The 3 Major Crops Had Minor Area Changes, But Their Stocks Were Smaller

Market Analysis

The USDA released their economic derived initial supply-demand forecasts for the major U.S. crops at its annual Agricultural Outlook Forum Friday. As has been the case recently, the DC analysts didn’t change their basic approach from their baselines supply/demand tables, but their 2018/19 major crops ending stock forecasts were smaller than the current level.

Chief Economist Johansson provided a mild surprise on Thursday when the USDA sliced 1 million acre each from both corn and soybeans 91 million baseline plant-ings leaving them slightly lower than last year. However, the USDA is projecting its 8 major crop seedings will be up 3.2 million acres to 255.3 million. This is led by higher other feed grains (oats, barley and sorghum), cotton, rice and spring wheat. The higher cost of corn raising and stronger minor crop prices outside of the Corn Belt were likely behind the USDA’s acre changes..

In corn, the USDA’s 90 million plantings were 170,000 less than 2017 and similar to the trade’s 89.9 million average. The USDA did up corn’s yield by 0.5 bu., but they also upped corn’s demand outlook by 70 million. This left their stock estimate lower than the current level at 2.272 billion bu. Corn seedings remain vulnerable because of higher crop prices outside of the Midwest.

Despite trade whispers of 1.5-2.0 million larger US bean plantings because of US prices and rotation needs, the DC Forum dropped its seeding to 90 million acres vs. the trade’s 90.6 million average. The USDA did up beans yield to 48.5 bu. (+0.1) from the baseline, but they kept their 2018/19 total demand only 20-25 million lower then the baseline which was a head turner.

USDA reverse course and upped spring/durum seed-ings by 580,000 acres. However, their 2018 stocks were lower at 931 million vs. the trade’s 937 estimate. Russia’s cold weather and Plains dryness are wheat’s focus now.