USDA Crops Outlook
Slightly Lower Production Pegged for Corn and Soybeans, But an Increase in Soy Exports
ARLINGTON, Va. (DTN) -- USDA sees corn production down 1% and soybean production down 2% in the 2018-19 crop year as farmers won't quite match the yields they achieved in 2017-18.
USDA released various commodity outlooks on Friday morning as part of the annual Agricultural Outlook Forum. The forecasts give the first look at USDA's projections for crops and livestock in the 2018-19 marketing year.
USDA's initial forecast for the 2018-19 crop also sees a bump in U.S. soybean exports by 200 million bushels while corn exports will fall 150 million bushels and wheat exports will fall by 25 million bushels.
USDA on Friday projected a 2018-19 corn yield of 174 bushels per acre, down 2.6 bushels from the 2017-18 record yield. With 90 million acres planted, that projects production at 14.39 billion bushels, down 214 million bushels from the 2017-18 crop.
Ethanol use would reach 5.65 billion bushels of corn, up 125 million bushels from the old crop. USDA cited higher fuel use domestically overall, as well as projected growth in U.S. ethanol exports.
Exports are projected to fall 150 million bushels to 1.9 billion bushels. Total corn use would be 14.52 billion bushels, down 75 million bushels overall. Competition from Argentina, Brazil and Ukraine are expected to limit U.S. export prospects.
That would leave corn ending stocks for the 2018-19 crop at 2.27 billion bushels, down 3% from the 2017-18 crop, with the stocks-to-use ratio pegged at 15.6%. The average season farm-gate price is pegged at $3.40 a bushel.
USDA projects soybean yield for 2018-19 at 48.5 bushels an acre, down 0.6 bushel from last year's crop. With 90 million acres planted, production is pegged at 4.32 billion bushels, down 2% from a year ago.
With an old-crop carryover of 530 million bushels projected, USDA stated the combined production and beginning stocks will lead to record supplies of 4.875 billion bushels, 3% higher than 2017-18.
Domestic use is projected up 1% in 2018-19 to 2.115 billion bushels. Domestic crush is projected to increase 30 million bushels to 1.98 billion bushels with an expansion in domestic use and exports of soymeal. Crush margins are expected to grow because of a slight decline in soybean prices while prices for soybean meal and oil remain steady.
Soybean exports are projected at 2.3 billion bushels, up 200 million bushels from the 2017-18 crop. Rising global demand, along with a decline in the South American harvest, is expected to ease some competition pressures for U.S. soybeans. Global trade will continue to be driven by China, which accounts for about two-thirds of the soybean trade.
Total soybean use is projected at 4.415 billion bushels, up 227 million bushels from the 2017-18 crop. That will lower ending stocks to 460 million bushels for 2018-19 with a stocks-to-use ratio of 10.4%.
The average farm-gate price will drop 5 cents to $9.25 a bushel.
Wheat production will increase by 98 million bushels, or 6% higher than 2017-18. USDA sees a 47.4-bushel-per-acre yield to go with 46.5 million acres seeded, up about 500,000 acres from the old crop.
USDA bumped up overall wheat acres even though the 2018 winter wheat crop was 32.6 million acres, the lowest in 109 years.
Overall production is pegged at 1.839 billion bushels, even though USDA cites the potential of increased abandonment in the Southern Plains because of drought conditions hitting the winter wheat crop.
With 1.009 billion bushels of carry-in from the 2017-18 crop, USDA sees 135 million bushels of imports and total supplies at 2.983 billion bushels for 2018-19, down 93 million bushels from the 2017-18 supplies.
Total domestic use is pegged at 1.127 billion bushels while exports for 2018-19 are projected at 925 million bushels, down 25 million bushels from last year. Wheat is expected to face strong international competition for exports, as the European Union will have a larger crop and Argentina will expand wheat acres. Both Australia and Canada also are expected to have larger export supplies as well as they rebound from lower 2017-18 yields.
Ending stocks for 2018-19 are expected to decline roughly 8%, or 78 million bushels to 931 million bushels. The average farm-gate price is projected at $4.70 a bushel.
USDA sees that global cotton consumption will exceed production in 2018-19, bringing global stocks down by 6 million bales, more than offsetting the increased production from 2017-18 of 900,000 bales. World production will decline by 3.6%, USDA forecasts.
U.S. cotton farmers will increase planted area 5.5% to 13.3 million acres, but USDA forecasts harvested acres will decline 0.4% from last year to 11.3 million acres. The average pounds per acre will fall 7.9% to 828 pounds an acre and the abandonment rate will increase. That will lover overall U.S. cotton production to 19.50 million bales, down 8.3$ from the 2017-18 crop.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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