Shutdown Leaves Markets Without Key S&D Data

Posted on 01/11/2019 1:21 PM

USDA was scheduled to update its 2018-19 Supply & Demand tables on Jan. 11, but that report has been temporarily delayed until after the partial government shutdown ends. In the absence of USDA’s monthly update, we want to provide you with our old-crop balance sheets, along with an early look at the 2019-20 marketing year. Note: USDA’s 2018-19 forecasts in the tables are from December.



Our outlooks for 2018-19 corn ending stocks and stocks-to-use are slightly more friendly than USDA’s December forecast. While we project total use to be 25 million bu. less than USDA, our supply outlook is 81 million bu. smaller, as we expect the national average yield will decline 1 bu. per acre from the November forecast. Our price forecast is a nickel above the midpoint of USDA’s December range.

For the 2019 crop year, we expect corn plantings to rise nearly 4 million acres from last year, though there are more “uncommitted” acres than normal due to fall field work delays. With a smaller beginning stocks figure and trendline yield of 177 bu. per acre, that would increase total supplies by 170 million bu. from the current marketing year. But we project total use to rise a similar amount and keep ending stocks unchanged. Bottom line: The corn market could easily absorb a nearly 4-million-acre increase in corn plantings.




We believe USDA has a worst-case scenario built in for the 2018-19 marketing year. After a decline in USDA’s yield forecast in November, we anticipate another downward adjustment to the “final” estimate. We also expect total use to be slightly stronger than USDA, whether the increase in use comes from crush, as we currently have projected, or slightly higher exports. Still, old-crop soybean ending stocks would be record-large and our average price is a dime under the midpoint of USDA’s December forecast.

We project soybean plantings to drop sharply from last year. But as discussed above, the acreage situation will be fluid into spring based on weather, input prices and the new-crop soybean/corn price ratio. Assuming a 4.1-million-acre reduction in soybean plantings and a trendline yield of 50 bu. per acre, total supplies would still swell due to hefty beginning stocks. Even with our projected strong recovery in use, ending stocks would still be restrictive for price rallies.




Our outlook for 2018-19 ending stocks is less optimistic than USDA’s, as we project 21 million bu. less use, primarily due to lower feed and residual usage. Our average cash price is 25¢ lower than the midpoint of USDA’s December forecast. 

Our survey signaled winter wheat seedings would decline by 435,000 acres from last year, but we expect a similar increase in spring wheat plantings to hold total U.S. acreage unchanged. With a trendline yield of 47.8 bu. per acre and about 100 million bu. less beginning stocks, that would cut total supplies. We currently project use to hold about steady in the new-crop marketing year. That would tighten carryover by 110 million bu. and increase average cash prices.


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