Grains

Trade relations between China and the U.S. are now on rocky waters as the Trump administration has turned up the heat on tariffs. The first came in March when the president announced a 25 percent tariff on steel imports and a 10 percent tariff on aluminum. "Steel and aluminum will see a lot of good things happen," said President Trump. "We're going to have new jobs popping up - we're going to have much more vibrant companies." It's those who want to see domestic steel production grow, like Illinois Congressman Rodney Davis’ who are supporting the president's move. "Something had to be done when it came to steel," said Davis. "We've seen government -supported, cheap steel being dumped into our country." Davis says it's that action that caused a steel plant in Granite City, Illinois to close. Trump's fair trade approach turned even more strenuous, as the president is demanding his top advisers to hit China with steep tariffs in response to allegations of intellectual property theft. Those tariffs could be applied to more than 100 Chinese products ranging from electronics to furniture. Soybean farmers are on edge, fearing retaliation on reliable soybean exports to China could be next. "We've heard the Chinese say directly that they would retaliate against American soybean imports to that country," said Patrick Delaney, communications for American Soybean Association (ASA). "That's a huge deal. They buy more of our beans than the rest of the world combined." "I think some retaliation is inevitable," said Peter Meyer, senior director with S&P Global Platts Agricultural Commodities Analytics. "That's the way the Chinese would send the message. Unfortunately, it always seems that agriculture is the first one to go. We just seem to be the easiest target." It's that trade disruption that could have a ripple effect and become long-lasting. "History tells us that it takes a long period of time to cultivate a client and a very short period of time to lose that client," said Meyer. "That's my biggest fear. While you may think that aluminum and steel have nothing to do with soybeans, they have everything to do with soybeans now." Analysts like Arlan Suderman of INTL FCStone say when it comes to soybean exports, China is in control. "It's a buyers' market from their standpoint," said Suderman. He says the wildcard for China right now is South America, and if the country can source enough grain from countries like Brazil and Argentina. That's as the most recent U.S. Department of Agriculture (USDA) projections slashed Argentina's soybean production estimates over dryness concerns. "I think they are just waiting to see just what is the size of the production there in Argentina," said Suderman. "How much will that draw supplies from Brazil? What will be the available supplies for them because one thing they don't want to do is threaten the availability of protein for supporting their meat industry, because that has a direct impact on food inflation within China." Meyer thinks while South America isn't the main factor in China's decision on whether to retaliate, Brazil is becoming an even larger player. "I can say last week, when we saw the big Chinese buys, I would attribute that to the fact that the Brazilian harvest was behind compared to last year." Now he fears the U.S. soybean crop is a secondary supplier to China, falling behind Brazil. "China is going to import 97 million metric tons, they may get to 100 million metric tons this year," said Meyer. "To see their numbers increase, and our share of that export number decrease, is very concerning." It's Chinese demand that some in agriculture say can't be ignored. "In general, 95 percent of the world's population is living outside the United States, and a big portion of that in China itself," said Kimbrely Atkins, U.S. Grains Council chief operating officer. The ambivalent relationship with China is nothing new. Earlier this year, China launched an anti-dumping and anti-subsidy investigation into U.S. sorghum imports. A case that National Sorghum Producers (NSP) CEO Tim Lust says doesn't stand on solid ground. "We've been very clear that we have a great relationship with our Chinese buyers," said Lust. "This case was not initiated by our customers, and certainly we want to a fair record and a fair case to move forward." The move by China initially proving to be a big blow to U.S. sorghum prices as China is the top buyer of U.S. sorghum. "China's actions on grain sorghum certainly have put a shockwave into the market," said Suderman. He says as shipments to China have remained fairly strong, there's still doubt hanging over the market, including the motive behind China's case. "Everything China does is to protect China, and they have a huge reserve of corn that they're trying to get rid of," said Suderman. "They're not doing that, but not fast enough. That corn is going out of condition from all indication we can find, and with U.S. grain sorghum going into China, that's displacing corn that they'd like to see going into the feed stream, into the ethanol plants." Lust says while it's a battle that's not going away, ultimately costing the association time and money, he encourages producers to focus on the bright side. "I think obviously the fear of the unknown is significant and there is a lot of that going on right now, but I just want to reassure growers there are still a lot of positives happening in this industry," said Lust. While agricultural groups understand the importance of a major buyer like China, the National Association of Wheat Growers (NAWG) are on the other side of the fence, supporting the administration's recent World Trade Organization (WTO) case against China. "They're currently subsidizing their domestic wheat growers at exchange rate would roughly be about $10.40 a bushel," said NAWG CEO Chandler Goule. "So, we will continue to work on that. That's costing the U.S. wheat growers about $640 million in lost revenue a year." Goule is also striving to protect free trade, becoming vocal about the current administration's actions possibly losing ground in the world trade arena. "My biggest concern though is we've lost some of our leverage and ability to negotiate because we left the [TPP] agreement, and now there is uncertainty out there in the international arena of if the U.S. comes back and reengages and doesn't get exactly what they want, are we going to pull back out again?" said Goule. While it's a balancing act, it's adding more uncertainty to a trade battle that seems to be gaining strength.

Secretary of Agriculture Sonny Perdue hasn't been in office one full year yet, and he's traveled to more than half of the U.S. Since he assumed the highest office in agriculture on April 25, 2017, there's been a lot of themes he's heard from producers that are causing worry: overregulation, labor force and economy to name a few. Despite these issues, Perdue says producers have what it takes to weather the storm. "They're strong, they're resilient, they're optimistic, they're faithful," he told AgDay host Clinton Griffiths. "It takes all of that to put that seed in the ground every spring." Perdue believes his job is that of a translator, to translate concerns, desires and wishes of the thousands of producers he represents to President Donald Trump, his policy makers and Congress. "I view myself as a spokesman for many," he said. "We've got a pretty homogenous constituency in the agricultural community, and the White House understands that, so they trust me to tell them what's in the heart of farmers." It appears President Trump has been focusing on the manufacturing side of the North American Free Trade Agreement (NAFTA) an the trade deficit. This has been worrisome to farmers because some feel agriculture is a bargaining chip during the negotiation process. One of the things Perdue has been working on is informing the president of the trade surplus in agriculture. Even though Trump grew up in Queens, New York, Perdue says he understands the importance and resilience of the American farmer. He also is aware of the need for enhanced infrastructure. "He understands logistics play a huge part in America's competitiveness [primarily in waterways]," said Perdue. Aside from physical infrastructure, rural broadband also has the attention of the White House and how to improve it. "Farmers are creative people, they're innovators and they're marketers in a way that if we gave them the connectivity to the world, it's amazing what you could see being created not just in the garages in silicon Valley, but in the farm sheds and barns across America," said Perdue. Typically when an issue comes up, Perdue said the Washingtonian way to handle a situation is to throw money at it. When it comes to bringing broadband to rural America, he says this approach is much different. "What we're trying to do is a very data-driven, facts-based approach to where we are analyzing very accurately where we are, where we need to go," he said.

An agreement to revise Section 199A tax reform language, which currently gives farmers a financial incentive to sell through cooperatives, has been reached by lawmakers. According to Pro Farmer’s Washington policy analyst, Jim Wiesemeyer, the new provision is retroactive to Jan. 1 and would restore the treatment that cooperatives and their members received under the old Section 199 tax deduction that was repealed by the new tax reform measure signed into law on Dec. 22, 2017, by President Trump. “[The revised Section 199A would] restore the competitive landscape of the marketplace as it existed in December 2017 so that the tax code does not provide an incentive for farmers to do business with a company purely because it is organized as a cooperative or private/independent firm," said the National Council of Farmer Cooperatives (NCFC) and the National Grain and Feed Association (NGFA) groups in a joint statement. Under the new agreement, co-op members would no longer be allowed to deduct 20% of their sales. But farmers who sell only to co-ops would likely get a deduction that flows through from the cooperative, Wiesemeyer says. They would also get the 20% deduction from net farm income, minus either 9% of their net farm income, or 50% of the wages they paid, whichever amount is less, according to Paul Neiffer, CPA and principal at accountancy ClintonLarsenAllen. “Farmers who sell to both co-ops and other companies would have to keep the two income streams separate for calculating taxes,” he said. In a joint statement Sen. Chuck Grassley (R-Iowa), a senior member and former chairman of the Senate Finance Committee, Senate Finance Committee Chairman Orrin Hatch (R-Utah) and Sens. Pat Roberts (R-Kan.), John Thune (R-S.D.) and John Hoeven (R-N.D.) said they are committed to getting the change signed into law. “After discovering an unintended consequence that created an inequity within the agricultural business community, we’ve worked extensively with stakeholders, our colleagues and the administration to develop a solution that will level the playing field and ensure the nation’s cooperatives, independent small businesses and publicly traded firms can fairly benefit from pro-growth tax reform,” they said. “The stakeholder-driven agreement announced today achieves this goal and restores balanced competition within the marketplace. We’re committed to working with our colleagues to act swiftly on the measure and get it signed into law as soon as possible.” Senate Minority Leader Charles Schumer (D-N.Y.) is the stumbling block. “Tuesday afternoon [Schumer] objected to including the Section 199A fix in a forthcoming omnibus spending bill unless Republicans opened up other parts of the new tax reform measure,” Wiesemeyer says.

