The accompanying slide show is important to this article. In a nutshell, the 2019 global rice, soybean, corn, cotton, and wheat markets are facing strong headwinds from burdensome global supplies, anemic global growth, and highly contentious global trade and other policy disputes.
The March 29, 2019 USDA Prospective Planting Report is not expected to improve the outlook for supply and demand fundamentals for U.S. row crops, unless Mother-Nature limits planted acreage and/or 2019 production.
All which will make the remaining 2018/19 and the 2019/20 U.S. rice, grains and cotton marketing periods volatile, mis-directional, hostage to global governments and central banks stimulation intervention activities, or simply a highly challenging business environment; production, financial and marketing advisors will be most critical to farmers’ 2019 business success.
2019 farm business environment. This year, producers want to exceed all farm business productivity, efficiency, and profitability goals; competition is next door, regional, national and global, since the business and production headwinds will likely be formidable. Never forget, for the U.S. and global business sectors, this is a consolidation period that the farm sector will not escape.
Reality is. The March 29, 2019 planting intentions report will likely reveal strong U.S. planting and production intentions relative to anticipated demand for rice, corn, soybeans, cotton, and total wheat acreage.
Possible production constraints. The rotation from a global warming to a global cooling trend appears to have building validity, so, the probability of building U.S. and global weather constraints on acreage planted and/or total production is real. That said, emerging technologies and production and business efficiencies in recent years have limited global anomaly weather and other disruptive U.S. and global production impacts.
Global growth and policy. I have written extensively about global growth challenges and the highly contentious global trade and other policy disputes, so I am not going to belabor the issue here. Besides, I will follow this article with an updated article on the U.S. Fed’s recent monetary policy actions, global growth and other policy issues, and market outlook.
Bearish Global Fundamentals Summarized
Rice. World rice production, total supply, and ending stocks are all the largest on record (Charts B1-B9). Download the chart book that is attached to this article.
Soybeans. World soybean production, total supply, and ending stocks are also the highest on record (Charts B10-B12).
Corn. World corn production is the 2nd highest on record, while total supply is the highest on record, but the good news is that ending stocks are the 4th highest on record and the lowest in the current four production periods (Charts B13-B15).
Cotton. World cotton fundamentals are more favorable in the pre-planting intentions report with production the 9th largest on record; total supply is the fifth largest on record, and ending stocks are the lowest since 2011 (Charts B16-18).
Wheat. World wheat production is down slightly from the previous three production periods, but the 4th highest on record. Total supply is down slightly from the previous production period and the second highest on record. Ending stocks are slightly below the previous production period, but still the 2nd highest on record (Chart B19-20).
USDA World Rice Supply and Demand Outlook
First, milled production shows 2018/19 world rice milled production increased from 495.9 in February 2019 to 501.6 million metric tons in March and is the highest on record (Chart B3).
Second, total supply shows 2018/19 world rice total supply increased from 703 million metric tons (MMT) in February 2019 to 708.8 MMT in March 2019 and is the largest on record (Chart B5).
Third, ending stocks reports shows 2018/19 world rice ending stocks increased from 167.6 MMT in February 2019 to 172.2 MMT in March 2019 and is the highest on record (Chart B8).
U.S. long grain rice
First, 2018/19 long grain rice ending stocks are estimated at 34.8 million cwt., 60 percent above 2017/18 and the 2nd highest since 1985; the five-year average is 23 million cwt., and the 10-year average is 24 million cwt (Chart C1-C9).
Second, remember global rice production, total supply, and ending stocks are at record levels and presently bearish global rice prices.
Third, currently, global policy disputes, economic and political uncertainties have slowed global growth. This, coupled with record global rice production and record global total supplies, continue depressing global rice prices.
USDA World Soybeans Supply and Demand Outlook
Production. 2018/19 world soybean production increased to 360 MMT from 2017/18’s 340.5, the highest on record (Chart B10).
Total supply. 2018/19 world soybean total supply increased from 2017/18’s 590 MMT to 610, the largest on record (Chart B11).
Ending stocks. 2018/19 world soybean ending stocks increased from 98.6 MMT the previous production period to 107.2 MMT by far the highest on record (Chart B12).
USDA World Corn Supply and Demand Outlook
Production. 2018/19 world corn production increased from 2017/18’s 1,076 MMT to 1,101, which is the second highest on record (Chart B13).
Total supply. 2018/19 world corn total supply increased from 2017/18’s 1,577 MMT to 1,603, the largest on record (Chart B14).
Ending stocks. 2018/19 world corn ending stocks decreased from 341.2 MMT the previous production period to 308.5 MMT the fourth largest on record and the smallest in the current 4 production periods (Chart B15).
USDA World Cotton Supply and Demand Outlook
Production. 2018/19 world cotton production decreased slightly from the 2017/18 123.8 million bales to 118.9 million bales, which is still the second highest in the current four production periods (Chart B16).
Total supply. 2018/19 world cotton total supply declined from 2017/18, down from 245.1 million bales to 242.2, or the 5th largest in the current seven production periods (Chart B17).
Ending stocks. 2018/19 world cotton ending stocks are at a five year low at 76.1 million bales, or the 7th largest on (Chart B18).
USDA World Wheat Supply and Demand Outlook
Production. 2018/19 world wheat production declined slightly from 2017/18’s 763 MMT to 733, below the previous 3 production periods, but still the fourth largest on record (Chart B19).
Total supply. 2018/19 world wheat total supply declined slightly from 2017/18’s 1,203 MMT to 1,189, or the 2nd largest on record (Chart B20).
Ending stocks. 2018/19 world wheat ending stocks declined from 2017/18’s 280 million tons the previous production period to 270.5, but still the 2nd highest on (Chart B21).
Download Slide Show for charts and expanded details, Click Download Link