OILSEEDS: U.S. oilseed production for 2008/09 is projected at 93.0 million tons, up 16 percent from 2007/08. Higher soybean production accounts for most of the increase. Peanut production is also projected higher, while production of sunflower seed, canola, and cottonseed are each projected to decline from 2007/08 levels. Soybean production is projected at 3.1 billion bushels, up 520 million bushels from 2007/08. Soybean supplies are projected at 3.3 billion bushels, up just 3 percent from 2007/08 despite higher planted area. Most of the production gains are offset by sharply lower beginning stocks. Soybean crush is projected to increase less than 1 percent to 1.85 billion bushels, reflecting a small increase in domestic soybean meal use and a projected decline in soybean meal exports. Domestic consumption of soybean oil is projected to increase only slightly as higher biodiesel use of soybean oil is mostly offset by a continued decline in food use. Biodiesel production is projected to use 15 percent of total soybean oil production for 2008/09 compared with 14 percent in 2007/08. Soybean exports are projected at 1.05 billion bushels, down 40 million from 2007/08. Ending stocks for 2008/09 are projected at 185 million bushels, up 40 million from 2007/08, leaving the stocks-to-use ratio at a relatively low 6 percent. The U.S. season-average soybean price for 2008/09 is projected at $10.50 to $12.00 per bushel, compared with $10.00 per bushel in 2007/08. Prices are expected to remain firm due to relatively strong corn and soybean oil prices. Soybean meal prices are forecast at $280 to $340 per short ton, compared with $315 per ton for 2007/08. Soybean oil prices are projected at 50 to 54 cents per pound compared with 52 cents per pound for 2007/08.

Global oilseed production for 2008/09 is projected at 423 million tons, up 32.2 million tons from

2007/08. Oilseed production is projected to recover from the first year-to-year decline in global oilseed production since 1995/96. U.S. oilseed production gains account for 40 percent of the global increase.Total foreign supplies are projected to increase by 4 percent from 2007/08.

Global oilseed ending stocks for 2007/08 are projected at 56.7 million tons, down 0.5 million tons from last month. Most of the decrease is due to lower projected soybean stocks in the United States resulting from a 15-million bushel increase in projected exports. Soybean stocks for Brazil and Argentina are projected at a combined 39.8 million tons, down 1.5 million from 2006/07.

 WHEAT:  The 2008/09 U.S. wheat outlook is for higher production, lower exports, and increased domestic use.  Total production is projected at 2.4 billion bushels, up 16 percent from 2007/08.  The survey-based forecast of winter wheat production is up 17 percent as area and yield are higher than last year.  Spring wheat production is expected higher with seeded area up 10 percent in the March 31Prospective Plantings report.  Durum and other spring wheat production is projected at 614 million bushels, up 12 percent from 2007/08, based on 10-year harvested-to-planted ratios and trend yields. Total wheat supplies are projected up only 4 percent because of historically low carryin. 

Total wheat use is projected down 5 percent for 2008/09 as lower exports more than offset increased domestic use.  Food use is projected at 960 million bushels, up 10 million from the current year reflecting steady growth in domestic demand.  Feed and residual use is projected at 230 million bushels, up sharply from the 60 million projected for 2007/08.  Larger supplies of soft red winter wheat and higher corn prices boost wheat feeding.  Exports are projected at 975 million bushels, down 24 percent from 2007/08.  Ending stocks for 2008/09 are projected at 483 million bushels, more than double the current year's projected 239 million.  The national average farm price for 2008/09 is projected at $6.60 to $8.10 per bushel, compared with the current year forecast of a record $6.55 per bushel.  Wheat prices will be supported by farmer forward sales and early season export demand. 

Global wheat production for 2008/09 is projected at a record 656 million tons, up 8 percent from 2007/08, and up 5 percent from the previous record in 2004/05.  Higher production is projected for most of the world's major exporting countries including Australia, Canada, EU-27, Russia, and Ukraine. Strong world prices and favorable weather in most of EU-27 and FSU-12 raised production for 2008. Production is also projected higher in Brazil, China, and India.  Partly offsetting are reductions for Argentina and Kazahkstan.  The only significant weather problems for winter wheat remain in drought- stricken Middle East and North Africa countries.

World wheat imports, exports, and consumption are projected higher for 2008/09.  Imports are generally projected higher throughout the world with EU-27 the major exception.  Imports are expected to fall sharply for EU-27 as wheat production rebounds from weather-reduced crops in the 2 previous years.  EU-27 exports and wheat feeding are expected to rise sharply.  World wheat ending stocks are projected at 124 million tons, up 13 percent from the current year's projection.

