Cash Field Crop
In the USDA’s Prospective Plantings Report, corn planted area is estimated at 92.8 million acres, a four percent increase over last year, while soybean planted area is estimated at 84.6 million acres, five percent lower than last year. This is largely a response to poor soybean prices and large ending stocks due to trade disputes with China. The increased corn acreage should limit any price increases for the 19/20 crop marketing season.
- Commodity markets remain focused on the progress of U.S.-China negotiations, the ratification of USMCA and the removal of retaliatory actions stemming from the U.S. steel and aluminum tariffs. Of course weather during the growing season at home and abroad will be a significant factor as well. It is unclear what impact the devastating late winter flooding in Nebraska and nearby states will have on the coming crop year.
- Ethanol producer margins have improved slightly from lows this winter, and export demand has been strong. Year-round sale of E15 gasoline is on track for summer 2019, but the potential demand boost is likely limited. Overall corn use for ethanol is down two percent year-over-year.
- Corn exports are expected to decline as year-to-date export commitments are five percent behind last year.1
- A slowing global economy may reduce growth in animal protein demand (and feed grains) overseas.
- While soybean exports (and prices) continue to lag, domestic demand remains robust. U.S. crush has hit monthly records for 12 consecutive months, helping take the edge off the U.S.-China trade dispute. With two new plants coming online in 2019, strong domestic demand will likely continue.
- USDA forecasts corn prices for the 2018/19 market year, at $3.40-3.70 (2017/18: $3.36), and soybeans at $8.35-8.85 (2017/18: $9.33).
1 Northwest Farm Credit Services
