Farm Income & Weather Outlook - Tuesday, 28 February 2017

The Ag Outlook Forum was held last week in Arlington, VA and produced a lot of important baseline data to be aware of.  Expectations for acres in 2017 were announced and in general met with previous guesstimates.

  • Corn 90 million acres- this is down -4 million acres from last year.
  • Soybeans 88 million acres-this is up over +4.5 million acres from 2016.

I think it is noteworthy to point out that these baseline numbers have been lower than the March intentions report for the past 4 years in a row so don’t carve them in stone.  The forum also forecast a corn yield of 170.7 bushels per acre with a crop size of 14.06 billion bushels and ending stocks of 2.2 billion bushels.  The soybean yield is projected at 48 bushels per acre with a crop size of 4.18 billion bushels and a carryout of 420 million bushels. 

 

Kevin Van Trump of the Van Trump Report shared his thoughts and perspective on the numbers from the meetings this last week.  In response to the expectations for corn he wrote, “. I personally think the number (corn acres) moves itself lower, perhaps closer to 88 million planted. Which if correct probably equates to somewhere between 80 and 82 million harvested acres, obviously depending on weather. Let’s just say for argument sake we harvest 81 million acres with an average yield of 170 bushel per acre. That's a 13.770 billion bushel crop and well below the 15.148 billion we produced this past year. The USDA used 82.4 million harvested acres with an average yield of 170.7 bushels per acre, producing a 14.065 billion bushel crop.”  Van Trump believes that for a true bullish production year we need to see yields fall below 160 bushels per acre on 81 million harvested acres. He also sees the possibility of a weather event that simply causes “talk” of a -10% to -15% reduction from 2016 production levels bringing total U.S. production below -12.5 billion bushels and prices could move, “well north of $4.50 per bushel.”  “If we catch a weather story I believe we have potential to see a slight running of the bulls.”

 

Corn S&D Released By USDA on February 24, 2017

 

The USDA is estimating 88 million acres of soybeans will be planted this year.  There has been a lot of conversations regarding this number and the fact that many think that the soybean acres number is likely to climb higher in the next couple months. Typically soybean planted acres and harvested acres match quite closely for example in 2016 USDA estimated producers planted 83.4 million acres and harvested 82.7 million acres.

 

Soybean S&D Released By USDA on February 24, 2017

 

Now that La Niña has ended and a possible El Niño is developing the question emerges, what will all of this could mean for our upcoming production year?  Now that La Niña has ended the water temps of the equatorial region of the central and eastern Pacific have been steadily warming.  The atmosphere is beginning to show solid signs of El Niño trends and most of the long-term forecasts for Pacific Ocean temperatures are predicting an El Niño pattern to be in effect sometime during this summer.  The forecast also predict that the drought over the southern Plains and Gulf States will continue and that the Corn Belt should expect above normal rainfall. Any forecast models for La Nina or El Niño are difficult to forecast with high certainty this time of year so keep that in mind as we move closer to spring.

NOAA has published their long-lead seasonal outlook for March-April-May and at this time spring weather forecasts are looking non-threatening for planting season.  Maps are shown below.

 

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