July 15, 2019
USDA’s U.S. and global rice, corn, soybean, and cotton balance sheets show formidable supplies.
Bullish price considerations. Final U.S. and global acreage and/or yield figures come in below USDA’s current expectations; weather stress erodes U.S. and global production projections as the year progresses; and significant progress is made in the US-China and other trade disputes.
Bearish price considerations. Acreage stays at current or above levels; weather supports U.S. and global production; and US-China trade disputes in the aggregate continue weighing heavily on U.S. export demand for soybeans, corn, wheat, and cotton.
U.S. and Global Commodity Supplies Formidable
Visualization through the accompanying supply and demand slide show is all important to this article. I have replicated key slides and moved them to the front of the slide show for a condensed summary, Charts A1-A12, so please take the time to download and review.
Key points to consider as analysts ratchet up their analyses of the closing months of the 2018/19 marketing period and turn their attention to the 2019/20 marketing period: First, late planting, due to continuous rainfall during the 2019 planting season has created significant acreage uncertainty for corn, soybeans, rice and cotton. Second, changing U.S. and global weather patterns have added an additional enhanced layer of uncertainty to the U.S. and global supply and demand balance sheets that does not normally exist.
U.S. and Global Rice
World All Rice Ending Stocks: 2019/20 world rice ending stocks are the highest on record at 172.7 million metric tons, Chart A1.
United States Long Grain Rice Ending Stocks: 2019/20 U.S. long grain rice ending stocks are estimated at 31.2 million cwt., 7.1 percent below 2018/19, but the second highest in the current 9 marketing periods and the fourth highest since 1985, Chart A3.
United States Medium Grain Rice Ending Stocks: 2019/20 medium grain rice ending stocks are estimated at 17.9 million cwt., or the third highest since 1986, Chart A4.
USDA Long Grain Rice Price: 2018/19 and 2019/2020 average farm prices are $10.70 per cwt and $10.50 per cwt, respectively.
USDA Medium Grain California Rice Price: 2018/19 and 2019/2020 average farm prices are $18.00 per cwt and $18.00 per cwt, respectively.
USDA Medium Grain Southern Rice Price: 2018/19 and 2019/2020 average farm prices are $12.20 per cwt and $11.00 per cwt, respectively
U.S. and Global Soybeans
World Soybeans Ending Stocks. 2019/20 world soybean ending stocks are the 2nd highest on record estimated at 104.5 million metric tons, Chart A5.
United States Soybeans Ending Stocks: 2019/20 United States ending stocks are the 2nd highest on record estimated at 21.6 million metric tons, Chart A6.
USDA Soybean Price: 2018/19 and 2019/2020 average farm prices are $8.50 per bushel and $8.40 per bushel, respectively.
U.S. and Global Corn
Global Corn Ending Stocks: 2019/20 world corn ending stocks estimated at 299 million metric tons, down from the previous 4 marketing periods but still the 5th highest on record, Chart A7.
U.S. Corn Ending Stocks 2019/20 U. S. corn ending stocks estimated at 51 million metric tons below the previous 3 marketing periods, but the sixth highest since 1987, Chart 8.
USDA Corn Price: 2018/19 and 2019/2020 average farm prices are $3.60 per bushel and $3.70 per bushel, respectively.
U.S. and Global Cotton
Global Cotton Ending Stocks: 2019/20 world cotton ending stocks estimated at 79.3 million bales or the lowest in the current 7 marketing periods, Chart 9.
U.S. Cotton Ending Stocks: 2019/20 United States cotton ending stocks estimated at 4.4 million bales, the highest in the current 9 marketing periods, Chart 10.
USDA Cotton Price: 2018/19 and 2019/2020 average farm prices are $0.70 cents per pound and $0.63 cents per pound, respectively.
U.S. and Global Wheat
Global Wheat Ending Stocks: 2019/20 world wheat ending stocks estimated at 286.5 million metric tons, the highest on record, Chart 11.
U.S. Wheat Ending Stocks: 2019/20 U.S. ending stocks declined from a high in 2016/17 of 32.1 million tons to 2019/20’s 27.2 million metric tons, but remains the 4th highest since 1987/88, Chart 12.
Accompanying Chart Book Index
A1-A12. Select Rice, Soybean, Corn, Cotton and Wheat Charts (metric tons)
B1-B14. Eleven World Rice and Three United States Charts (metric tons)
C1-C23. U.S. Long and Medium Grain Charts (million cwt.)
D1-D13. Select World and U.S. Soybean Charts (metric tons)
E1-E9. Select World and U.S. Corn Charts (metric tons)
F1-F12. Select World and U.S. Cotton Charts (metric tons)
G1-G24. Select World and U.S. Wheat Charts (metric tons)
Quite simply, the remaining 2018/19 marketing period and the 2019/20 marketing period will continue to be a highly challenging business environment, so one’s production, financial and marketing advisors will be most critical to 2019 business success.
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.
Source: Bobby Coats is an economist with the Arkansas Department of Agriculture. E-mail: [email protected] and is solely responsible for the information provided and is wholly owned by the source. Informa Business Media and all its subsidiaries are not responsible for any of the content contained in this information asset.
Download Slide Show for charts and expanded details, Click Download Link
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