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Soybeans Shine, but Corn Still Glowing

February 22, 2014
By: Sara Schafer, Farm Journal Media Business and Crops Editor
USDA corn soybean fields
  

Even with soybeans are stealing the spotlight, corn continues to show advantageous prices.

With below-zero temperatures forecast for much of the Plains and Midwest, planting still seems a long ways away. Yet, spring planting was one of the key topics at USDA’s Agricultural Outlook Forum, which was held Feb. 20-21 in Washington D.C.

USDA Chief Economist Joseph Glauber presented this acreage forecast on behalf of USDA:

  • 2014 U.S. corn plantings of 92 million acres, compared with 95.4 million acres last year.
  • 2014 U.S. soybean plantings of 79.5 million acres, compared with 76.5 million last year.
  • 2014 U.S. wheat sowings of 55.5 million acres, compared with 56.2 million last year.
  • 2014 U.S. plantings for all cotton of 11.5 million acres, compared with 10.4 million last year.

 

Price projections are down across the board. The forecast shows corn prices falling from $4.50 in 2013-14 to $3.90 for this marketing year. Soybean prices are expected to drop from $12.70 in 2013-14 to $9.65, while wheat prices will decline from $6.80 to $5.30 this marketing year. Cotton prices will not be spared, falling to a projected 68 cents in 2014-15 from this year’s estimated 76 cents per pound.

Jerry Gulke, president of The Gulke Group, says he thinks USDA’s acreage estimates are on target. "We knew it would obviously be higher in beans," he says.

Overall, USDA is expecting these lower prices to translate into lower plantings for the eight major row crops this year. Glauber expects crop mixes to change, especially on Midwest farms. "Stronger soybean prices relative to corn should support soybean plantings this year," he says.

With all of these actives at play, Gulke thinks some major surprises may be in store in the March 31 Prospective Plantings report.

Hear Gulke's full audio analysis:

Meanwhile, corn prices have remained favorable. "We are really coming out of the harvest lows," Gulke says. The good thing about $4 or $4.50 corn is that it looks relatively cheap, compared the recent record highs. "There’s no shortage when corn is $7 or $8, but at these levels end users want it," he says.

Exports remain high. USDA’s estimate on Thursday put agricultural exports during fiscal 2014 at a record $142.6 billion, which is up more than $5 billion from August.

All Eyes on the Spring Forecast and USDA’s Next Report

With March only a week away, the spring weather forecast is garnering attention. Temperatures across the U.S. Midwest and Northeast will plummet through next week and the cold will linger through the start of March, said Matt Rogers, president of Commodities Weather Group LLC.

Gulke, who was in Pennsylvania this week, says when he flew across the Great Lakes all you could see was ice. "I’ve heard nearly 90% of the Great Lakes area is frozen," he says. "That will take a long time to thaw."

"It looks like the odds are there to have a cool and wet spring," he says. "You’d have to be pretty optimistic to expect we’ll have an average or good crop all over. We’re starting to hear those predictions come out of the woodwork."

March will be a big USDA report month. On March 10, USDA will release its monthly Crop Production and World Agricultural Supply and Demand Estimates reports. Gulke says USDA will factor in their forecasts from the Agricultural Outlook Forum.

On March 31, USDA will release its Prospective Planting and Grain Stocks reports. All reports will be released at 11 a.m. CDT. Stay tuned to AgWeb.com for analysis ahead and immediately following the reports.

 

Have a question for Jerry? Contact him at 815-721-4705 or jerry@gulkegroup.com.


For More Information
Read more coverage from USDA's Agricultural Outlook Forum:

 

USDA Projects Big Increase In Corn Ending Stocks
The annual grain outlook calls for bigger crops and lower farm prices.

Corn Futures Drop on Outlook for Bigger Stockpiles; Wheat Falls
Corn futures for May delivery dropped 0.3% to $4.6075 a bu. at 11:28 a.m. on the Chicago Board of Trade.

What Makes China Tick?
USDA officials provide a revealing glimpse inside U.S. agriculture’s biggest foreign customer.

Power Hour: Farm Income to Drop 26.6% This Year
USDA’s forecast for farm income shows it dropping to $95.8 in 2014, the lowest level since 2010, underscoring the need for farmers to carefully cut expenses.

U.S. Continues to Lose Farmers and Farm Acreage
Vilsack presents his top take-aways from the new farm census.

USDA Sees Falling Prices and Shift in Acres
Less corn acres and lower prices headline USDA Chief Economist Joe Glauber's annual outlook for U.S. agriculture.

Tight Stocks Could Lead to Price Spikes in 2014
Otherwise, USDA is calling for lower prices in most row crops this year.

See current market prices in AgWeb's Market Center


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