Grains

Near the end of August, roughly 100 scouts will head to the fields across the corn belt to gauge the nation’s corn and soybean crop’s yield potential with the Pro Farmer Midwest Crop Tour. Because the crop is further along in maturity than most years, Pro Farmer analysts expect results to be very close to actual yields. “Our yield methodology has a tendency to be more accurate, the more mature crops are,” says Pro Farmer editor Brian Grete. “In 2012 for instance, where we were out scouting and there were some combines rolling we got very close because when you're measuring a mature crop there isn’t much more than it will add or subtract at that point in time.” The methodology used by scouts will be the same as it is every year. “Methodology wise there will be no impact whatsoever,” Grete explains. “We still do the same thing that we always do.” From August 20-23, scouts will be pulling back husks and checking pods on roughly two-thirds of the nation’s corn and soybean acres. Pro Farmer will release their national corn and soybean yields and production estimates at 1:30 CT on Friday, Aug. 24. These estimates include the data gathered throughout the week, plus other factors – how analysts think the crop will finish, any changes to harvested acreage, and areas outside of the Tour footprint, etc. Because of these other factors, the Friday estimates are Pro Farmer’s and not associated with Crop Tour. All of the data released Monday through Thursday is sample-driven Tour data.

If the appearance of the soybean crop going into late July predicts how it will yield, the 2018 crop in Illinois is going to be a high-yielding one. The crop in Illinois was rated at 78% good + excellent (G+E) as of July 22. Conditions across the U.S. soybean growing regions are somewhat variable, but the 2018 crop is in good condition overall. I have examined Illinois soybean crop ratings in the second half of July over the past decade to see how well they predict yield. The drought year 2012 was in a category by itself, with a G+E rating of less than 10% by late July. Ratings were only about 50% G+E in 2015, but in six of the past ten years—2008-2011, 2013, and 2017—ratings were around 60% G+E in late July. In 2014, 2016, and now in 2018, ratings were high, at 75 to 80% G+E. With a few exceptions, soybean crop ratings have tended either not to change much after mid-July or to drift up slowly. Exceptions included 2008, when crop conditions rose by about 20 points from late July to mid-August, and 2011, when ratings dropped about 20 points during the same period. In 2017, ratings drifted down after June, from 70% G+E in early July to less than 60% by late August. Illinois soybean yields were 50 bushels per acre or less in years with late July crop ratings of 60% G+E or less, with the exception of 2010, when the crop yielded 51.5 bushels. In both 2015 and 2017, mediocre late-July ratings failed to predict high yields, of 56 in 2015 and 58 in 2017. In 2014 and 2016, high ratings did predict high yields, of 56 and 59, respectively. Overall, high soybean crop ratings by late July tend to predict high yields, while low to medium ratings can sometimes be offset by August weather, resulting in average or even above-average yields. Because high crop ratings in late July predict high yields, we expect high soybean yields in 2018. Another factor favoring soybean crop prospects this year is the rapid pace of crop development. Planting did not start early this year but it was finished early, and with May and June warmer than average, the crop was off to the races, with 44% of the crop flowering by the end of June. This continued into July, with 44% setting pods by July 15 and 66% setting pods by July 22. The 5-year average shows 24% of the crop setting pods by July 22, and about 50% by August 1. So the 2018 crop reached 50% podsetting about two weeks earlier than normal. An early start to podsetting should be favorable, as long as there’s enough water to keep the crop in good shape. The amount of time between podsetting and loss of green leaf color (both recorded by NASS) estimates the duration of the seedfilling period, which is well-correlated with yield. On average, the Illinois reaches 50% leaf color change by about September 15, or about 45 days after 50% podsetting. The 2018 crop needs only to fill seed through the end of August to reach 45 days. With somewhat higher temperatures and longer days in August than in September, having seedfilling begin and end two weeks early should be favorable for seedfilling rate and yield. We don’t very well understand what signals the end of seedfilling, but both temperature and daylength have some influence. The number of pods that are filling, maturity rating of the variety, and other factors have some effect as well. If temperatures remain normal and the crop has enough water, the need to have days shorten to a certain length before seedfilling stops should mean a somewhat longer filling period this year; this should add yield. But with the early start, seedfilling should be adequate for good yields this year even if it ends by early September. Other positive