May WASDE bullish for corn and soybeans

May 11, 2018

Soybean prices could rise above $10.50 per bushel

By Diego Flammini
Staff Writer
Farms.com

The USDA’s May World Agricultural Supply and Demand Estimates (WASDE) report provided grain farmers with some good news.

USDA projects 2018-19 soybean ending stocks to be about 415 million bushels, down from 530 million bushels in 2017-18. Despite current trade issues with China, farmers could receive between US$10.50 and US$10.60 per bushel, said Moe Agostino, chief commodity strategist with Farms.com.

“China still has to buy big chunks of soybeans from the U.S.,” Agostino told Farms.com yesterday “They typically buy about 46 million metric tons (annually) and they’ll still have to buy about 39 or 40 million metric tons. Argentina’s crop isn’t there and Brazil can’t provide it to them.”

If wet weather in the coming weeks delays soybean planting, growers could receive a price premium, Agostino said.

Corn growers also received good news in May’s WASDE.

Corn ending stocks for 2018-19 is about 1.682 billion bushels, USDA says. That’s down from 2.182 billion bushels in 2017-18.

The USDA’s average yield projection for 2018 is 174 bushels per acre, the WASDE said. If that number drops slightly, corn producers could be rewarded when it’s time to market their crops, Agostino said.

“If the yield drops to even 170 (bu/ac), with 88 million (planted acres), we’ll see US$4.50 or US$5.00 corn,” he said. “But at this point it’s too early to really predict yield and a lot of it will come down to weather.”

President Trump’s recent announcement to allow year-round sales of E15 could also be beneficial for corn producers. But growers may not see the benefits of that ruling for four or five years, Agostino said.

The report proved a little less kind to wheat producers, however.

The USDA projected ending stocks at 955 million bushels, lower than the 1.07 billion bushels in 2017-18. It projected wheat exports at 925 million bushels, up from 910 million in 2017-18.

Despite those favorable numbers, wheat producers may need to wait a little longer to see any kind of price increase.

“The export numbers aren’t enough, and I think some numbers need to get smaller,” Agostino said. “We have to get through (winter wheat) harvest, so farmers might have to wait until July or August to see any price movement.”

Agostino projects wheat prices to be between US$6.25 and $7.50 per bushel.

The next WASDE report will be released on June 12.

For exclusive access to Moe Agostino's live monthly WASDE analysis and other risk management services, sign up for a free eight-week trial.

Video: Evolution of Beef Cattle Farming

The Clear Conversations podcast took to the road for a special episode recorded in Nashville during CattleCon, bringing listeners straight into the heart of the cattle industry. Host Tracy Sellers welcomed rancher Steve Wooten of Beatty Canyon Ranch in Colorado for a wide-ranging discussion that blended family history and sustainability, particularly as it relates to the future of beef production.

Sustainability emerged as a central theme of the conversation, a word that Wooten acknowledges can mean very different things depending on who you ask. For him, sustainability starts with the soil. Healthy soil produces healthy grass, which supports efficient cattle capable of producing year after year with minimal external inputs. It’s an approach that equally considers vegetation, animal efficiency, and long-term profitability.

That philosophy aligned naturally with Wooten’s involvement in the U.S. Roundtable for Sustainable Beef, where he served as a representative for the Colorado Cattlemen’s Association. The roundtable brings together the entire beef supply chain—from producers to retailers—along with universities, NGOs, and allied industries. Its goal is not regulation, Wooten emphasized, but collaboration, shared learning, and continuous improvement.