Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: Central
stanley45-IStock-GettyImagesPlus.jpg stanley45/IStock/GettyImagesPlus
In 2019 U.S. corn and soybean producers faced an array of production challenges from droughty conditions, excessive heat, tropical storms, etc.

Current marketing period remains highly challenging

The 2019/20 marketing period will continue to be a highly challenging business environment.

The current marketing period is and will continue to be a highly challenging business environment, so one’s production, financial and marketing advisors remain critical to one’s 2019/20 business success. Price considerations, both bullish and bearish, weigh on this marketing season exceptionally unpredictable.

Visualization through the accompanying supply and demand slide show is all important to this article. Key slides have been replicated and moved to the front of the slide show, so download and review, Charts A1-A20.

Bullish price considerations.

  • First, U.S. production unknowns, though improving, remain elevated for soybeans and corn. Lateness of planting caused by excessive rain, flooding, etc. during the planting season still raises questions about final production and quality, because of major growing season differences from one U.S. production region to the other. In 2019 U.S. corn and soybean producers faced an array of production challenges from droughty conditions, excessive heat, tropical storms, etc. and now uncertainties from freeze damage and other production and harvest factors.   
  • Second, concerns are potentially justifiable that global weather patterns will slowly erode global production and increase export demand for one or more commodities as the 2019/20 global marketing period progresses.
  • Third, hope remains that trade talks will yield a return to more normal trade and policy relations with China and other trading partners.

Bearish price considerations.

  • First, the late 2019 planting season, which extended the growing season, into a potentially dangerous harvest period, will not have a significant impact on yield, quality, and final production to a degree that will significantly elevate demand and price for grains, rice, and cotton.  
  • Second, to date global production efficiencies have overcome global production constraints, due to weather, disease, insect, and other issues and limited food security concerns.
  • Third, trade negotiations especially with China and other trading partners will dramatically fall short of raising demand to pre-tariff levels and new global buyers will not emerge.   

U.S. and World Rice

  • World Rice Ending Stocks. 2019/20 world rice ending stocks estimated at 175 million metric tons, the highest on record with, stocks progressively moving higher each marketing period since 2007/08, Chart A1.
  • U.S. Long Grain Rice Ending Stocks. 2019/20 long grain rice ending stocks estimated at 20.1 million cwt., down 38% from 2018/19, continuing the cycle of high-low ending stocks every other year, an economic/weather phenomenon, Chart A2.
  • USDA Long Grain Rice Price. 2018/19 and 2019/20 average farm prices are $10.80 per cwt ($4.86 per bushel) and $11.80 per cwt ($5.31 per bushel), respectively, Chart C8.
  • USDA Medium Grain California Rice Price. 2018/19 and 2019/20 average farm prices are $18.00 per cwt ($8.10 per bushel) and $18.50 per cwt ($8.33 per bushel), respectively, Chart C18.
  • USDA Medium Grain Southern Rice Price. 2018/19 and 2019/20 average farm prices are $12.30 per cwt ($5.54 per bushel) and $12.30 per cwt ($5.54 per bushel), respectively, Chart C19.

U.S. and World Soybeans

  • World Soybean Total Supply. 2019/20 world soybean total supply estimated at 597 million metric tons, the 2nd highest on record, only slightly below 2018/19’s 604 million metric tons, Chart D5.
  • World Soybean Ending Stocks. 2019/20 world soybean ending stocks estimated at 95 million metric tons the 4th highest on record, 13% below 2018/19’s 110 million metric tons, Chart D7.
  • U.S. Soybean Total Supply. 2019/20 world soybean total supply estimated at 122 million metric tons, the 4th highest on record, 8% below 2018/19, Chart D9.
  • U.S. Soybean Ending Stocks. 2019/20 United States ending stocks are estimated at 12.5 million metric tons the 4th highest on record, 50% below 2018/19, Chart D11.

U.S. and Global Corn

  • World Corn Total Supply. 2019/20 world corn total supply estimated at 1.594 billion metric tons, the 2nd largest on record and consistent with the current four marketing periods, Chart E5.
  • World Corn Ending Stocks. 2019/20 world corn ending stocks estimated at 303 million metric tons, down from the previous 4 marketing periods but still the 5th highest on record, Chart E7.
  • U.S. Corn Total Supply. 2019/20 U.S. corn total supply estimated at 405 million metric tons, the 4th largest on record, but down from the previous three marketing periods, Chart E9.  
  • U.S. Corn Ending Stocks. 2019/20 U. S. corn ending stocks estimated at 49 million metric tons, the 6th highest since 1987, Chart E11.

U.S. and Global Cotton

  • World Cotton Total Supply. 2019/20 world cotton total supply estimated at 248.4 million bales, the 3rd highest on record, and the highest in the current five marketing periods, Chart F5.
  • World Cotton Ending Stocks. 2019/20 world cotton ending stocks estimated at 83.7 million bales, slightly above the three previous marketing periods and the 5th largest on record, Chart F7.
  • U.S. Cotton Total Supply. 2019/20 U.S. cotton total supply estimated at 27 million bales, the fifth highest on record and the highest in the current 12 marketing periods, Chart F9.
  • U.S. Cotton Ending Stocks. 2019/20 United States cotton ending stocks is estimated at 7.2 million bales, the highest in the current 12 marketing periods, and the 6th highest on record, Chart F11.

U.S. and Global Wheat

  • World Wheat Total Supply. 2019/20 world wheat total supply is estimated at 1.219 billion metric tons, the highest on record, Chart G5.
  • World Wheat Ending Stocks. 2019/20 world wheat ending stocks is estimated at 288 million metric tons, the highest on record, Chart G7.
  • U.S. Wheat Total Supply. 2019/20 U.S. wheat total supply estimated at 86 million metric tons, fairly consistent with the current 12 marketing periods, Chart G9.
  • U.S. Wheat Ending Stocks. 2019/20 U.S. ending stocks declined from a high in 2016/17’s 32.1 million tons to 2019/20’s 28.4, but remains the 4th highest since 1987/88, Chart G11. 

 Accompanying Fundamental Chart Book Index

  • A1-A20. Global and U.S. Ending Stocks: Rice, Soybean, Corn, Cotton and Wheat Charts (metric tons).
  • B1-B15. Twelve World Rice and Three United States Charts (metric tons).
  • C1-C19. U.S. Long and Medium Grain Rice Charts (million cwt.).
  • D1-D11. Select World and U.S. Soybean Charts (metric tons).
  • E1-E11. Select World and U.S. Corn Charts (metric tons).
  • F1-F11. Select World and U.S. Cotton Charts (metric tons).
  • G1-G11. Select World and U.S. Wheat Charts (metric tons).

No Crystal Ball

Since no one has a crystal ball or knows the future always consult an investment professional or professionals before making investment decisions. The world’s greatest speculators, investors and money managers are challenged by today’s global business environment.   

Robert Coats, Ph.D. - Economist, Arkansas Department of Agriculture, 1 Natural Resources Drive, Little Rock, Arkansas robert.coats@agriculture.arkansas.gov 

Download Slide Show for charts and expanded details, Click Download Link

DISCLAIMER-FOR-EDUCATIONAL-PURPOSES-ONLY

Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish