Mammoth U.S. Corn and Soy Crops to Keep Supplies Large, Constrain Prices
WASHINGTON -- U.S. farmers are headed for massive corn and soybean harvests this year – the second-largest soybean crop and third-largest corn crop – that will mean another year of large stockpiles and will throttle farmgate prices into the summer of 2019, said USDA on Friday.
At its annual Outlook Forum, USDA projected a corn crop of 14.39 billion bushels and a soybean crop of 4.32 billion bushels, assuming normal weather and yields from plantings of 90 million acres for each crop, a slight reduction from 2017 acreage.
The bumper crops would be the the latest in a string of record-large crops. The four largest U.S. soybean crops were grown from 2014 to 2017, including back-to-back record crops in 2016 and 2017, and the five largest U.S. corn crops were grown from 2013 to 2017, with the record of 15.148 billion bushels set in 2016.
"Soybean supplies for 2018/2019 are projected at a record 4,875 million bushels, up 3% from 2017/2018 with higher beginning stocks more than offsetting lower production," said USDA. "Corn supplies for 2018/2019 decline from the record high in 2017/2018 but remain relatively large." Corn supplies were expected to total 16.792 billion bushels.
Corn for ethanol was projected for 5.65 billion bushels in 2018/2019, up by 125 million bushels from the current marketing year.
End stocks for corn in 2018/2019 were expected to total 2.272 billion bushels, compared with the 2.352 billion bushels forecast for 2017/2018. Soybean end stocks were projected at 460 million bushels in 2018/2019 vs. the 530 million bushels forecast for 2017/2018.
The season-average corn price was projected for $3.40 a bushel and soybeans at $9.25 a bushel in 2018/2019. The farmgate price for 2017 crops is estimated by USDA at $3.30 a bushel for corn and $9.25 a bushel for soybeans.
Although commodity prices suggest soybeans will be more profitable than corn, USDA said other factor mitigate against a large expansion of soybean acres. Nitrogen fertilizer prices are down, making corn less expensive to grow. "In addition, the potential for a sharp increase in soybean area is dampened by rotational constraints with the possibility of yield drag and increased disease and pest pressure from planting soybeans on soybeans," said USDA.