signs for the soybean crop this year are the excellent plant stands in most fields, the excellent condition and color of the canopy, and the large number of pods already formed and still forming. The canopy is outstanding in most fields now, and we expect it to take on a darker green color as podfilling gets up to full speed over the next two weeks. I have not heard much about fertilizer nitrogen application this year, but with the canopy in such good shape, it seems unlikely that the crop will need extra N. A fair number of fields have received fungicide, and probably insecticide as well, though we can probably call the “race” between canopy development and insect feeding in favor of the crop this year. Soybean plants have grown tall due to warm temperatures and adequate water in most fields. Plants are at or close to their final height in fields where seedfilling has gotten underway. Periods of drier weather and warm temperatures have provided enough competition for water to keep the canopy in most fields from getting heavy enough to cause internal shading that can limit pod formation or seedfilling rates. We can probably expect some lodging, especially in 30-inch rows where plants are already tall. Moderate lodging as pods fill is a signal that pods are heavy, so is not a concern, especially if plants just “lean” without affecting light interception. Counting pods and seeds on plants in mid-season is neither a lot of fun nor an overly accurate way to estimate soybean yield potential. But with pods setting early this year, it’s a little easier to see how yield potential is shaping up. Pod numbers and number of seeds per pod appear to be very good in most fields. We’d like to see 4-5 pods filling at each middle node, and 30 to 50 pods per plant. A field with 130,000 plants per acre, 40 pods per plant, 2.8 seeds per pod, and 2,700 seeds per pound at harvest projects a yield of 90 bushels per acre. While we don’t expect such yields in most fields, we have seen yields this high or higher in some fields in each of the past four years. Based on what we see now, we expect to see this in some fields in 2018 as well.

While USDA continues to show corn and soybean conditions are impeccable, some farmers say crop conditions reports don’t tell the full story. According to Monday’s USDA Crop Progress Report, 72% of the nation’s corn crop is rated good to excellent. Last year only 61% of the crop was rated good to excellent this same week. Soybeans are doing well too, USDA says. This week’s report shows 70% of the soybean crop is rated good to excellent. Still, it’s clear by looking at USDA data that there are some problem areas across farm country. Corn crops in Missouri, Kansas, North Carolina and Texas continue to struggle from drought and less than 10% of each state’s corn crop is rated excellent. For comparison, Wisconsin’s crop is rated 31% excellent. The situation is similar for soybeans. Soybean crops in Kansas, Michigan, Missouri, and North Carolina continue to struggle. According to Chip Flory, Farm Journal economist and AgriTalk host, farmers at the Leading Edge conference hosted by Pro Farmer last week say their corn and soybean crops are either great or terrible. There aren’t many reporting average crops. “When we did the early bird session, and everybody was talking about their crop conditions, there was a whole lot of ‘This is going to be an eight to a 10 crop on a one to 10 scale.’ There were the guys that said, ‘This is a three to five crop for us’ and there wasn't a whole lot in the ‘Well this looks like it's going to be an average crop right at five’ category,” Flory said on AgriTalk this week. “It seems like they've either got a good crop or they're really suffering this year.” One Illinois farmer who was on AgriTalk’s farmer forum last week says his crops look great, and in his area, crops will be harvested that have never made it out of the field before. “We are in a very fortunate area here right now. I'm in my front yard and to have green grass this time of year where we have a lot of sand here in this country is quite unusual,” Rock Ketchnik explained. “We've been very fortunate and got a lot of timely rains, and not excessive rains. It's not been yet, but we're getting closer every day and this is very, very unusual some of these areas we're going to harvest crops and we never have before.” Minnesota farmer Brad Nelson says his crops look average, but on a whole his county will produce sub-average yields. “We had an opportunity that things look pretty good for me personally, I am basically happy with my corn crop,” he told Flory. “I’ve got a few acres that are lost and some that don't have good color, but with the soil saturation we've had and that sort of thing it’s not surprising. I probably lost, you know, six or 7% of my beans to drown outs.” Nelson considers his soybean crop average for his farm but doesn’t expect more than average. “I will say our county you know is going to have sub-average crop,” he added. “I drove northwest to me yesterday for a stretch through the back roads and stuff, and there's a lot of ugly fields on the route I took.”

