implications of usda grain stocks and prospective ......mar 31, 2020 · upcoming webinar. outlook...
TRANSCRIPT
Implications of USDA Grain Stocks and Prospective Plantings Reports for Corn and Soybean Prices
Scott [email protected]
Todd [email protected]
Department of Agricultural and Consumer Economics
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Figure 1: Change in Stock Market and Grain Prices Since the Beginning of 2020 (thru 03/27/2020)
-35
-30
-25
-20
-15
-10
-5
0
5
10
Jan03
Jan10
Jan17
Jan24
Jan31
Feb07
Feb14
Feb21
Feb28
Mar06
Mar13
Mar20
Mar27
% C
hang
e
CornSoybeansWheatS&P 500
Figure 1: Change in Stock Market and Grain Prices Since the Beginning of 2020 (thru 03/27/2020)
-35
-30
-25
-20
-15
-10
-5
0
5
10
Jan03
Jan10
Jan17
Jan24
Jan31
Feb07
Feb14
Feb21
Feb28
Mar06
Mar13
Mar20
Mar27
% C
hang
e
CornSoybeansWheatS&P 500
6,068
6,859 6,954
7,694
6,523
6,023
5,400
7,008
7,750 7,822
8,6228,892
8,613
7,952
5,000
5,500
6,000
6,500
7,000
7,500
8,000
8,500
9,000
9,500
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020-
mil.
bu.
Avg. Guess = 8,125 mbuSource: Reuters Mar 26, 2020
Figure 2: March 1 Corn Stocks
47
-217
-45
185
-178-142
386
-98
136
7
88
186
50
-173
300.00
200.00
100.00
0.00
100.00
200.00
300.00
400.00
500.00
2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020-
mil.
buFigure 3: USDA March 1 Corn Stocks Estimate Minus Average Guess
3,3283,147
3,771 3,673 3,6163,802 3,753
3,4003,689
1,184 1,162 1,233
1,6141,501
1,6681,546
2,030???
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
mil.
bu.
1st half 2nd half
Figure 4: 1st and 2nd Half MY Feed and Residual Use of Corn
Rate of First Half Disappearance
Implied 19/20 MY Feed and Residual Use
70%Observed During 2014/15-2017/18
5,270
63%Observed During 2018/19
5,855
USDA 19/20 Projection 5,525 mbu
Figure 5: Projections for 2019/20 Marketing Year Feed and Residual Use of Corn
Figure 6: Corn Balance2019/20 2019/20
WASDE Mar 10Supply: Planted Acreage (million acres) 89.7 89.7 Harvested Acreage (million acres) 81.5 81.3 Yield (Bushels / Acre) 168.0 167.5Beginning Stocks (million bushels) 2,221 2,221Total Production (million bushels) 13,692 13,618Imports (million bushels) 50 45
Total Supply (million bushels) 15,962 15,884
Consumption: Feed and Residual (million bushels) 5,525 5,600 Food, Seed, and Industrial (million bushels) 6,820 6,520Ethanol (million bushels) 5,425 5,125
Exports (million bushels) 1,725 1,725Total Consumption (million bushels) 14,070 13,845
Ending Stocks (million bushels) 1,892 2,039Ending Stocks/Total Consumption (%) 13.4% 14.7%
Average Price ($/bu.) $3.80 $3.55
1,302 1,270 1,2481,375
998 994
1,327
1,531
1,739
2,109
2,727
2,253
700
1,200
1,700
2,200
2,700
3,200
2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 2019-20
mil.
bu.
Avg. Guess = 2,241 mbuSource: Reuters Mar 26, 2020
Figure 7: March 1 Soybean Stocks
76
-20
63
-46
11
64
4
-12
-25
55
79
50
12
60.00
40.00
20.00
0.00
20.00
40.00
60.00
80.00
100.00
2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 2017- 2018- 2019- 2020-
mil.
buFigure 8: USDA March 1 Soybean Stocks Estimate Minus Average Guess
Figure 9: Soybean Balance 2019/20 2019/20WASDE Mar 10
Supply:Planted Acreage (mil.) 76.1 76.1Harvested Acreage (mil.) 75.0 75.0Yield (bu./ac.) 47.4 47.4
Production (mil. bu.) 3,558 3,558Beginning stocks (mil. bu.) 909 909Imports (mil. bu.) 15 15
Total Supply(mil. bu.) 4,482 4,482
Consumption:Crush (mil. bu.) 2,105 2,105Export (mil. bu.) 1,825 1,775Seed and Residual (mil. bu.) 128 128
Total Consumption(mil. bu.) 4,058 4,008
Ending stocks (mil. bu.) 425 474
Stocks-to-use 10.5% 11.8%
Average farm price ($/bu.) $8.70 $8.60
Figure 10: 2020 Principal Crops Planted Area (000) Acres and Change from Previous Year
319.0 315.4 314.3324.3 324.9 326.7
319.1 319.0 318.3 319.3
302.6
319.8*
33.731.2 31.2
29.7 27.0 25.6
24.2 23.9 22.6 22.4
22.0
22.5
4.26.9 9.6
1.2 8.3 4.4
6.7 3.42.6 1.9
19.6
3
270
280
290
300
310
320
330
340
350
360
370
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Principal Crops CRP Prevent Plant
345.3
* March Planting Intentions ** Projected
Figure 11. Acreage Summary for Principal Crops, CRP, and PPM
illio
n Ac
res
**
361.9356.9 353.5 355.1
355.2360.2
356.4349.8 343.5 343.6 344.2
96,990
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
100,000
thou
sand
s
Planted
HarvestedAvg. Guess = 94,328 thousand acres
Source: Reuters Mar 26, 2020Corn Acres Higher Than Trade Guess
Figure 12. Planted and Harvested Acreage of Corn
Figure 13. 2020 Corn Planted Area (000) Acres and Change from Previous Year
96.99 Mil. Acres of Corn to be Planted in U.S. in 2020 Up 7.3 Mil. Acres from 2019Up 7.8 Mil. Acres from 2018
-616
-833
1,67
0
-991
-153
-419
1,92
5
366
308
3,07
3
-32
1,39
6
-606 -2
42
1,42
7
-1,9
17
-1,0
94
-1,1
80
403
171
845
-3,0
92
4,000
3,000
2,000
1,000
0
1,000
2,000
3,000
4,000
thou
sand
acr
es
Actual acreage always differs from March intentions.Which way in 2020? Down? Depends on weather and price.