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 September 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. 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.” After claims are submitted, U.S. District Judge John W. Lungstrum in the District of Kansas will decide whether or not to officially approve of the $1.51 billion settlement. Lawyers for the plaintiffs said they expect funds to be distributed as early as the first half of 2019. “This settlement does not constitute and admission by either side concerning the merits of the parties’ allegations and defenses,” said Syngenta in a statement provided to AgWeb. “With this litigation largely resolved, Syngenta will continue its focus on agricultural innovation, and continues to believe that the American farmers should have access to the latest U.S.-approved technologies to help them increase their productivity and crop yield.”

CORN This month’s 2017/18 U.S. corn outlook is for larger exports and increased corn used to produce ethanol. Corn used to produce ethanol is raised 50 million bushels to 5.575 billion based on the most recent data from the Grain Crushings and Co-Products Production report and pace of weekly ethanol production during February, as indicated by Energy Information Administration data. Exports are raised 175 million bushels to 2.225 billion, reflecting U.S. price competitiveness, record-high outstanding sales, and reduced exports for Argentina. With no other use changes, ending stocks are lowered 225 million bushels to 2.127 billion, and if realized would be down from the prior marketing year. The projected range for the season-average corn price received by producers is narrowed 10 cents on the low end to $3.15 to $3.55 per bushel, with the midpoint up 5 cents to $3.35 per bushel. For sorghum, 2017/18 exports are lowered 15 million bushels to 245 million based on expectations of reduced shipments to China. Offsetting is an increase in projected feed and residual use to 80 million bushels. The midpoint price forecast is unchanged at $3.15 per bushel. The global coarse grain production forecast for 2017/18 is virtually unchanged at 1,321.96 million metric tons. This month’s foreign coarse grain outlook is for nearly WASDE-575-2 unchanged production, increased use, lower trade, and greater stocks relative to last month. Brazil corn production is down based on expectations of a more modest increase in second-crop corn area. For Argentina, continued heat and dryness during February and into early March reduces yield prospects for late-planted corn. Yield results for earlyplanted corn have also been lower than expected. South Africa corn production is higher as timely rains during reproduction support an increased yield forecast. Partially offsetting is lower expected area. Corn production is raised for India based on the latest information from the government. EU corn production is higher based on recent data for France and Germany. Sorghum production for Australia is down as a period of heat and dryness during the growing season has reduced yield prospects. Area is also reduced. Major global trade changes for 2017/18 this month include higher projected corn exports for the United States more than offsetting a reduction for Argentina. Sorghum exports are lowered for Australia, reflecting reduced exportable supplies. Corn and barley imports are raised for China, partially offset by lower imports of sorghum. Barley imports are lowered for Saudi Arabia, based on tenders to date and expectations of robust demand from China. Brazil 2016/17 exports for the local marketing year ending February 2018 are lowered based on data to date. Foreign corn ending stocks for 2017/18 are higher from last month, mostly reflecting increases for Brazil, India, and the EU. OILSEEDS U.S. soybean supply and use changes for 2017/18 include higher crush, lower exports, and increased ending stocks compared with last month’s report. Soybean crush is raised 10 million bushels to 1,960 million with increased soybean meal exports. Soybean exports are reduced 35 million bushels to 2,065 million with increased production and exports for Brazil. Soybean stocks are projected at 555 million bushels, up 25 million from last month. With increased crush, soybean oil production is raised. An increase in food use is more than offset by lower biodiesel use, leaving domestic disappearance lower this month. Lower biodiesel use reflects lower-than-expected soyoil-based biodiesel production through the first quarter of the marketing year. With increased production and lower use, soybean oil stocks are forecast higher. The season-average soybean price range forecast of $9.00 to $9.60 per bushel is unchanged at the midpoint. Soybean oil prices are forecast at 30 to 33 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $325 to $355 per short ton, up $20.00 at the midpoint. Higher soybean meal prices reflect the impact of sharply lower soybean production in Argentina. Global oilseed production for 2017/18 is projected at 574.5 million tons, down 4.1 million from last month. Argentina soybean production is forecast at 47.0 million tons, down 7.0 million from last month mainly due to lower projected yields resulting from dry conditions through much of the growing region in January and February. Brazil soybean production is raised 1.0 million tons to 113.0 million, reflecting the most recent report from the Brazilian government. Global rapeseed production is projected at 73.9 million tons, up 0.9 million with larger crops for China and Australia partly offset with a smaller crop projected for India. Other changes include higher sunflowerseed production for China and Kazakhstan, lower sunflowerseed production for Russia, and higher cottonseed production for Sudan. Global oilseed trade for 2017/18 is reduced 1.2 million tons mainly on lower soybean exports. Lower soybean exports forecast for Argentina, the United States, and Uruguay are only partly offset with a higher projection for Brazil. Global soybean crush is raised with higher crush projected for Brazil and the United States partly offset by lower crush in Argentina. Global soybean ending stocks are projected at 94.4 million tons, down 3.7 million from last month. Reduced soybean stocks in Argentina and Brazil are only partly offset by an increase for the United States. WHEAT U.S. wheat exports for 2017/18 are reduced 25 million bushels to 925 million, while ending stocks are raised by the same amount. Exports are lowered on reduced price competitiveness in some international markets. Hard red winter wheat and hard red spring wheat exports are reduced 15 million bushels and 10 million bushels, respectively. The season-average farm price is raised $0.05 per bushel at the midpoint of the range to $4.65 on NASS prices reported to date and expectations of higher cash prices for the remainder of the marketing year, reflecting the ongoing drought in the Southern Plains. Global 2017/18 wheat supplies increased 0.5 million tons, primarily on a higher production forecast for Kazakhstan. World exports are raised fractionally with Russia increased 1.5 million tons, partially offset by a 1.0-million-ton reduction for the EU. Russia exports are now projected at 37.5 million tons, up 35 percent from the previous year’s record and surpassing EU exports by 12.5 million. Global imports are also raised, led by a 1.0-millionton increase for Turkey, which is largely attributed to supplies from Russia. Total world consumption is reduced, primarily on a 2.0-million-ton reduction for India on reports of weakening demand from rising domestic prices. Despite the reduction, total India consumption is still up marginally from the previous year’s record. With global supplies rising and total demand falling, world ending stocks are raised 2.8 million tons to a record 268.9 million. COTTON This month’s 2017/18 U.S. cotton forecasts show lower production, higher exports, and lower ending stocks relative to last month. Production is reduced 233,000 bales to 21.0 million, based on the March 8 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2018 Crop Production report. Domestic mill use is unchanged from last month, but exports are raised 300,000 bales to 14.8 million, based on stronger world demand and expectations of above-average shipments during the second half of the marketing year. Ending stocks are lowered 500,000 bales to 5.5 million. The projected range for the marketing year average price received by producers of 68.0 to 70.0 cents per pound is narrowed by 1 cent at each end from last month. The forecast for 2017/18 global production is raised nearly 600,000 bales this month due to revisions in Sudan’s estimates back to 2013/14 and higher area in Australia, partially offset by smaller