In today’s USDA Crop Progress Report, the agency indicated corn and soybean crops around the country are still maturing at record pace. The nation’s corn crop is well ahead of an average year with 81% of the crop silking compared to the five-year-average of 62%. Colorado corn made the most progress silking this week with an increase of 38% week over week. This week USDA reported 18% of the nation’s corn is in the dough stage. Texas is leading the way in maturity with 65% of the crop at the dough stage. Unfortunately, Texas is also suffering from significant drought which has caused some farmers to harvest earlier than usual. USDA made only a minor change to conditions, bumping the amount of corn rated excellent up by one percentage point. Similarly, soybeans continue to toward the finish line at record pace. USDA says 44% of the nation’s soybeans are setting pods. Compared to 27% the same week last year and a 23% five-year-average the crop is making impressive progress. USDA bumped the percentage of soybeans rated excellent by two percentage points, up to 18%. Meaning 70% of the crop is rated good to excellent. When you look at USDA’s figures on crop maturity this week compared to the 2017 growing season it appears crops are roughly one week ahead of last year. For example, for the week of July 22, 2017, 63% of the nation’s corn was silking and 27% of soybeans were setting pods. Last week, USDA reported 63% of the nation’s corn was silking and 26% of the soybeans were setting pods.

Wheat ranks third among U.S. field crops in planted acreage, production, and gross farm receipts, behind corn and soybeans. Production has, however, dropped off over the past decade. USDA estimates U.S. farmers planted 46 million acres to wheat for the 2017-2018 growing season, down from 50 million in 2016-2017 and over 63 million in 2008. In contrast, U.S. farmers this spring planted over 90 million acres each of corn and soybeans. Market fundamentals certainly influence planting decisions, but steady gains in corn and soybean yields also have helped motivate farmers to plant those crops while gains in wheat yields have fallen behind. According to a University of Minnesota study, global wheat yields are increasing at a rate of 0.9% annually, compared with 1.6% for corn and 1.3% for soybeans. USDA figures show similar trends. A shortage of research finding for wheat breeding plays a key role in the yield trends, says Steve Joehl, Director Research & Technology at the National Association of Wheat Growers (NAWG). He estimates that total annual spending on wheat-breeding research averages around $150 million, compared with near $2 billion for soybeans and $3 billion for corn. Private-sector seed companies account for the lion’s share of funding for corn and soybean research, while most funding for wheat projects comes from USDA or state wheat-producer checkoff programs, Joehl says. Two key barriers have limited progress in wheat-breeding research. Hybridization First, as a self-pollinating plant, hybridization in wheat has lagged far behind corn. Farmers potentially can plant harvested wheat for several years with minimal decline in yields, unlike corn, where farmers need to purchase certified F1 hybrid seed every season to capitalize on hybrid vigor and produce cost-effective yields. This makes it difficult for seed companies to generate adequate returns on their investments in developing new wheat varieties, Joehl says. That could change over the next few years though, as researchers develop systems for producing hybrid wheat seed, a task more difficult than producing hybrid corn, but possible. According to Texas A&M University wheat breeder Amir Ibrahim, PhD, breeders can cross inbred wheat lines using advanced techniques to create pollen-producing or seed-producing plants. Crossbreeding those lines can produce more resilient, higher-yielding hybrids. The process is, however, significantly more expensive and time-consuming than creating new corn hybrids. The Texas A&M researchers currently are working under a three-year USDA grant, funding just under $1 million, titled “Developing the Tools and Germplasm for Hybrid Wheat.” Commercial wheat hybrids have seen some limited use in Europe, and at least three major seed companies have indicated they will launch commercial wheat hybrids by the early 2020s. Researchers believe lower seeding rates and higher yields will help account for higher costs for hybrid wheat seed. GMO perceptions Joehl also notes that wheat, almost exclusively a food crop in the United States, experiences more market scrutiny over genetic engineering than crops such as corn and soybeans, which are used mostly for livestock feed. Joehl says downstream resistance to genetically modified organisms (GMO) in food crops has significantly slowed progress in addressing production challenges including grain quality, weed management, insect and disease resistance, cold and drought tolerance and yields. Those pressures were evident in the early 2000s, when Monsanto developed a glyphosate-resistant GMO wheat variety. The company received FDA approval use of the GMO wheat in food, but withdrew its EPA application to market the seed in 2004 due to resistance from export and domestic customers. The issue of GMO wheat received more negative publicity in 2013, when testing confirmed the presence of the unapproved GMO variety in a commercial field in Oregon.

