the national average yield unchanged at 166.8 bushels per acre.
• Beginning Stocks: Lowered by 97 million bushels to 1.88 billion bushels.
• Feed and Residual Use: Reduced by 25 million bushels to 5,275 million.
• Ethanol Use: Increased by 25 million bushels.
• Exports: Reduced by 25 million bushels to 1,875 million.
• Ending Stocks: Reduced by 172 million bushels to 1,599 million.
• Price Outlook: Midpoint price for 2015/16 is projected to rise by 25 cents to $3.75 per bushel, reflecting tighter supplies and rising corn prices.

U.S. Sorghum Outlook

• Planted Area: Increased by 12% (940,000 acres) from the March estimate, with significant gains in Kansas, Arkansas, and Texas.
• Harvested Area: Forecast at 7.8 million acres, up 1.4 million from the 2014/15 estimate.
• Production: Raised by 70 million bushels to 505.0 million, the highest since 2001/02.
• Exports: Increased by 55 million bushels to 390 million, supported by strong demand from China.
• Ending Stocks: Projected at 1,504.2 million bushels, down 4.3 million tons from the previous month.
• Midpoint Price: Forecast at $4.60 per bushel for 2015/16, with a range of $4.20 to $5.00.

U.S. Barley Outlook

• Harvested Area: Up nearly 500,000 acres from the previous year.
• Production: Increased by 18% to 208 million bushels.
• Yield: Forecast at 71.3 bushels per acre.
• Beginning Stocks: Increased by 25 million bushels to 78.7 million.
• Feed and Residual Use: Reduced by 1.8 million bushels to 38.2 million.
• Exports: Increased slightly to 14.3 million bushels.
• Ending Stocks: Raised by 6.5 million bushels to 311.7 million.
• Midpoint Price: Projected at $4.60 per bushel for 2015/16, with a range of $4.20 to $5.00.

U.S. Oats Outlook

• Production: Forecast at 83.64 million bushels, up nearly 14 million bushels (20%) from the previous year.
• Yield: Increased to 68.6 bushels per acre.
• Beginning Stocks: Raised to 58.4 million bushels, up 20.6 million from the previous month.
• Feed and Residual Use: Reduced to 69.3 million bushels due to increased stocking.
• Imports: Reduced to 95 million bushels, a 11% decrease from the previous year.
• Midpoint Price: Forecast at $2.40 per bushel, with a range of $2.10 to $2.70.

Global Coarse Grain Outlook

• Global Production: Reduced by 1.0 million tons to 1,275.0 million tons for 2015/16, with the U.S. and EU contributing to the decline.
• Corn Production: Reduced by 2.2 million tons to 987.1 million, with the U.S. and EU leading the drop.
• Sorghum Production: Increased by 1.8 million tons globally, driven by U.S. expansion.
• Global Ending Stocks: Reduced by 5.3 million tons to 222.1 million, with China's stocks increasing due to higher production.
• Global Trade: Increased by 1.0 million tons to 125.3 million for the 2015/16 trade year, with Brazil and Argentina as major exporters.

Main Views and Key Information

• Supply and Demand Dynamics: Reduced U.S. corn supplies and rising prices support higher corn prices for the 2015/16 marketing year.
• Weather Impact: Adverse weather conditions in the EU, including drought and heat, negatively affected production, while a wet spring in the U.S. supported sorghum planting.
• Export Trends: U.S. corn exports are expected to face competition from Brazil and Ukraine, with reduced competitiveness due to higher prices.
• Use Patterns: Increased ethanol use and exports are expected to drive higher demand for corn, while feed and residual use is projected to decline.
• Stock Adjustments: Ending stocks for 2015/16 are expected to decrease due to lower supplies and higher use, while beginning stocks are also reduced.
• Price Projections: Prices for all feed grains are expected to rise due to reduced supply and increased demand.
• Regional Variations: Countries like China and Brazil are expected to see increased corn use and exports, while others such as the Philippines and North Korea face reduced production and supply prospects.

Special Articles

• "Boutique Brews, Barley, and the Balance Sheet" (January 2015)
• "World Corn Use Expands Despite High Prices in 2012/13" (June 2013)
• "Animal Unit Calculations—First Projections for the 2013/14 Crop Year" (May 2013)
• "Characteristics and Production Costs of U.S. Corn Farms, Including Organic, 2010" (EIB-128, September 2014)

Summary

The 2015/16 U.S. feed grain outlook shows a reduction in corn planted acres and production, with increased sorghum, barley, and oats. This leads to tighter supplies and higher prices for corn. Sorghum production is expected to rise significantly, supporting increased exports, particularly to China. Barley and oats also show positive production trends, though barley use is projected to decline due to export demand. Globally, coarse grain production is reduced, especially for corn, with the U.S. and EU leading the decline. However, increased production in Brazil, China, and Russia partially offsets the drop. Global ending stocks are projected to fall, with China expected to hold the largest share of global corn stocks. Trade is expected to increase, with Brazil and Argentina as major exporters. Overall, the outlook reflects a combination of reduced supply, increased demand, and shifting trade dynamics influencing global feed grain markets.