USDA’s initial look at the 2020-21 crop projects record corn production at 15.5 billion bushels (bb) and a larger soybean crop as well at 4.195 billion bushels, with both seeing significant gains in new-crop exports.
USDA’s corn forecast shows a 745 million bushel (mb) increase in 2020-21 ending stocks that will raise the stocks-to-use ratio and bring down prices. Soybean ending stocks to use will come down significantly for the 2020-21 crop to 7.4%, which will slightly bump up soybean prices.
USDA’s Prospective Plantings report will be released on March 31 and the World Agricultural Supply and Demand Estimates (WASDE) reports will start accounting for the 2020-21 crop in May.
USDA’s corn outlook for 2020-21 sees both record production and domestic use, higher exports and higher ending stocks. With 94 million acres (ma) planted and a projected yield at 178.5 bushels per acre (bpa), USDA is forecasting a 15.5 bb corn crop.
Total corn use for 2020-21 is expected to rise 5% from a year ago on record domestic use and a rebound in exports, USDA stated. Feed and residual use is expected to increase 275 mb to 5.8 bb with a larger crop and continued growth in grain-consuming animals, and lower expected prices.
Exports are projected to rise 375 mb to 2.1 bbu, “reflecting expectations of global trade growth, but with continued competition from other exporters such as Argentina, Brazil and Ukraine.”
Food, seed and industrial use is projected at 6.8 bb, “driven by slightly higher corn used for ethanol.”
Ending stocks for the 2020-21 crop are projected at 2.637 bb, up 745 mb from the 2019-20 crop. With total use pegged at 14.74 bb, that puts the stocks-to-use ratio at 17.9%, significantly higher than any of the past three corn crops.
The farm-gate price for the 2020-21 crop is projected at $3.60 per bushel, down 25 cents from the forecast 2019-20 price.
The 2020-21 soybean crop is forecast for higher supplies, crush and exports, but lower ending stocks than the 2019-20 crop. With planted acreage projected at 85 ma and a projected yield of 49.4 bpa, soybean production is forecast at 4.195 bb, 18% higher than the 2019-20 crop, but still lower than the two prior years.
Total supplies are projected at 4.635 bb following a 425 mb carryover from the 2019-20 crop.
Soybean crush is projected at a record 2.1 bb, driven by higher domestic demand for soybean meal that more than offsets slightly lower soymeal exports.
Soybean exports are projected at 2.05 bb for 2020-21, up 225 mb from the 2019-20 crop. “Increasing global demand, particularly from China, and a recovery in the U.S. market share will support higher U.S. soybean exports following a sharp decline over the past two years.”
Soybean ending stocks for 2020-21 are projected at 320 mb, down 105 mb from the 2019-20 ending stocks and the lowest since 2016-17. With a 6% increase in projected use, the stocks-to-use ratio for soybeans is projected at 7.4%, down from 10.5% in 2019-20.
The farm-gate price for soybeans is projected at $8.80 a bushel, up 5 cents from the 2019-20 crop.
The 2020-21 outlook for wheat shows tighter supplies, slightly lower total use and declining ending stocks. All-wheat production is projected down 4% from 2019-20 to 1.836 bb on lower projected yield of 48.2 bpa. Acreage is projected at 45 ma, down 200,000 acres from 2019-20.
Total supply is projected at 2.916 bb with total domestic use pegged at 1.139 bb, down 26 mb from the 2019-20 crop.
Exports remain flat, projected at 1 bb, the same as the 2019-20 crop.
Total ending stocks, with a smaller crop, will come down 163 mb to 777 mb. That brings down the stocks-to-use ratio to 36.3% from 43.4% for the 2019-20 crop.
The farm-gate price for wheat is projected at $4.90 a bushel, up 35 cents a bushel from the 2019-20 crop.
Chris Clayton can be reached at Chris.Clayton@dtn.com
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Source: Chris Clayton, DTN
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