In a nationwide class action, Syngenta will pay a $1.51 billion settlement to U.S. corn farmers, grain handling facilities and ethanol plants. The settlement covers corn priced after Sept. 15, 2013. All farmers are eligible for the settlement, including those who might have opted out of previous Syngenta lawsuits. When funds are available, farmers must submit a claim form to collect—notices will likely be mailed and farmers will need to submit forms, opt out or object to agreement terms. After claims are submitted, U.S. District Judge John W. Lungstrum in the District of Kansas will decide whether to officially approve of the settlement. If the settlement is approved, it will be disbursed among the following: Corn producers, some landlords, grain handing facilities and ethanol facilities that submit eligible claims. Court-approved attorney fees. Service awards to plaintiffs who prosecuted the case. Fees to the appointed Special Masters. Cost relating to notice and class administration. Lawyers for the plaintiffs expect funds to be distributed as early as the first half of 2019. The amount class members receive depends on the amount of corn individuals had priced for sale between Sept. 15, 2013 and April 10, 2018. This settlement comes after years of litigation. Plaintiffs alleged Syngenta’s introduction of MIR162, Agrisure Viptera, corn before it was approved in China lead to loss of income. Chinese ports rejected loads of corn that tested positive for the trait. “We are very pleased with this outcome,” said the plaintiff’s counsel in a joint statement. “America’s corn farmers and related businesses were hurt economically and this settlement will provide fair compensation for their damages. It is an equitable result for all involved.” In a statement provided to Farm Journal, Syngenta said: “This settlement does not constitute an admission by either side concerning the merits of the parties’ allegations and defenses. With this litigation largely resolved, Syngenta will continue its focus on agricultural innovation, and continues to believe American farmers should have access to the latest U.S.-approved technologies to help them increase their productivity and crop yield.”

The nation’s corn and soybean crops continue to mature at a record pace, according to this week’s USDA Crop Progress report. For the week ending July 15, the agency reported 63% of the nation’s corn crop was silking. That’s nearly double the five-year average for this week, which is 37%. A shocking 93% of corn in Illinois is silking, compared to the five-year average of 57%. Similarly, in Indiana 74% of the cornis silking compared to the five-year-average of 37%. Even in Iowa, despite wet conditions that have stunted some corn crops, 68% of the corn is silking, which is well ahead of the five-year-average of 32%. “In general crops are maturing quickly, with both corn and soybean development more than a week ahead of the five-year average,” says Iowa Secretary of Agriculture, Mike Naig. While the good to excellent categories lost a few points this week, USDA maintains the corn crop is still in pristine condition. Soybeans are growing faster than normal this year, too. This week, USDA reports 26% of the nation’s soybean crop is setting pods. The five-year-average is 11%. Similar to corn, soybean crops in Illinois, Indiana and Iowa are moving toward maturity quickly with 44%, 37% and 21% of the crops setting pods, respectively. Across the country, soybeans continue to thrive, according to USDA. While the agency did shave off a few percentage points in the good rating, 69% of the crop is rated good to excellent, compared to the five-year average of 61%. USDA does recognize a few pockets of farm country where soybeans are struggling, namely, Arkansas, Kansas, Missouri and North Carolina which all have a minimum of 15% of their soybeans rated poor to very poor this week. With corn and soybeans growing much faster than they usually do, the question now on many farmers’ minds is, will harvest come early? Future USDA Crop Progress reports are likely to provide the answer.