crops in the United States and Uzbekistan. Sudan’s 2017/18 forecast is raised 730,000 bales based on reports of new technology and investment, and Australia’s production is raised 300,000 bales following reports area previously forecast for sorghum was planted to cotton. World consumption is raised slightly, while world trade is forecast 600,000 bales higher, as higher expected imports by Turkey, Bangladesh, China, and Vietnam more than offset a decline for Taiwan. World ending stocks are now projected at 88.8 million bales, nearly 300,000 bales above last month. RICE The 2017/18 U.S. rice supply and use estimates are unchanged relative to last month. The projected season-average farm price (SAFP) for all rice classes are unchanged at the midpoint. The SAFP for all rice is $12.50 per cwt at the midpoint of the range of $12.10 to $12.90. Global 2017/18 rice production is raised to a new record of 486.3 million tons, fractionally surpassing last year’s record. Almost all of the production increase is for India, where production is raised to 110.0 million tons, based on the India government updated data for 2017/18. The increase in India’s production more than offsets a reduction in Sri Lanka, where production is now below average for the second consecutive year. Global 2017/18 trade is raised to a record 47.3 million tons, mainly on higher exports expected from India with greater exportable supplies. World ending stocks are projected increasing to 143.1 million tons for 2017/18, which would match the second highest on record. China now holds over 66 percent of total stocks. LIVESTOCK, POULTRY, AND DAIRY The 2018 forecast for total red meat and poultry production is fractionally lower than last month, as lower beef production more than offsets higher pork and turkey production. Broiler production is unchanged. The beef production forecast is reduced from the previous month on lower first-quarter slaughter and lower weights. However, the decline is offset somewhat by higher second-quarter fed beef production and higher non-fed beef production during the first half of the year. Pork production is lowered for the first half of the year on a slower pace of slaughter, but higher carcass weights are expected and second-half production is increased. USDA will release the Quarterly Hogs and Pigs report on March 29th, providing an indication of producer intentions for farrowings in the next two quarters. First-quarter egg production is reduced on recent hatchery data. Estimates of 2017 broiler, turkey meat, and egg supply and utilization are adjusted to reflect revised annual production and storage summary data. For 2018, beef imports are raised as early-year demand remains robust. No change is made to beef exports. The pork import forecast is raised on expected demand strength. Export forecasts are also raised from last month. Broiler exports are unchanged, but turkey exports are reduced slightly on weaker expected demand in key markets. Cattle and hog prices for the first quarter of 2018 are raised from last month on current price movements. The second-quarter broiler price forecast is raised from last month on stronger expected demand. Turkey prices are reduced through the third quarter on the continued slow recovery in demand. Egg price forecasts are raised on robust demand. The milk production forecast for 2018 is raised from last month on more rapid growth in milk per cow in the first half of the year. The 2018 imports on a fat and skim-solids basis are reduced on slower sales of a number of processed dairy products. Exports on fat basis are raised on increased cheese sales and exports on a skim-solids basis are raised on stronger sales of both cheese and whey products. The supply and use estimates are adjusted to reflect revisions to 2016 and 2017 milk production and 2017 storage data. Annual product price forecasts for cheese and butter are raised from the previous month as recent prices have increased. However, continued large supplies of nonfat dry milk (NDM) are expected to pressure NDM prices, and the forecast is reduced. No change is made to the annual whey price forecast. The Class III price is raised on the cheese price projection, while the Class IV price is down, as the lower NDM price more than offsets a higher butter price forecast. The all milk price is forecast at $15.75 to $16.35 per cwt, unchanged at the midpoint.