COTTON: The 2008/09 U.S. cotton projections include sharply lower production and ending stock compared with 2007/08. Production is projected at 14.5 million bales, down 25 percent from 2007/08, based on planted area in the Prospective Plantings, combined with historical average abandonment and yields. Domestic mill use also is reduced 300,000 bales from 2007/08 to 4.3 million bales, but exports are raised slightly to 14.5 million. Ending stocks are projected at 5.6 million bales, a 43 percent reduction from the beginning level and 30 percent of total use. A combination of slightly lower production and slightly higher consumption is expected to reduce world stocks in 2008/09. World production is forecast at 118 million bales, 2 percent below the current season, as higher foreign production partially offsets a reduction in the United States. World consumption is projected at 127 million bales, a growth rate of 2 percent, reflecting a slight recovery from 2007/08, but well below the recent 5-year average growth. For China, slightly lower planted area and slightly higher yields result in production of 35.5 million bales, marginally below the revised 2007/08 level. Strong but decelerating growth in China's consumption results in higher imports and lower ending stocks; higher trade by China also supports an increase in world trade. World ending stocks are projected to fall nearly 10 percent to about 55.5 million bales. For 2007/08, a slight decrease in U.S. production relative to last month reflects USDA's final production estimate. Domestic mill use and exports are both reduced based on recent activity, raising ending stocks to 9.9 million bales. The 2007/08 world beginning stocks and production are raised from last month, due mainly to revisions in the China balance sheet beginning in 2000/01. China's production is revised beginning in 2002/03

based on sources in China who have revised estimates for Xinjiang using rail shipment data (see http://www.fas.usda.gov/psdonline/circulars/cotton.pdf for detailed estimates). Production is also raised for India and Brazil, but is lowered for Zimbabwe. World consumption is reduced about 500,000 bales due to decreases for Turkey, Russia, the United States and others. A reduction of nearly 700,000 bales in world imports reflects decreases for China, Turkey, Russia, and others. World 2007/08 ending stocks are raised 1.9 million bales, with the largest increases in China, the United States, and India.

SUGAR: Projected U.S. sugar supply for fiscal year 2008/09 of 12.1 million short tons, raw value, is down 321,000 tons from 2007/08, mainly due to lower production and beginning stocks. Lower beet sugar production, due to reduced area, more than offsets higher cane sugar production from improved yields. Imports under the sugar tariff rate quota (TRQ) are put at 1.27 million short tons to reflect the minimum of U.S. commitments to import raw and refined sugar. The TRQ shortfall is 100,000 tons. The Secretary of Agriculture will establish the actual level of the TRQ at a later date. Projected total use of 10.8 million tons is up 100,000 tons. Year-ending stocks are 1.34 million tons.

 COARSE GRAINS:  The 2008/09 U.S. feed grains outlook is for lower production, strong domestic demand, and lower ending stocks.  The 2008/09 corn crop is projected at 12.1 billion bushels, down 7 percent from the record 2007/08 crop.  Planted area is from producer intentions reported in Prospective Plantings.  Harvested area is based on historical abandonment and derived demand for silage.  The yield is projected at 153.9 bushels per acre, 1 bushel per acre below the 1990-2007 trend based on the slower-than-average pace of planting as reported in Crop Progress. The projected yield assumes a mid-May planting progress near the 10-year average and reflective of last year's May planting pace. Corn supplies fall 870 million bushels from the 2007/08 record with a small increase in

carryin more than offset by the projected 949-million-bushel reduction in output. Higher year-to-year beginning stocks reflect this month's 100-million-bushel reduction in 2007/08 corn use for ethanol.Total U.S. corn use in 2008/09 is projected down 2 percent as reductions in feed and residual use and exports more than offset a continued expansion in ethanol production. Feed and residual use is projected down 14 percent as corn feeding declines with increased production of distillers grains, higher corn prices, and reduced red meat production. Corn exports are projected down 16 percent as U.S. supplies face increased world competition with increased foreign production and a sharp drop in EU-27 imports. Ethanol use is projected at 4 billion bushels, up 33 percent from 2007/08. The slowing pace of plant construction and expansion, and lower capacity utilization are expected to modestly dampen growth in ethanol corn use. With total corn use expected to exceed production by 635 million bushels, ending stocks are projected down 45 percent. At 763 million bushels, ending stocks would be the lowest since 1995/96. The season-average price is projected at $5.00 to $6.00 per bushel, well

above the current year's forecast record of $4.10 to $4.40 per bushel.Global coarse grains production for 2008/09 is projected at 1.1 billion tons, up slightly from the current year record, despite the year-to-year decline in U.S. corn output. Foreign coarse-grain production is

expected to increase 4 percent from 2007/08. World coarse grain output reflects year-to-year

increases in projected corn production in Argentina, Brazil, China, EU-27, and FSU-12. World coarse grain output is also boosted by a recovery in barley production in Australia, EU-27, and FSU-12. Global coarse grain imports and exports are projected to decline in 2008/09 mostly reflecting lower EU-27 corn and sorghum imports and lower U.S. corn exports. Global coarse grain feeding is projected lower with declines in U.S. corn feeding more than offsetting the increase in foreign corn feeding. World coarse grain ending stocks are projected to fall 6 percent as declines in U.S. corn ending stocks more than offset increases elsewhere. At the projected 99.0 million tons, 2008/09 global corn ending stocks are expected to hit a 25-year low.

