Trade, large global inventory and slowing economic growth in key countries indicate U.S. corn and soybean farmers will continue to be challenged in 2019. Positive trade policy could help reduce losses in export markets, but overall prices will be similar to or slightly down from 2018 levels.
Because of uncertainty in the soybean market, corn will likely see a sharp increase in planted acres this year. This means more saturation, greater ending stocks and weaker prices for the golden grain, according to research from the University of Illinois Farm Economics Summit.
Illinois economists found 2018 corn averaged about $3.70 and expect a $3.65 average for the 2019 season—if production and trade issues develop as expected.
“An estimate of 91.8 million acres with a trend yield near 174.2 bu. results in a 2019 crop near 14.7 billion bu.,” the report said. “A projected total use of 14.76 billion bu. would result in the 2019-20 marketing year ending stocks near 1.76 billion bu., on par with 2018-19 projections.”
Increased ethanol and feed use provided price support for corn this past year. The 2018 and 2019 season both show a reduction in corn ending stocks.
You undoubtedly know that 2018 brought extreme challenges to soybean producers. Trade disputes made the once-promising crop experience a sharp price decrease to a year-average of $8.50 per bu. If no trade deal emerges, Illinois pegs soybeans at $8.40 for the 2019-20 marketing year.
“Soybean crush looks to continue strength but cannot make up for the drastic reduction in exports,” the report said. Even with a decrease in acres to 85.7 million, economists expect a surplus of bushels in 2019. Estimated 2018-19 ending stocks are near 930 million bu. from lower exports.
Wheat is one bright spot for row crop farmers. The average price for 2019 is expected to be near $5.10 per bu. World wheat production declined, U.S. wheat stocks lowered to 949.3 million bu. from 1.18 billion bu. in 2016-27 and wheat acres are forecasted to increase for the third year to 51 million acres in 2019.