Cover crops provide a variety of benefits, but if you don’t terminate them well they can limit your cash crop’s success. Because there is more than one way to get the job done, be sure to consider your options. The three methods used for termination are herbicide, tillage or rolling/crimping, according to Iowa State University. Herbicide Selection Before selecting a herbicide, consider your cover crop type and plant growth stage. Both can impact the herbicide’s success, suggests Iowa State University (ISU) research. Some crop species are easier to kill than others. Winter wheat, annual ryegrass and red clover have a dense canopy and mature rapidly—which can cause herbicide failure. Determine whether to use a contact or translocating herbicide. Contact herbicides require thorough coverage to kill plants. Translocating herbicides don’t require as much coverage since they can move and attack the growing point of the plant. In all cases, apply label rates. To Till Or Not Tillage can be a good alternative for farmers who don’t want to use herbicides. It’s also an option for when Mother Nature delivers cool, wet conditions that hamper application or minimize herbicide uptake by plants. Plus, in the process of destroying a cover crop, tillage can integrate the biomass into soils and prepare the seedbed. However, the USDA Natural Resources Conservation Service (NRCS) is asking farmers to rethink using tillage as a termination method, says Barb Stewart, ISU agronomist with NRCS. She says wet conditions often cause compaction and soil structure damage when farmers choose tillage over herbicides. Rolling/Crimping Rolling or crimping cover crops can deliver benefits beyond just termination. For instance, tall cover crops can shade cash crops, so rolling the covers could reduce competition for sunlight. ISU researchers explain your cover crop dictates whether rolling or crimping will work. For instance, cereal rye (after it has shed pollen), hairy vetch (at full bloom), barley and triticale are good candidates for rolling. However, if you have a cover crop mix, consider using a different termination method. The reason is with multiple crop species in the field you are addressing different growth stages at the same time and might secure only partial termination.

CORN This month’s 2017/18 U.S. corn outlook is for larger exports and increased corn used to produce ethanol. Corn used to produce ethanol is raised 50 million bushels to 5.575 billion based on the most recent data from the Grain Crushings and Co-Products Production report and pace of weekly ethanol production during February, as indicated by Energy Information Administration data. Exports are raised 175 million bushels to 2.225 billion, reflecting U.S. price competitiveness, record-high outstanding sales, and reduced exports for Argentina. With no other use changes, ending stocks are lowered 225 million bushels to 2.127 billion, and if realized would be down from the prior marketing year. The projected range for the season-average corn price received by producers is narrowed 10 cents on the low end to $3.15 to $3.55 per bushel, with the midpoint up 5 cents to $3.35 per bushel. For sorghum, 2017/18 exports are lowered 15 million bushels to 245 million based on expectations of reduced shipments to China. Offsetting is an increase in projected feed and residual use to 80 million bushels. The midpoint price forecast is unchanged at $3.15 per bushel. The global coarse grain production forecast for 2017/18 is virtually unchanged at 1,321.96 million metric tons. This month’s foreign coarse grain outlook is for nearly WASDE-575-2 unchanged production, increased use, lower trade, and greater stocks relative to last month. Brazil corn production is down based on expectations of a more modest increase in second-crop corn area. For Argentina, continued heat and dryness during February and into early March reduces yield prospects for late-planted corn. Yield results for earlyplanted corn have also been lower than expected. South Africa corn production is higher as timely rains during reproduction support an increased yield forecast. Partially offsetting is lower expected area. Corn production is raised for India based on the latest information from the government. EU corn production is higher based on recent data for France and Germany. Sorghum production for Australia is down as a period of heat and dryness during the growing season has reduced yield prospects. Area is also reduced. Major global trade changes for 2017/18 this month include higher projected corn exports for the United States more than offsetting a reduction for Argentina. Sorghum exports are lowered for Australia, reflecting reduced exportable supplies. Corn and barley imports are raised for China, partially offset by lower imports of sorghum. Barley imports are lowered for Saudi Arabia, based on tenders to date and expectations of robust demand from China. Brazil 2016/17 exports for the local marketing year ending February 2018 are lowered based on data to date. Foreign corn ending stocks for 2017/18 are higher from last month, mostly reflecting increases for Brazil, India, and the EU. OILSEEDS U.S. soybean supply and use changes for 2017/18 include higher crush, lower exports, and