planting crops in the spring fotokostic/iStock/ThinkStock

USDA Ag outlook provides 2018 estimates

Production is climbing, prices are falling. Keep watch on what actual numbers end up being, and their impact on corn, soybean prices.

Interesting to see both corn and soybean acres estimated at 90 million each. Did you know, since 1960, U.S. soybean production has increased more than 1,000%, while real soybean prices have fallen by 47%? During that same period, corn production has grown by more than 400% and prices have fallen by more than 60%. Once again proof of technology being extremely deflationary, especially in a commoditized sector of the industry. Get more from the USDA Agricultural Outlook Forum.

Corn

  • 18/19 crop projected at 90 million planted acres, down slightly from last year’s 90.2 million.
  • The yield will start at 174 bushels per acre vs. 176.6 last year and 174.6 bushels per acre the year before that.
  • Ending stocks are forecast lower at 2.272 billion bushels on ethanol being bumped from 5.525 billion to 5.650 billion bushels.
  • The crush was also adjusted higher from 1.950 billion to 1.980 billion.

Interestingly exports were reduced from 2.050 down to 1.900. I personally believe U.S. exports could be pushed higher, not lower, which could potentially push ending stocks lower than their current forecast. 

Soybeans

  • 18/19 crop projected at 90 million planted acres, down slightly from last years 90.1 million.
  • The yield will start at 48.5 bushels per acre vs. 49.1 last year and 52 bushels per acre the year before that.
  • Ending stocks are forecast lower at 460 million bushels on exports being bumped from 2.1 to 2.3 billion bushels.
  • The crush was also adjusted higher from 1.950 billion to 1.980 billion.

I personally believe planted soybean acres are estimated too low. I continue to hear more folks talking about more soybeans in the peripheral states. 

The markets didn't really move much yesterday and most of the action continues to hinge on South American weather forecasts, which we all know and understand. I'm sure next week will bring more volatility as the forecasts change. As I sit here today, I remain a longer-term bull of both corn and wheat. I am extremely respectful to the front-end of the soybean market and believe we could see another major leg higher. I am, however, a bit more nervous about longer-term price appreciation, hence taking a more aggressive approach to my late-2018 and 2019 soybean marketing efforts.

Get more market news from The Van Trump Report.

TAGS: Prices
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