Agri-economics

David Sparks Ph.D.

This month, USDA estimates 2020/21 corn exports to be a record 2.7 billion bushels and expects tight supplies.

“For new crop corn, USDA projects ending stocks will rise about 250 million bushels to 1.5 billion. That’s quite a bit more than most traders were anticipating and that’s helped to drive some of this pullback in markets that we’ve been seeing. For new crop beans, USDA projects soybean ending stock will rise to 140 million bushels. The old crop bean stocks to use ratio came in at 2.6 percent and the new crop is projected at 3.2 percent,” said Nepveux.

Crops and demand will be up, if the weather cooperates this could be a banner Ag year.

Mike Zuzolo of Global Commodity Analytics: “USDA’s numbers suggest, and I think rightfully so, a real shift for livestock feeders away from corn and toward the wheat to the point that it really does disrupt the domestic usage of the corn. So, it’s not like we’re going to have excessive supplies because we’re going to pick up extra export business, I think. But if the wheat would happen to have any yield issues in the soft red or the hard red crop, and if we continue to have issues on the weather front in the Northern Plains for the spring wheat crop and part of the hard red crop that’s grown in the South Dakota region, then the wheat could become fundamental support to the corn instead of a liability. Then, suddenly, the corn would have to pick up the extra feed demand that was supposed to go to the wheat. This is something to watch in the next 30 days because that wheat harvest is drawing close.”