increased ending stocks compared with last month’s report. Soybean crush is raised 10 million bushels to 1,960 million with increased soybean meal exports. Soybean exports are reduced 35 million bushels to 2,065 million with increased production and exports for Brazil. Soybean stocks are projected at 555 million bushels, up 25 million from last month. With increased crush, soybean oil production is raised. An increase in food use is more than offset by lower biodiesel use, leaving domestic disappearance lower this month. Lower biodiesel use reflects lower-than-expected soyoil-based biodiesel production through the first quarter of the marketing year. With increased production and lower use, soybean oil stocks are forecast higher. The season-average soybean price range forecast of $9.00 to $9.60 per bushel is unchanged at the midpoint. Soybean oil prices are forecast at 30 to 33 cents per pound, down 1 cent at the midpoint. Soybean meal prices are projected at $325 to $355 per short ton, up $20.00 at the midpoint. Higher soybean meal prices reflect the impact of sharply lower soybean production in Argentina. Global oilseed production for 2017/18 is projected at 574.5 million tons, down 4.1 million from last month. Argentina soybean production is forecast at 47.0 million tons, down 7.0 million from last month mainly due to lower projected yields resulting from dry conditions through much of the growing region in January and February. Brazil soybean production is raised 1.0 million tons to 113.0 million, reflecting the most recent report from the Brazilian government. Global rapeseed production is projected at 73.9 million tons, up 0.9 million with larger crops for China and Australia partly offset with a smaller crop projected for India. Other changes include higher sunflowerseed production for China and Kazakhstan, lower sunflowerseed production for Russia, and higher cottonseed production for Sudan. Global oilseed trade for 2017/18 is reduced 1.2 million tons mainly on lower soybean exports. Lower soybean exports forecast for Argentina, the United States, and Uruguay are only partly offset with a higher projection for Brazil. Global soybean crush is raised with higher crush projected for Brazil and the United States partly offset by lower crush in Argentina. Global soybean ending stocks are projected at 94.4 million tons, down 3.7 million from last month. Reduced soybean stocks in Argentina and Brazil are only partly offset by an increase for the United States. WHEAT U.S. wheat exports for 2017/18 are reduced 25 million bushels to 925 million, while ending stocks are raised by the same amount. Exports are lowered on reduced price competitiveness in some international markets. Hard red winter wheat and hard red spring wheat exports are reduced 15 million bushels and 10 million bushels, respectively. The season-average farm price is raised $0.05 per bushel at the midpoint of the range to $4.65 on NASS prices reported to date and expectations of higher cash prices for the remainder of the marketing year, reflecting the ongoing drought in the Southern Plains. Global 2017/18 wheat supplies increased 0.5 million tons, primarily on a higher production forecast for Kazakhstan. World exports are raised fractionally with Russia increased 1.5 million tons, partially offset by a 1.0-million-ton reduction for the EU. Russia exports are now projected at 37.5 million tons, up 35 percent from the previous year’s record and surpassing EU exports by 12.5 million. Global imports are also raised, led by a 1.0-millionton increase for Turkey, which is largely attributed to supplies from Russia. Total world consumption is reduced, primarily on a 2.0-million-ton reduction for India on reports of weakening demand from rising domestic prices. Despite the reduction, total India consumption is still up marginally from the previous year’s record. With global supplies rising and total demand falling, world ending stocks are raised 2.8 million tons to a record 268.9 million. COTTON This month’s 2017/18 U.S. cotton forecasts show lower production, higher exports, and lower ending stocks relative to last month. Production is reduced 233,000 bales to 21.0 million, based on the March 8 Cotton Ginnings report. The final estimates for this season’s U.S. area, yield, and production will be published in the May 2018 Crop Production report. Domestic mill use is unchanged from last month, but exports are raised 300,000 bales to 14.8 million, based on stronger world demand and expectations of above-average shipments during the second half of the marketing year. Ending stocks are lowered 500,000 bales to 5.5 million. The projected range for the marketing year average price received by producers of 68.0 to 70.0 cents per pound is narrowed by 1 cent at each end from last month. The forecast for 2017/18 global production is raised nearly 600,000 bales this month due to revisions in Sudan’s estimates back to 2013/14 and higher area in Australia, partially offset by smaller crops in the United States and Uzbekistan. Sudan’s 2017/18 forecast is raised 730,000 bales based on reports of new technology and investment, and Australia’s production is raised 300,000 bales following reports area previously forecast for sorghum was planted to