Each year, the USDA calculates supply-demand forecasts for the major U.S. crops at its annual Agricultural Outlook Forum being held on Feb. 22 & 23 in Washington, DC. The USDA’s Chief Economist Johansson will provide basic details during his remarks on Feb. 22, while the complete S&D sheets will be out on Friday.
Given 2017’s hefty soybean plantings, many were expecting a big swing back in US corn. However, corn acres could still suffer from: (1) firm soybean prices on Argentine dry weather concerns; (2) strong cotton and rice prices drawing area outside the Corn Belt; and (3) higher sorghum, oats, and barley substituting for higher cost corn seedings across the US Plains.
Each fall, the USDA works up 10-year crop balance sheets called Baseline Projections as part of its annual Farm Bill update for Congress. With limited price competition in crops outside of the Midwest, the USDA projected a rise in corn to 91 million acres. However, higher competitor prices could slip seedings 1.4 million lower to 88.77 million acres. Utilizing this area and USDA’s 173.5 yield trend from the baselines, a 14.2 billion crop could be projected. With limited demand changes, except for a 100 million bu. jump in exports after last month’s old crop increase, corn’s stocks could slip towards 2.0 billion bu.
Ongoing strong protein prices and a 6% rise in soft red wheat area suggests US bean area stays higher. However, 2018’s rise maybe only 488,000 acres vs. DC’s previous 860,000 rise. This smaller area & USDA’s 48.4 bu. baseline yield produces a 25 million lower crop. However, larger initial stocks and reduced exports after this year’s cuts suggests 2018/19 soy stocks could jump to 600 million without any further S. American problems.
N. Plains dryness likely adds more spring wheat acres for 46.1 million. But, 47.4 DC yield keeps crop at 1.8 billion bu. & stocks at 877 million without demand changes.