NOTE: Consistent with established practices, this report only considers those trade actions which are in place or have had formal announcement of effective dates as of the time of publication. Further, unless a formal end date is specified, this report also assumes such actions are in place throughout the time period covered by these forecasts. NOTE: This report adopts U.S. area, yield, and production forecasts for winter wheat, durum, other spring wheat, barley, and oats released today by the National Agricultural Statistics Service (NASS). For rice, corn, sorghum, soybeans, and cotton, area estimates reflect the June 29 NASS Acreage report, and methods used to project production are noted on each table. The first survey-based 2018 production forecasts for those crops will be reported by NASS on August 10. WHEAT: Projected U.S. 2018/19 wheat supplies are raised 74 million bushels on increased beginning stocks and higher production. Forecast 2018/19 U.S. wheat production is raised 54 million bushels to 1,881 million. The NASS July Crop Production report provides survey-based production forecasts for all wheat classes for the first time in the 2018/19 crop year. The production forecast for durum and other spring wheat are up from last year’s low level due to improved yields and higher spring wheat area. Winter wheat production is down slightly from the June forecast. Ending stocks for 2018/19 are raised 39 million bushels this month but are 11 percent below last year’s revised stocks. The 2018/19 season-average farm price is lowered $0.10 per bushel at the midpoint to a projected range of $4.50 to $5.50. Foreign 2018/19 wheat supplies are decreased 9.3 million tons primarily on lower production, which is the smallest in three years. The production declines are led by a 4.4-million-ton reduction for the EU reflecting continued dryness especially in the north. Australia, Russia, and Ukraine are lowered 2.0 million, 1.5 million, and 1.0 million tons, respectively, and also reflect continued dryness. China production is reduced 1.0 million tons on lower harvested area as reported by the Ministry of Agriculture. Global 2018/19 exports are lowered 1.9 million tons on decreased supplies. EU exports are reduced 1.5 million tons and Australia and Russia are both lowered 1.0 million tons. These export reductions are partially offset by a 1.0-million-ton increase for Canada and a 0.7-million-ton increase for the United States. Total foreign consumption for 2018/19 is lowered 2.3 million tons on both lower food and feed and residual use. With global supplies declining more than projected use, world ending stocks are reduced 5.3 million tons to 260.9 million. COARSE GRAINS: This month’s 2018/19 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and lower ending stocks. Corn beginning stocks are lowered 75 million bushels as higher forecast exports and food, seed, and industrial (FSI) use more than offset lower feed and residual use in 2017/18. Increased 2017/18 exports are based on record-high shipments during the month of May and export inspection data for June. Current outstanding export sales are also record high. FSI use is raised as a projected 25-million-bushel increase in the amount of corn used for ethanol, based on reported use to date, is partially offset by a decline in the amount of corn used for glucose and dextrose. Feed and residual use is lower based on indicated disappearance during the first three quarters of the marketing year in the June 29 Grain Stocks report. For 2018/19, corn production is forecast 190 million bushels higher based on increased planted and harvested areas from the June 29 Acreage report. The national average corn yield is unchanged at 174.0 bushels per acre. During June, harvested-area weighted precipitation for the major corn producing states was above normal. While silking, as reported in the Crop Progress report, is ahead of the recent historical average, for much of the crop, the critical pollination period will be during middle and late July. Projected feed and residual use for 2018/19 is raised 75 million bushels, mostly reflecting a larger crop and a forecast reduction in the amount of corn used to produce ethanol. FSI use is lowered 60 million bushels based on a 50-million-bushel reduction in the forecast amount of corn used to produce ethanol, and a 10-million-bushel decline in amount of corn used for glucose and dextrose. Exports are raised 125 million bushels based on expectations of reduced competition from Argentina, Brazil, and Russia. Small revisions are made to historical trade and utilization estimates based on the 13th month trade data revisions from the Census Bureau. With use rising more than supply, stocks are lowered 25 million bushels to 1.552 billion. The season-average corn price received by producers is lowered 10 cents at the midpoint for a range of $3.30 to $4.30 per bushel. Oat production is virtually unchanged and barley production is up 8 million bushels reflecting area adjustments in the Acreage report and higher barley and lower oat yields in today’s Crop Production report. Sorghum production is raised based on the higher area reported in the Acreage report. This month’s 2018/19 foreign coarse grain outlook is for lower production, trade, and stocks relative to last month. Russia corn production is lowered, reflecting reductions to both area and yield. Extreme heat and dryness in the Southern and North Caucasus districts during the month of June is expected to reduce yield prospects. Corn production is raised for the EU, but lowered for Canada. Barley production is reduced for Russia, Australia, and the EU, but raised for Canada. For 2017/18, Brazil corn production is reduced based on the latest government statistics. Major global trade changes for 2018/19 include lower corn exports for Russia, more than offset by increased exports for the United States. Corn imports are raised for South Korea and Saudi Arabia, but lowered for Japan and Mexico. Sorghum imports are lowered for China, but partially offset by increases for Mexico and Japan. For 2017/18, corn exports are lowered for Argentina and Brazil. Foreign corn ending stocks are lowered from last month, with the largest declines for China, the EU, and Mexico. RICE: U.S. 2018/19 all rice supplies are increased this month by 4.8 million cwt to 272.3 million as higher production more than offsets reduced beginning stocks. Rice production increased by 9.8 million cwt to 213.0 million as the NASS Acreage report indicated greater rice area for both long-grain and medium- and short-grain than previously forecast. The NASS Rice Stocks report implied significantly higher than previously estimated domestic use and residual for the 2017/18 marketing year, which resulted in lower 2018/19 beginning stocks. Total rice use for 2018/19 is increased 4.0 million cwt to 230.0 million, all on higher projected domestic and residual use. All rice exports are reduced 1.0 million cwt to 102.0 million with medium- and short-grain accounting for the reduction. Projected 2018/19 all rice ending stocks are raised to 42.3 million cwt, up 31 percent from last year with long-grain comprising most of the increase. The 2018/19 all rice season-average farm price is reduced $0.30 per cwt at the midpoint to a range of $11.60 to $12.60. Global 2018/19 rice supplies are raised fractionally on increased production for the United States and Vietnam more than offsetting reductions in Australia, South Korea, and Russia. World exports, while still a record, are modestly lower this month as reductions for India and Australia are not completely offset by higher exports for Vietnam and Pakistan. Global ending stocks are raised by 0.6 million tons to 143.8 million, almost entirely due to a nearly 1.0 million increase for India. OILSEEDS: This month’s U.S. soybean supply and use projections for 2018/19 include lower supplies, lower exports, higher crush, and higher ending stocks. Beginning stocks are reduced on increased exports and crush for 2017/18. Soybean production for 2018/19 is projected at 4.310 billion bushels, up 30 million on increased harvested area. Harvested area, forecast at 88.9 million acres in the Acreage report, is up 0.7 million from last month. The soybean yield forecast is unchanged at 48.5 bushels per acre. Soybean crush for 2018/19 is raised 45 million bushels to 2.045 billion reflecting an increase in projected soybean meal domestic disappearance and exports. Domestic soybean meal disappearance is raised on lower soybean meal prices and increased livestock production. Soybean and product trade changes reflect the impact of China’s recently imposed soybean import duties in addition to other global oilseed supply and demand changes this month. U.S. soybean meal exports are raised to offset reduced meal exports from South America where higher soybean exports displace crush. Soybean exports are reduced 250 million bushels to 2.040 billion reflecting the impact of China’s import duties. Despite losing market share in China, soybean exports are supported in other markets as lower U.S. prices increase demand and market share. Soybean ending stocks for 2018/19 are projected at 580 million bushels, up 195 million from last month. The U.S. season-average soybean price is forecast at $8.00 to $10.50 per bushel, down $0.75 at the midpoint. Soybean meal prices are forecast at $315 to $355 per short ton, down $15.00 at the midpoint. The soybean oil price forecast at 28 to 32 cents per pound, down 1.5 cents at the midpoint. The 2018/19 global soybean supply and demand forecasts include higher production and lower trade and crush compared to