cotton. World consumption is raised slightly, while world trade is forecast 600,000 bales higher, as higher expected imports by Turkey, Bangladesh, China, and Vietnam more than offset a decline for Taiwan. World ending stocks are now projected at 88.8 million bales, nearly 300,000 bales above last month. RICE The 2017/18 U.S. rice supply and use estimates are unchanged relative to last month. The projected season-average farm price (SAFP) for all rice classes are unchanged at the midpoint. The SAFP for all rice is $12.50 per cwt at the midpoint of the range of $12.10 to $12.90. Global 2017/18 rice production is raised to a new record of 486.3 million tons, fractionally surpassing last year’s record. Almost all of the production increase is for India, where production is raised to 110.0 million tons, based on the India government updated data for 2017/18. The increase in India’s production more than offsets a reduction in Sri Lanka, where production is now below average for the second consecutive year. Global 2017/18 trade is raised to a record 47.3 million tons, mainly on higher exports expected from India with greater exportable supplies. World ending stocks are projected increasing to 143.1 million tons for 2017/18, which would match the second highest on record. China now holds over 66 percent of total stocks. LIVESTOCK, POULTRY, AND DAIRY The 2018 forecast for total red meat and poultry production is fractionally lower than last month, as lower beef production more than offsets higher pork and turkey production. Broiler production is unchanged. The beef production forecast is reduced from the previous month on lower first-quarter slaughter and lower weights. However, the decline is offset somewhat by higher second-quarter fed beef production and higher non-fed beef production during the first half of the year. Pork production is lowered for the first half of the year on a slower pace of slaughter, but higher carcass weights are expected and second-half production is increased. USDA will release the Quarterly Hogs and Pigs report on March 29th, providing an indication of producer intentions for farrowings in the next two quarters. First-quarter egg production is reduced on recent hatchery data. Estimates of 2017 broiler, turkey meat, and egg supply and utilization are adjusted to reflect revised annual production and storage summary data. For 2018, beef imports are raised as early-year demand remains robust. No change is made to beef exports. The pork import forecast is raised on expected demand strength. Export forecasts are also raised from last month. Broiler exports are unchanged, but turkey exports are reduced slightly on weaker expected demand in key markets. Cattle and hog prices for the first quarter of 2018 are raised from last month on current price movements. The second-quarter broiler price forecast is raised from last month on stronger expected demand. Turkey prices are reduced through the third quarter on the continued slow recovery in demand. Egg price forecasts are raised on robust demand. The milk production forecast for 2018 is raised from last month on more rapid growth in milk per cow in the first half of the year. The 2018 imports on a fat and skim-solids basis are reduced on slower sales of a number of processed dairy products. Exports on fat basis are raised on increased cheese sales and exports on a skim-solids basis are raised on stronger sales of both cheese and whey products. The supply and use estimates are adjusted to reflect revisions to 2016 and 2017 milk production and 2017 storage data. Annual product price forecasts for cheese and butter are raised from the previous month as recent prices have increased. However, continued large supplies of nonfat dry milk (NDM) are expected to pressure NDM prices, and the forecast is reduced. No change is made to the annual whey price forecast. The Class III price is raised on the cheese price projection, while the Class IV price is down, as the lower NDM price more than offsets a higher butter price forecast. The all milk price is forecast at $15.75 to $16.35 per cwt, unchanged at the midpoint.

The USDA held its annual Agricultural Outlook Forum this week in Arlington, Va. As many as 2,000 attendees attended the USDA's largest meeting of the year, and many ag-related topics were discussed. One of the issues discussed was China and its demand for U.S. soybeans. In the February World Agricultural Supply and Demand (WASDE) report from the USDA showed soybean exports in general have slowed. However, during the forum, USDA economists think China’s livestock sector’s appetite for soybeans will continue to grow. Within the next decade, the USDA thinks China will account for 70 percent of all U.S. soybean exports. This comes on the heels as the U.S. is proposing tariffs on steel and aluminum imports, mostly impacting China. At the forum, Agriculture Secretary Sonny Perdue says they haven't heard of any retaliatory measures yet, but they are planning for what China may do next. "We hope that they will view these issues in a way that it’s not retaliatory, particularly agricultural sense, although we do know realistically that agriculture is always the easiest to retaliate on,” he said. This is the 94th year of the forum.