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
Cotton-Preharvest_BT_Edits.jpeg.jpg Brent Murphree
Lateness of planting caused by excessive rain, flooding, etc. during the planting season still raise questions about final production and quality outcome.

Unknowns continue to dominate grain, rice and cotton markets

Predictions for price are still in unknown territory as outcomes have yet to be determined.

As unknown outcomes for harvest and price continue in the commodities market, trade and weather patterns are creating uncertainty for producers and those marketing their crops. 

The attached slide show is important to illustrate the points of this piece and can be accessed by the link at the bottom of this article.  Key slides have been replicated and moved to the front of the slide show, so download and review, Charts A1 through A21. 

Bullish price considerations are as follows:

  • First, U.S. production unknowns though improved remain elevated especially for soybeans and corn, and to a lesser degree for cotton and rice. Lateness of planting caused by excessive rain, flooding, etc. during the planting season still raise questions about final production and quality outcome, due to potential emerging droughty conditions, early freeze, tropical storms, etc.
  • Second, concerns are likely increasingly justifiable that global weather patterns will slowly erode global production and increase export demand for one or more commodities as the 2019/20 global production period progresses.
  • Third, hope remains trade talks will yield a return to more normal trade relations with China and other trading partners.

Bearish considerations follow below:

  • First, no one argues the late 2019 planting season has extended the growing season, will culminate in a late harvest period, with yields, overall quality, and production being impacted. The degree of impact is still up for debate. 
  • Second, changing global weather patterns during the remainder of the 2019/20 marketing period will increasingly place challenges on global producers’ ability to achieve normal production goals. This does and will continue to raise concerns about individual country and collective global food security, which will likely be price supportive. To date global production efficiencies have overcome global production pressures from a variety of sources and limited food security concerns.
  • Third, trade negotiations especially with China and other trading partners will fall far short of raising demand to pre-tariff levels.  

U.S. and World Rice

  • World Rice Ending Stocks. 2019/20 world rice ending stocks estimated at 172.7 million metric tons is the highest on record, Chart A1.
  • U.S. Long Grain Rice Ending Stocks. 2019/20 long grain rice ending stocks estimated at 19.3 million cwt is 41 percent below the 2018/19 marketing period and 5 percent below 2017/18, 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 $12.00 per cwt ($5.40 per bushel), respectively, Chart C9.
  • 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 $12.50 per cwt ($5.63 per bushel), respectively, Chart C19.

U.S. and World Soybeans

  • World Soybean Total Supply. 2019/20 world soybean total supply estimated at 602 million metric tons, the second highest on record, only slightly below 2018/19’s 607.5 million metric tons, Chart D8.
  • World Soybean Ending Stocks. 2019/20 world soybean ending stocks estimated at 99.2 million metric tons, the second highest on record, 11.8 percent below 2018/19’s 112.4 million metric tons, Chart D7.
  • U.S. Soybean Total Supply. 2019/20 U.S. soybean total supply estimated at 126.8 million metric tons is the third highest on record, but 6.8 percent below 2018/19, Chart D9.
  • U.S. Soybean Ending Stocks. 2019/20 United States ending stocks are estimated at 17.4 million metric tons the second highest on record, 36.2 percent below 2018/19, Chart D11.

U.S. and Global Corn

  • World Corn Total Supply. 2019/20 world corn total supply estimated at 1.604 billion metric tons, the second 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 306.3 million metric tons, down from the previous four marketing periods, but still the fifth highest on record, Chart E7.
  • U.S. Corn Total Supply. 2019/20 U.S. corn total supply estimated at 413.9 million metric tons, the fourth 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 55.6 million metric tons is the third highest since 1987, Chart E11.

U.S. and Global Cotton

  • World Cotton Total Supply. 2019/20 world cotton total supply estimated at 249 million bales, the third 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 83.5 million bales, slightly above the three previous marketing periods and the fifth largest on record, Chart F7.
  • U.S. Cotton Total Supply. 2019/20 U.S. cotton total supply estimated at 26.7 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 estimated at 7.2 million bales, the highest in the current 12 marketing periods, fifth highest on record, Chart F11.

U.S. and Global Wheat

  • World Wheat Total Supply. 2019/20 world wheat total supply estimated at 1.220 billion metric tons, the highest on record, Chart G5.
  • World Wheat Ending Stocks. 2019/20 world wheat ending stocks estimated at 286.5 million metric tons, the highest on record, Chart G7.
  • U.S. Wheat Total Supply. 2019/20 U.S. wheat total supply estimated at 86.7 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 2016/17’s high of 32.1 million metric tons to 2019/20’s 27.6, but remains the fourth highest since 1987/88, Chart G9. 

Accompanying Fundamental Chart Book Index

  • A1-A16. Global and U.S. Ending Stocks: Rice, Soybean, Corn, Cotton and Wheat Charts (metric tons)
  • B1-B14. Eleven World Rice and Three United States Charts (metric tons)
  • C1-C19. U.S. Long and Medium Grain Rice Charts (million cwt.)
  • D1-D12. Select World and U.S. Soybean Charts (metric tons)
  • E1-E9. Select World and U.S. Corn Charts (metric tons)
  • F1-F9. Select World and U.S. Cotton Charts (metric tons)
  • G1-G9. Select World and U.S. Wheat Charts (metric tons)

Quite simply the 2019/20 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 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: robert.coats@agriculture.arkansas.gov 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

 

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