ARLINGTON, VIRGINIA, U.S. — Exports of U.S. agricultural products were already trending lower before Chinese retaliatory tariffs devasted some markets, particularly U.S. soybeans. Although the U.S. Department of Agriculture’s projections for 2019 assume maintenance of that 25% tariff, there are some bright spots for U.S. exports.
That was the message Friday morning from Jennifer Bond, PhD, an agricultural economist with the Crops Branch, Markets and Trade Economics Division. Bond currently coordinates the Wheat and Pulses Outlook programs.
Bond presented the USDA’s 2019 projections for U.S. soybeans, corn and wheat in a breakout session at the 2019 Agricultural Outlook Forum at Crystal Gateway Marriott Hotel in Arlington.
Global economic growth, as measured by gross domestic product, is expected to slow, impacting many sectors, including food, since consumers tend to change buying patterns in tight times, such as purchasing fewer protein meats.
- First discussing soybean projections, Bond noted:
- Cash prices below $8 a bushel, lowest since March 2009.
- Soybean production for 2019-20 forecast at 4.2 billion bushels, 8% below 18-19.
- Higher soybean carry-in offsets lower production.
More positive news comes from the utilization side, Bond said:
- Crush advanced on relatively good soy oil and soymeal prices.
- Brazil stocks, relatively lower last year, expected to be lower again this year.
- However, carryout for 2019-20 was forecast larger than the five-year average of 20 million bushels.
Noting corn crops will take some acreage from soybeans this year, Bond said:
- The U.S. 2019-20 corn crop is projected at 14.9 billion bushels, up 3% from 2018-19.
- Corn ethanol use is seen flat based on slightly reduced domestic demand offset by expanded exports.
- Feed and residual use is seen up 125 million bushels to 5.5 billion bushels on growth in Grain Producing Animal Units.
- Exports seen up 25 million bushels on a modest decline in U.S. share.
- Ending stocks at 1.65 billion bushels, down about 5% from 2018-19.
Concluding with projections on wheat, Bond said:
- Production seen up 1% on anticipated expansion of other spring wheat sowings despite lower-than-expected winter wheat plantings.
- Expanded corn supplies inhibit much growth in feed and residual up just 10 million from 2018-19.
- Exports down 25 million year to year on rebounding exportable supplies from E.U. and Australia.
- Carryout remains large, limits price advancement.
Critical issues to keep an eye on in the coming year include U.S. spring weather, trade relations, ethanol demand and production and international weather.
Bond noted that the May World Agricultural Supply and Demand Estimates update to 2019-20 will reflect the March 29 prospective plantings report, survey based forecasts for winter wheat production and updated international country-by-country supply and demand production.