From the University of Illinois' FarmDoc Daily, December 28:
This is a presentation summary from the 2017
Illinois Farm Economics Summit (IFES) which occurred December 18-22,
2017. A complete collection of presentations including PowerPoint Slides
(PPT) and printable summaries (PDF) are available here.
CROPS
Crop prices will remain below the high levels seen in
the early part of this decade due to large global inventories. Global
economic growth continues to build on the momentum seen over the last
year. Growth in China and emerging market in Asia is projected to remain
strong throughout 2018. The prospects of improved growth support
commodity demand, but the significant changes to trade policy could
mitigate some of this demand growth in export markets. Lower prices are
expected to continue in 2018 barring a shortfall in one of the major
production regions. The following price outlook analysis assumes a good
2018 growing season.
Corn prices continue to struggle with large
crops and five consecutive years of growth in ending stocks. Domestic
corn demand continues to see moderate growth in corn used for ethanol
which has been supported by record levels of ethanol exports. Growth in
livestock production and low corn prices provide support for increased
feed usage during the 2017-18 marketing year. The potential for greater
than 5.5 billion bushels in feed and residual use would be the largest
amount since 2007-08. Corn exports currently lag the pace of last
marketing year's 2.29 billion bushels and are projected at 1.95 billion
bushels by the end of the current year. Planted acreage of corn is
expected to increase slightly in 2018 to 90.8 million acres. Assuming a
trend yield near 172.3 bushels would result in a 2018 crop near 14.4
billion bushels. A projected total use of 14.5 billion bushels would
result in the 2018-19 marketing year ending stocks near 2.44 billion
bushels, a slight decrease from 2017-18 projections. Prices are expected
to average near $3.30 during the current year and near $3.40 during the
2018-19 marketing year if production develops as expected.
Soybean prices remain strong relative to corn
and wheat prices. U.S. soybean ending stocks continue a five-year
pattern of growth with 2016-17 ending stocks ending at 301 million
bushels. The lower than initially projected ending stocks benefited from
very strong export numbers driven by continued growth in exports to
China. Soybean exports are projected to exceed 2.2 billion bushels
during this marketing year, up from last marketing year's 2.174 billion
bushels. Expanded soybean acreage and a 49.5 bushel yield for the 2017
crop are expected to increase 2017-18 marketing year ending stocks to
480 million bushels. Planted acreage of soybeans is expected to increase
moderately to 90.6 million acres in 2018 due to the low prices of corn
and wheat and the lower cost of producing soybeans relative to corn. A
yield near 48.5 bushels would result in a 2018 crop about 52 million
bushels smaller than the 2017 crop. With total use projected at 4.32
billion bushels, a further increase in U.S. stocks is expected by the
end of the 2017-18 marketing year. Prices are expected to average near
$9.20 during the current year and near $8.80 during the 2018-19
marketing year if world production develops as expected.
U.S.
wheat acreage is expected to continue
declining. Planted acreage decreased to 46.01 million acres in 2017.
U.S. wheat production decreased by 508 million bushels in 2017 with
average yield down by 6.3 bushels per acre. Soft red winter wheat
production decreased to 202 million acres on 230,000 fewer acres
nationally. Soft red winter wheat production is down 49 percent from
2010-2017 in Illinois. During the same period, wheat acreage in Illinois
declined by 450,000 acres. World wheat production in 2017-18 is
expected to decline slightly from the record levels of 2016-17. Foreign
wheat production is expected to increase for the fifth consecutive year.
U.S. stocks of wheat in all classes are projected to decline to 935
million bushels after hitting 1.18 billion bushels in 2016-17. U.S. soft
red winter wheat ending stocks are expected to grow by 7 million
bushels in 2017-18. The average price received for the 2017 crop is
expected to be near $4.60. The Illinois price at harvest is expected to
be near $4.75....
MORE