Figure 14: Actual Planted Acres of Corn Minus March Intentions
83,510
50,000
55,000
60,000
65,000
70,000
75,000
80,000
85,000
90,000
95,000
thou
sand
s Planted
Harvested
Avg. Guess = 84,865 thousand acresSource: Reuters Mar 26, 2020
Soybean Acres Lower Than Trade Guess
Figure 15: Planted and Harvested Acreage of Soybeans
Figure 16: 2020 Soybean Planted Area (000) Acres and Change from Previous Year
83.5 Mil. Acres of Soybeans to be Planted in U.S. in 2020 Up 9.7 Million Acres from 2019Down 5.6 Million Acres from 2018
25625
-605
-2,582
997222
-203
-1,878-1,373
-2,399
9251,427
-394
-1,563
3,296
-306
1,783
-1,985
1,217680
185
-8,5179,000
7,000
5,000
3,000
1,000
1,000
3,000
thou
sand
acr
es
Actual acreage always differs from March intention Which way in 2020? Up? Depends on weather and price.
Figure 17: Actual Planted Acres of Soybeans Minus March Intentions
7,57
6
6,89
9
7,11
1
6,93
4
9,56
4
7,65
9
7,29
8
6,66
2
7,68
9
7,00
7
7,41
2
6,89
2
6,74
6
8,05
7
9,92
6
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7,45
1
7,26
6
7,25
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7,43
4
7,59
5
7,85
8
0
2,000
4,000
6,000
8,000
10,000
thou
sand
acr
esFigure 18: Planted Minus Harvested Acres of Corn
y = 1.8647x + 59.48R² = 0.9115
0
20
40
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120
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1960- 1965- 1970- 1975- 1980- 1985- 1990- 1995- 2000- 2005- 2010- 2015-
bu. p
er a
c.
2020 Trend Yield177.5 bpa
Figure 19: U.S. Average Corn Yield
Figure 20: Corn Balance USDA Outlook Forum
2020/21 2020/21Supply: Planted Acreage (million acres) 94.0 95.0Harvested Acreage (million acres) 86.6 87.6Yield (Bushels / Acre) 178.5 177.5Total Production(million bushels) 15,460 15,549Beginning Stocks(million bushels) 1,892 2,039Imports (million bushels) 25 25
Total Supply (million bushels) 17,377 17,613
Consumption: Feed and Residual (million bushels) 5,800 5,700
Food, Seed, and Industrial (million bushels) 6,840 6,865 Ethanol (million bushels) 5,450 5,475
Exports (million bushels) 2,100 2,150 Total Consumption (million bushels) 14,740 14,715
Ending Stocks (million bushels) 2,637 2,898Ending Stocks/Total Consumption (%) 17.9% 19.7%
Average Price ($/bu.) $3.60 $3.35
1,584
1,284
1,858
1,100
1,466
928
1,250
781920
595
1,037 1,079
794
1,270
1,054
587685
918747
620
1,573
1,079
0
500
1,000
1,500
2,000
2,500
3,000
thou
sand
acr
esFigure 21: Planted Minus Harvested Acres of Soybeans
y = 0.4346x + 21.191R² = 0.9005
0
10
20
30
40
50
60
bu. p
er a
c.
2020 Trend Yield50.3 bpa
Figure 22: U.S. Average Soybean Yield
Figure 23: Soybean Balance USDA Outlook Forum
2020/21 2020/21Supply:
Planted Acreage (mil.) 85.0 85.5Harvested Acreage (mil.) 84.2 84.7Yield (bu./ac.) 49.8 50.3
Production (mil. bu.) 4,195 4,260Beginning stocks (mil. bu.) 425 474Imports (mil. bu.) 15 15
Total Supply (mil. bu.) 4,635 4,749
Consumption:Crush (mil. bu.) 2,130 2,120 Export (mil. bu.) 2,050 2,100 Seed and feed (mil. bu.) 134 134
Total Consumption(mil. bu.) 4,314 4,354
Ending stocks (mil. bu.) 320 395Stocks-to-use 7.4% 9.1%Average farm price ($/bu.) $8.80 $8.60
Closing Comments• March 1 Stocks Report Showed:
– March 1 corn stocks lower than expected– Forecast of feed and residual use of corn raised 75 million bushels
• U.S. Farmers intend to plant:– 7.3 million more corn acres, 70K fewer spring wheat acres
and 555K more sorghum acres– 7.4 million more soybean acres and 35K fewer cotton acres
• Balance Sheet Implications– Expect larger corn and soybean crops in 2020– Expect corn stocks to increase substantially
and soybean stocks to increase modestly– Lower corn and soybean prices MY 2020/21
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Scott [email protected]
Todd [email protected]