USDA Ag Outlook Forum - Wednesday, 02 March 2016

The USDA Ag Outlook Forum was held the end of last week, it is the agencies largest annual meeting.  This annual event started in 1923 and brings together 1,600 U.S. and foreign producers, government officials, processors and policy makers and gives the group an opportunity to discuss important issues that impact the agriculture community.  Below are a couple of the many  slides shared by the USDA at the meeting.

  

The USDA announced last week that corn stocks will likely reach 1.977 billion bushels which equals a 12 year high. In addition they also estimate producers in the U.S. will plant 2 million more acres of corn in 2016 than were planted last year with an expected average yield of 168 bushels per acre. The USDA also announced last week that they expect fewer soybean acres will be planted in 2016.  The numbers shared from the Ag Outlook meeting indicate they expect to see 82.5 million acres of soybeans compared to 82.65 million last year. Weather becomes a major point of interest now and anything is possible at this point, the extreme variances in forecasts for the upcoming spring and summer proves just that.  In  next week's newsletter I will cover the weather in more detail.

 Unfortunately, there is not much in the news to move the markets higher at this point in time. 

            *U.S. corn exports are down a whopping -20% from last year.

            * The International Grains Council forecasts global corn production to reach 969 MMT with a 1% increase in total global corn acres this year. 

            *Producers in Brazil are now considering planting more second-crop corn acres than reported earlier.

            *China, is considering auctioning off a vast portion of their domestic corn reserves.

            *Argentina crushed a record number of soybeans in January and continues to be a significant competitor of the U.S. for exports of  bean meal in the global market.

USDA 2016 Ag Outlook, February 26-27

2016 U.S. Acreage and Production (million acres & million bushels)

 

Feb. Outlook
2016 Forecast

Average

Trade Range

2015

2014

Corn
Acres

​90.00

89.689

88.3 - 92.5

88.0

90.6

Corn
Crop

13.825

13.719

13.274 - 14.353

13.601

14.216

Soybean
Acres

​82.5

83.345

82.0 -85.0

82.7

83.3

Soybean
Crop

3.810

3.821

3.636 - 3.957

3.930

3.927

Wheat
Acres

​51.0

52.374

51.0 - 56.0

54.6

56.8

Wheat
Crop

1.991

2.015

1.849 - 2.167

2.052

2.026

Ending Stocks 2016/17 (million bushels)

 

Feb. Outlook
2016 Forecast

Average

Trade Range

2015/16

2014/15

Corn

1.977

1.891

1.382 - 2.725

1.837

1.731

Soybeans

0.440

0.516

0.340 - 0.769

0.450

0.191

Wheat

0.989

1.005

0.800 - 1.308

0.966

0.752

Now that the Midwest is blanketed with snow once again it was pleasing to find that a return to the warmer temps is likely by the end of this week and into next week.  Computer models are forecasting a dip in the jet stream in the west that will bring above average temps across a large portion of the country.  An active weather pattern is also expected for the Western U.S.  This is good news for California where time is running out for substantial drought relief this season from the weakening El Nino system.

 

Crop Insurance season is underway and the deadline for purchasing insurance is Tuesday, March 15th.  Our office is contacting current Crop Insurance customers to go over your insurance coverage needs for 2016.  In order to provide you the most accurate quote we need your production numbers for last year so we can enter them into our system prior to your appointment.  When you are determining what level of Federal Crop Insurance coverage you want, you should first figure what your per acre cost of production is for this year.  The Hail Production plan has several different levels of quoting options this year that you may be interested in.  You may also be interested in APO (Added Price Option), a supplemental insurance available again this year.  This product gives the grower an opportunity to increase his spring price for a small per acre amount in the case of a bushel loss only.

Spring price for 2016 IA, MN, SD:
Corn $3.86
Soybeans $8.85

For comparison these are crop insurances levels from the past five years.  

  • 2011 Corn - Projected price $6.01; Harvest price $6.32
  • 2011 Soybeans - Projected price $13.49; Harvest price $12.14
  • 2012 Corn - Projected price $5.68; Harvest price $7.50
  • 2012 Soybeans - Projected price $12.55; Harvest price $15.39
  • 2013 Corn - Projected price $5.65; Harvest price $4.39 
  • 2013 Soybeans - Projected price $12.87; Harvest price $12.87
  • 2014 Corn - Projected price $4.62; Harvest price $3.49
  • 2014 Soybean - Projected price $11.36; Harvest price $9.65
  • 2015 Corn - Projected price $4.15; Harvest price $3.83
  • 2015 Soybeans - Projected price $9.73; Harvest price $8.91 

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