USDA Long-Term Ag Projections and La NiƱa Update - Feb, 20 February 2018
The USDA has published their long term agricultural projections for 2018 to 2027 for U.S. crops, I have included the highlights for corn and soybeans. CORN Total corn acres are expected to continue to decline.  During the period from 2012-2014 the U.S. planted an average of 257 million acres of the 8 major crops. Since then the average acres planted to corn, soybeans, wheat, upland cotton, sorghum, rice, barley, and oats has dropped off to an average of 253 million acres.  It is expected that that the average acres planted to these crops will remain somewhere between 252 and 255 million acres for the next decade.  Corn acres are predicted to lose the most acres between now and 2027 to an average of 87.5 million acres but improved hybrids and increasing yields the total amount of production is still expected to increase.  The USDA has estimated the average yield in 2018/19 at 173.5 bushels per acre which is well behind this last season’s average of 175.4 bushels per acre.  The agency has also forecast their expected average yield for coming years and as we look 10 years out the predicted average yield increases to an average of 191.5 bushels per acre. Ethanol production is expected to increase slowly for the next couple of years and then begin to gradually fall off to levels near those of 2016 within the next 10 years.  Reductions in fuel consumption due to more fuel efficient vehicles and better modes of urban mass transportation are expected to reduce overall usage.  It’s predicted that falling demand for ethanol and an increase in demand for corn for other sources will drop ethanol production from the high of 38% of total use to below 35%. The U.S. is anticipated to remain the world’s largest exporter of corn for the duration of the outlook.  An increase in income especially in developing countries will increase the demand for quality meat which will raise the demand of corn for feed.  A slowly weakening U.S. Dollar is also expected to raise export potential.  In contrast though increasing competition from Brazil, Argentina and Ukraine along with our own growth of corn used for domestic feed is forecast to slowly reduce the U.S. market share of global corn trade to below 30% during the outlook period. The USDA also projects that the average price for corn will range from $3.20 to $3.60 per bushel during the next 10 years. ... view details

USDA WASDE Worksheet and South America Update - Feb, 13 February 2018
As we inch closer to planting season in the U.S. new crop corn and soybean price ratios are beginning to gain more attention.   The ratio for corn to soybeans typically runs around 2.5:1, meaning it takes 2.5 bushels of corn to equal the value found in 1 bushel of soybeans and any divergence from this has shown to persuade acres to move in one direction or the other. Currently this ratio sits at 2.6:1 which gives soybeans a slight advantage over corn. If this price advantage continues it’s possible that we will see more double-cropping especially in southern states this season. As always though the weather tends to dictate some planting decisions for producers.  Over the past few weeks there has been a slight increase in La Niña readings which makes it more likely the U.S. will be impacted to some extent this growing season by the weather pattern.  In most La Niña years the southern U.S. tends to experience drought conditions while the northern states tend to see wetter weather. If this indeed occurs it is likely southern states will plant more corn acres due to the early planting opportunities. ... view details

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