USDA released the Monthly World Agriculture Supply and Demand Estimates Summary on Wednesday.WHEAT:  

U.S. wheat ending stocks for 2009/10 are projected 20 million bushels higher as a reduction in expected food use pushes ending stocks to 1 billion bushels.  Projected food use is lowered 20 million bushels. High flour extraction rates for a second straight year are reducing the amount of grain needed to produce flour.  At the same time, declining per capita consumption is reducing demand for flour and wheat.

Exports of all wheat are unchanged, but hard red winter wheat exports are raised 10 million bushels. The projected marketing-year average farm price is raised 5 cents on both ends of the range to $4.80 to $5.00 per bushel as prices received by producers remain stronger than expected.

Global wheat supplies for 2009/10 are projected 2.1 million tons higher mostly reflecting higher beginning stocks in Russia and higher production in Argentina. Global wheat imports and exports for 2009/10 are both raised this month. Global wheat consumption is raised 1.2 million tons. Global ending stocks are projected 0.9 million tons higher.  At 196.8 million tons, world stocks are up 60 percent from the recent low in 2007/08.

COARSE GRAINS: 

U.S. feed grain supplies for 2009/10 are projected slightly lower with a downward revision in estimated corn production and a reduction in projected barley imports. U.S. corn exports are lowered 100 million bushels as larger foreign supplies increase competition.  U.S. corn ending stocks are projected 80 million bushels higher.

The projected 2009/10 marketing-year average farm price for corn is lowered 20 cents on the top end of the range to $3.45 to $3.75 per bushel.  Projected farm prices are also lowered for sorghum and oats.  The all barley farm price is projected higher at $4.40 to $4.60 per bushel compared with $4.25 to $4.55 per bushel last month.

Global coarse grain supplies for 2009/10 are projected 5.7 million tons higher this month mostly reflecting larger global corn supplies.  Coarse grain beginning stocks are raised 1.0 million tons. World coarse grain production for 2009/10 is raised 4.7 million tons.

World corn production for 2009/10 is raised 5.9 million tons with Argentina production increased 3.8 million and South Africa production increased 2.0 million. Global sorghum production is raised 0.6 million tons.  Global barley production is lowered 1.2 million tons.

Global coarse grain imports and exports for 2009/10 are largely unchanged, but major shifts among exporters mostly reflect larger corn supplies in Argentina and South Africa. Global consumption of coarse grains and corn, in particular, are little changed,

raising ending stocks with the increase in production.  Global corn ending stocks for 2009/10 are projected 6.1 million tons.

OILSEEDS: 
U.S. soybean ending stocks for 2009/10 are projected at 190 million bushels, down 20 million from last month.  Soybean exports
are raised 20 million bushels to a record 1.420 billion reflecting the strong export pace to date.  Soybean crush is raised 10 million bushels to 1.730 billion based on a lower projected soybean meal extraction rate.  Total soybean meal use remains unchanged. Soybean oil stocks are projected higher due to increased production and lower domestic food use.

Soybean oil used for biodiesel is unchanged at 2.2 billion pounds despite a drop in production in January.  Offsetting production gains are expected later in the year as diesel suppliers increase blending to meet biodiesel mandates.

The U.S. season-average soybean price range for 2009/10 is narrowed to $8.95 to $9.95 per bushel.  The soybean meal price is projected at $280 to $310 per short ton compared with $270 to $320 previously.  The soybean oil price is projected at 33.5 to 36.5 cents per pound, unchanged from last month.

Global oilseed production for 2009/10 is projected at 435.3 million tons, up 1.6 million tons from last month.  Higher projections for soybeans, peanuts, rapeseed, and palm kernel are only partly offset by lower cottonseed and sunflower seed production.  Global soybean production is raised 0.9 million tons to 255.9 million. Global cottonseed production is reduced mostly due to reductions for China and Uzbekistan. Other changes include increased rapeseed production for Australia, increased peanut and sunflower seed production for China, increased palm kernel production for Indonesia, and reduced sunflower seed production for South Africa.  Palm oil production was increased for Indonesia for both 2008/09 and 2009/10.

Global oilseed ending stocks for 2009/10 are projected at 71.8 million tons, up 0.9 million from last month.  Soybeans account for most of the change.

LIVESTOCK, POULTRY, AND DAIRY: 

Total U.S. meat production for 2010 is reduced as lower pork and turkey production more than offset higher broiler production.  Beef production is little changed as higher first-quarter steer and heifer slaughter is offset by lower carcass weights. Pork production is lowered as slaughter in the first and second quarters are reduced and weights during the first quarter have been lighter than expected.

Relatively weak turkey prices in 2009 reduced incentives to expand production and hatchery data continues to point to lower production in 2010.  Broiler production is forecast higher as hatchery and slaughter data point to larger production in the first quarter.

Export forecasts are unchanged from last month for the major meats. Although the recent resolution of pork sanitary issues will permit exports to Russia, exports to that market will be limited by import quotas.

Cattle, hog, and poultry price forecasts are raised for 2010 as tighter meat supplies are forecast this month.

The milk production forecast is raised for 2010 with milk production expected to be fractionally above 2009.  Cow slaughter is relatively low and January milk cow numbers were higher than expected.  The pace of herd reduction is slowed from last month.  Dairy exports on both a fat and skim-solids basis for 2010 are lowered. Imports for 2009 are adjusted to reflect December trade. Fat and skim-solids ending stocks are forecast higher for 2010 as production is increased and exports are reduced. Cheese prices are reduced as higher stocks are expected to pressure prices. Butter price forecasts are raised slightly on the strength of current demand.  Nonfat dry milk prices are forecast lower as export demand lags.  Whey prices are raised slightly.  The Class III price is reduced as weaker cheese prices more than outweigh gains in whey prices.  The Class IV price forecast is lowered reflecting weaker NDM prices which more than offset higher butter prices.  The all milk price for 2010 is forecast at $15.55 to $16.15 per cwt.