First look at 2018 acreage estimates, crop outlook

By Justin Walker

Preliminary supply, demand and price outlooks were released following a recent U.S. Department of Agriculture report.

Bryce Knorr, senior grain market analyst for Farm Futures, noted interesting production shifts, but no significant adjustments in the grain markets as a result of the report.

“The market has already discounted USDA’s acreage estimates, believing growers will opt to plant more soybeans and less corn, because soybeans offer a better shot at profits,” Knorr said.

Production estimates for corn are down one percent from the previous year at 14.9 billion bushels. This is attributed to lower planted acres. While this is a decline from record highs in supplies, it still remains relatively large.

Corn feed and residual use values are projected to fall 75 million bushels to 5.475 billion. Feed, seed and industrial use and ethanol use are both expected to rise to record amounts, 7.145 billion and 5.650 billion bushels respectively.

Pressure from Argentina, Brazil and Ukraine is cited as a major cause in lower projected corn export estimates. Those numbers are down 150 million bushels to 1.9 billion.

Soybean supplies are expected to rise three percent, up to 4.875 billion bushels. These numbers could be lower by as much as two percent, as slightly lower planted area and trend yields could impact totals.

Domestic use and oil domestic use are projected to be up. Domestic soybean use values are expected to be at 2.115 billion bushels, up one percent. Oil domestic use could reach 21.35 billion pounds, up 1.2 percent.

Soybean exports could climb 200 million bushels, up to 2.3 billion in 2018.

“The number that really jumps off the pages is USDA’s forecast for 2018 crop soybean exports,” Knorr says. “They show sales returning to record levels after a disappointing 2017 season. We’ll see how that plays out, especially with Brazil still increasing production and China rattling the sabers of a trade war.”

Wheat production values could see a 98 million-bushel increase in 2018, a six percent increase over 2017 numbers.

Domestic use is projected to reach 1.127 billion bushels, up 10 million from last year. Food and seed usage is expected to rise to 955 million and 62 million bushels, respectively.

Exports of wheat could take a hit in 2018, with projected values at 925 million bushels. That’s down 25 million bushels. This is attributed to strong international competition from the European Union, Australia, Canada and Russia, among others.

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