USDA Projects 2019 Domestic Production at Ag Outlook Forum

(ARLINGTON, VA) Among the three major crops grown in the United States, this year’s outlook from USDA represents a dramatic change from prior years because of China’s imposition of tariffs on U.S. soybeans. Relative to a year ago, soybean cash prices have declined, with pronounced weakness in the Northern Plains and Western Corn Belt, two areas that are particularly exposed to variations in the export market. In contrast, soybean cash prices have shown relative strength in the Eastern Corn Belt. Offsetting a forecast decline in soybean acres are increases in spring wheat, corn, and cotton acres. The total plantings for corn, soybeans, and wheat is expected to be 224 million acres, down 2.1 million from final plantings in 2018. This largely reflects expectations of a return to a more typical level of prevented plantings. Season-average corn prices are expected to reach $3.65 per bushel, up 5 cents from the previous forecast. Soybean prices are expected to rise to $8.80 per bushel while wheat prices are up to $5.20. As for cotton, USDA is projecting 14.25 million acres planted with harvested acreage of about 12.9 million acres, equal to a 23 percent increase from 2018. With a national average yield of 835 pounds per harvested acre, based on regional average yields, the 2019 U.S. cotton crop is projected at 22.5 million bales, 22 percent above last year. Larger crops are anticipated for each region of the Cotton Belt, with the largest increase in the Southwest, where 2019 cotton production could surpass 2017’s record. With identical carry-in stocks of 4.3 million bales for 2019/20, the total supply—26.8 million bales—would rise more than 4 million bales from 2018/19 and reach its highest since 2007/08. Increased supplies are expected to pressure cotton prices this season and the average price could fall within the range of 62-72 cents per pound.