last month. The tariff that China recently imposed on U.S. soybeans is expected to cause higher prices for soybeans in China and slower protein meal consumption growth. Lower demand and a year-over-year drawdown in stocks for China are forecast to result in reduced crush and an 8-million-ton decline for imports to 95 million. Parallel to this change is a 6.8-million-ton decline for U.S. exports that is partly offset by a 2.1-million-ton increase for Brazil. Planted area for Brazil for 2018/19 is expected to expand with higher prices resulting from increased trade with China, leading to a 2.5-million-ton increase in production to 120.5 million. With lower soybean crush and reduced soybean oil production, China is expected to increase imports of other vegetable oils, including soybean, palm, and rapeseed. Total global 2018/19 oilseed production is down 1.4 million tons to 592.6 million with a 4.3-million-ton increase for soybean production offset by lower rapeseed and sunflower. Rapeseed production is reduced 2.6 million tons with lower production for the EU, Australia, Ukraine, and Russia. In the EU, rapeseed production is lowered for Germany and the UK on persistent dryness while production is lowered for France on pest pressure. Sunflowerseed production is down 2.9 million tons mainly for Russia and Ukraine on lower yields from dry conditions. SUGAR: U.S. sugar supply for 2018/19 is increased 143,867 short tons, raw value (STRV) as increases in beginning stocks and imports more than offset a reduction in cane sugar production. The increase in imports results from the Secretary of Agriculture establishing 2018/19 sugar tariff-rate quotas (TRQs) that include an allocation for specialty sugar beyond the minimum level that the United States is bound under the WTO. In addition there is a small increase in projected imports from Mexico. Cane sugar production is reduced in all producing States. Production changes in Florida and Louisiana result from applying updated yield and recovery projections on NASS 2018/19 area harvested forecasts. Texas production is reduced on processor reporting. U.S. sugar use for 2018/19 is reduced by 100,000 STRV on lower deliveries for human consumption. Ending stocks are residually projected at 1.707 million STRV for an ending stocks-to-use ratio of 13.5 percent. U.S. beet sugar production for 2017/18 is increased 55,000 STRV to 5.276 million based on processor reporting of late season sucrose recovery from sugarbeet slicing to a robust 15.2 percent. High-tier tariff imports are increased 15,000 STRV. Deliveries for human consumption are reduced by 65,000 STRV to 12.235 million on a continuing slow pace as refiners’ inventories of raw stocks remain elevated. Mexico production for 2017/18 is increased to 6.009 million metric tons (MT) on official preliminary reporting of the completed harvest season. Ending stocks for 2017/18 are estimated at 1.246 million MT based on domestic consumption in 2018/19 before the start of the campaign and sugar that can be exported to the United States in 2018/19 at a return that is expected to be higher than can currently be obtained in the world market. Exports for 2017/18 to non-U.S. destinations are residually increased by 36,375 MT. For 2018/19, exports to the United States are increased by a small amount to 1.417 million MT to equal U.S. Needs as defined in the amended Suspension Agreements. LIVESTOCK, POULTRY, AND DAIRY: The forecasts for 2018 red meat and poultry production are raised from last month. The beef production forecast is raised on higher expected cow slaughter in the third quarter. USDA will release the Cattle report on July 20th, providing a mid-year estimate of the U.S. cattle inventory as well as producer intentions regarding retention of heifers for beef cow replacement. Forecast pork production is raised from last month as higher expected second-half hog slaughter more than offsets lower second-quarter slaughter. A more rapid pace of hog slaughter is expected in the third quarter and USDA’s Quarterly Hogs and Pigs report estimated the March-May pig crop was 4 percent above 2017 which will result in higher fourth-quarter hog slaughter. Second and third-quarter broiler production is raised on recent hatchery data and expected heavier bird weights. Turkey production is raised slightly on production data to date. Egg production is raised from the previous month as egg prices are forecast higher and feed costs lower. For 2019, the red meat and poultry production forecast is raised as increases in pork and broiler production more than offsets expected declines in beef production. Forecast beef production is reduced from the previous month on lower expected steer and heifer slaughter the first half of the year. The pork production forecast is raised; the Quarterly Hogs and Pigs report indicated