RICE: U.S. rice production in 2008/09 is projected at 197.0 million cwt, nearly the same as 2007/08. Planted area is estimated at 2.77 million acres as reported in Prospective Plantings, up only 9,000 acres from 2007. Average rice yield is projected at 7,145 pounds per acre, down 40 pounds per acre from 2007, but the second highest on record. Imports for 2008/09 are projected at a record 22.5 million cwt, up nearly 5 percent from revised 2007/08. Beginning stocks in 2008/09 are estimated at 21.6 million cwt, down 45 percent from 2007/08.

U.S. domestic and residual use for 2008/09 is projected at a record 126.0 million cwt, 1 percent above 2007/08. Exports are projected at 98.0 million cwt, 14 percent below 2007/08. Tighter supplies and higher prices will constrain exports in the new marketing year. Ending stocks in 2008/09 are projected at 17.1 million cwt, 45 percent below 2007/08, and the lowest stocks since 1980/81 (16.5 million cwt). The stocks-to-use ratio at 7.6 percent is the lowest since 1974/75 (6.3 percent). The season-average range for 2008/09 is projected at a record $18.50 to $19.50 per cwt, compared to a revised $12.85 to $13.15 per cwt for 2007/08. Tighter domestic supplies  along with expected high global prices will support prices during the year.

Global 2008/09 rice production is projected at a record 432 million tons, up 5 million from 2007/08. World disappearance (consumption and residual) is projected at a record 428 million tons, up 3.6 million tons. Large crops are projected for most of Asia assuming normal weather. Burma's 2008/09 rice crop is projected at 10 million tons, 7 percent below revised 2007/08. Cyclone Nargis made landfall in Burma on May 2 hitting the major Irrawaddy rice growing region, which accounts for an estimated one third of annual rice production. The storm likely damaged recently harvested rice (dry season crop), although much of the crop was probably already harvested. The conditions are delaying WASDE-458-3 planting of the main rainy season crop in this important rice growing region. Burmese farmers were completing the dry season harvest and in the early stages of planting the main season crop (normally harvested in December/January) when the storm hit. Seed availability for planting the rainy season crop may have been affected. Also, salt intrusion into the rice paddies may lower yield potential and

prevent plantings in some areas altogether. Information on the storm's impact is limited, therefore, USDA's supply and use projections for Burma are very tentative. USDA is monitoring the situation and will reassess prior to the June 10 WASDE report. Global exports for 2008/09 are expected to be about the same as 2007/08 at about 27 million tons, but down 3.4 million from 2006/07. India's 2008/09 exports are projected at 2.0 million tons, down 0.5 million from revised 2007/08, and down 4.0 million tons from revised 2006/07. It is assumed that India

will maintain export restrictions on non-basmati rice through most of the 2008/09 marketing year. Global ending stocks are expected to increase 5 percent from 2007/08 to 82 million tons - the largest stocks since 2002/03. The stocks-to-use ratio at 19.3 percent is up from last year's 18.5 percent and is the highest since 2003/04.

 LIVESTOCK, POULTRY, AND DAIRY: Total U.S. meat production in 2009 is projected to decline about 1 percent. Beef production in 2009 declines on tighter supplies of cattle. Cow inventories declined in 2007 and with relatively high cow slaughter expected in 2008, cattle inventories will be smaller and result in fewer cattle marketings during 2009. Marketable supplies of cattle may be further reduced if producers begin retaining calves from this year's calf crop for addition to the breeding herd to rebuild herds. Pork production is expected to decline as producers reduce sows farrowing later this year and into next year in response to poor returns. Additionally, hog imports are expected to be lower as Canadian producers reduce inventories.

Broiler production in 2009 will be slightly higher as production declines in late 2008 and early 2009 due to high feed costs, but then rebounds later in the year. Turkey production is forecast slightly lower, reversing several years of strong expansion. Egg production is forecast about unchanged in 2009, although output is expected to decline during the first half of the year.

The total meat production forecast for 2008 is raised as higher expected beef production more than offsets lower pork and broiler forecasts. Beef production is raised to reflect higher expected cattle slaughter during the second quarter. Pork production is reduced due to lower slaughter in the second half of the year. Expected imports of hogs from Canada are reduced from last month, primarily in response to reduced inventories in Canada. Broiler production forecasts are lowered for the year as hatchery data continue to point toward slower production in the second half of the year. Total meat exports are forecast to increase in 2008 and 2009. The recently announced agreement to re-open South Korea to imports of U.S. beef is expected to support increased exports beginning in mid-2008 and expanding through 2009. Pork exports for 2008 are raised as markets in Asia increase sharply. But pork exports are forecast to decline in 2009, especially if China's domestic pork supply situation improves. Broilers and turkeys continue to increase. The 2008 beef import forecast is lowered as high U.S. cow slaughter reduces demand for imported processing beef, but imports in 2009 are expected to increase as cow slaughter declines and competing exporter supplies are displaced in South Korea. Pork imports are expected to continue to decline gradually. In 2009, livestock and poultry prices are generally forecast higher due to lower meat supplies. Cattle prices are forecast about the same as 2008. Hog prices are forecast higher due to tighter supplies and continued strength in domestic demand and relative strong exports. Broiler prices will increase, reflecting tighter supplies in the first part of 2009.