that producers intend to farrow 2 percent more hogs over the next two quarters, which coupled with expected growth in pigs per litter will push first-half hog slaughter higher. Forecast broiler and egg production is also raised from the previous month, as higher prices and lower expected feed prices support continued expansion. Forecast turkey production is unchanged from the previous month. The beef import forecast is unchanged for 2018, but the export forecast is raised from the previous month on recent trade data and continued strong exports to Asia. The 2019 beef export forecast is also raised from last month. Pork trade forecasts for 2018 and 2019 are unchanged from the previous month. Lower pork product prices are expected to help offset increased competition in key markets in 2019. No change is made to 2018 and 2019 broiler and turkey export forecasts. The 2018 egg export forecast is raised on recent trade data, but no change is made to the outlying quarters. Small revisions are made to historical trade estimates. The cattle price forecast for 2018 is lowered slightly from last month, reflecting June price data. Forecast 2019 cattle prices are unchanged from the previous month. The hog price forecast is raised for 2018 as recent price strength and expected higher prices in the third quarter more than offset lower prices in the fourth quarter. The hog price forecast for 2019 is lowered on increased supplies of pork. Broiler prices are raised for 2018 on current price strength while turkey prices are unchanged. No changes are made for 2019 broiler and turkey price forecasts. Egg prices are raised for 2018 on higher-than-expected prices to date. The 2019 egg price is reduced slightly on increased supplies. Milk production forecasts for both 2018 and 2019 are lowered from last month on slower-thananticipated growth in milk per cow and lower cow numbers. Although tempered by lower expected feed costs, lower milk prices will likely weaken producer margins, resulting in lower cow numbers and slower growth in milk per cow. USDA’s Cattle report, to be released on July 20th, will provide a midyear estimate of dairy cow and dairy replacement heifer inventories. For 2018, the fat basis import forecast is raised from the previous month on higher imports of butterfat products. Fat basis imports are unchanged for 2019. The 2018 fat basis export forecast is WASDE-579-5 unchanged from the previous month but is raised for 2019 as the U.S. is expected to be price competitive and higher expected exports of butterfat products will more than offset expected declines in cheese exports. Skim-solids basis import forecasts for 2018 and 2019 are unchanged from the previous month. However, skim-solids basis exports for 2018 and 2019 are reduced from the previous month primarily on lower expected exports of skim milk powder and whey products as China’s tariffs on certain U.S. dairy products hampers exports to some extent. The 2018 butter, cheese, nonfat dry milk (NDM), and whey price forecasts are reduced from the previous month. Forecasts are reduced for cheese, NDM, and whey prices for 2019 as cheese stocks will remain large and prices for NDM and whey will have to remain competitive with competing exporters. However, the 2019 butter price is raised as stocks are worked down. The 2018 and 2019 Class III price and Class IV price forecasts are lowered from last month. The 2018 all milk price is forecast at $15.95 to $16.25 and the price for 2019 is $16.25 to $17.25 per cwt. COTTON: The U.S. 2018/19 cotton projections show lower production, exports, and stocks compared with last month. The 1.0-million-bale decrease in the crop projection is due to higher expected abandonment based on current conditions. Beginning stocks are 200,000 bales lower due to an increase in 2017/18 exports. 2018/19 exports are reduced 500,000 bales based on lower supplies and increased foreign competition. With no change in domestic consumption, 2018/19 ending stocks are projected at 4.0 million bales, down 700,000 bales from the June estimate and unchanged from the revised 2017/18 level. The midpoint of the projected range of the marketingyear-average price is raised 5 cents from last month, to 75 cents per pound. Historical revisions to China’s consumption back to 2014/15 account for most of a 3.3-million-bale decline in 2018/19 world beginning stocks. World 2018/19 consumption is 1.6 million bales higher than in June, as the revisions to China’s consumption estimates carry through into the 2018/19 projection year with a 1.0-million-bale increase. Consumption forecasts are also higher for Bangladesh, Pakistan, Brazil, and Vietnam. World production is projected 290,000 bales lower than in June, as reduced U.S. and Australian production more than offsets increases for Brazil, India, and Mexico. World trade