Corn and soybean harvests were running behind the average pace, and the 2017 crops were less than 40% harvested as of Oct. 8, but some in the market already are beginning to turn their attention to planting prospects for next year, which may see some major shifts in production.
The University of Missouri’s Food & Agricultural Policy Research Institute (FAPRI) recently adjusted its baseline for U.S. agricultural markets, showing expectations for more corn acreage and less soybean acreage in 2018 compared with 2017. The changes were based on the U.S. Department of Agriculture’s August production and price forecasts. Subsequent U.S.D.A. reports, including those released Oct. 12, estimated both corn and soybean production above the August levels, thus supporting FAPRI’s earlier projections.
FAPRI projected 2018 corn planted area at 93.2 million acres, up 2.3 million acres from 2017, soybean planted area at 86 million acres, down 2.5 million acres from 2017, soybean planted area at 86 million acres, down 2.5 million acres, and all-wheat planted area at 47.5 million acres, up 1.8 million acres.
Last week the U.S.D.A. estimated 2017 corn production at 14,280 million bus, up 1% from both the September and August estimates, down 6% from 2016 record outturn of 15,148 million bus and still the second highest on record. Soybean production was forecast at a record 4,431 million bus, down slightly from September, up 1% from August and up 3% from 4,296 million bus in 2016, the previous record. All-wheat production on Sept. 29 was estimated at 1,741 million bus, down 25% from 2,309 million bus in 2016.
“Reduced U.S. (2017 corn) production results in a small increase in corn prices, to $3.48 per bu for the 2017-18 marketing year,” FAPRI said. “Continued large world grain production and stocks limit the price recovery. Projected prices remain below $3.80 per bu through 2022-23.
“The projected record 2017 U.S. soybean crop puts further downward pressure on soybean prices. Projected prices drop to $9.07 per bu for the 2017-18 marketing year. The result is lower expected soybean acreage in 2018, which allows a modest increase in prices.
“The smaller 2017 U.S. wheat crop contributes to higher wheat prices, but global supplies remain large and projected prices remain below $5 per bu for the next three marketing years.”
The average price of corn paid to farmers in 2017-18 was forecast by the U.S.D.A. last week to range between $2.80 and $3.60 a bu, unchanged from September and compared with the initial forecast of $2.90 to $3.70 in August and $3.36 in 2016-17, which ended Aug. 31. The average soybean price was forecast to range between $8.35 and $10.05 a bu, unchanged from September and compared with an initial forecast of $8.45 to $10.15 in August and $9.47 in 2016-17, which also ended Aug. 31. The average all-wheat price in 2017-18 (which began June 1) was forecast to range between $4.40 and $4.80 a bu compared with $3.89 in 2016-17.
FAPRI noted that futures prices were more supportive for corn a few weeks ago than for soybeans compared with price relationships in the spring when 2017 planting decisions were finalized. Fertilizer prices also are lower now than a year ago. Due to crop rotation patterns, farmers often have to make planting decisions and fertilizer purchases in the fall, which currently tends to slightly favor corn.
But first, farmers have to get their 2017 crops harvested, and to date that has been a struggle. The corn crop in the 18 major states was 22% harvested as of Oct. 8, well behind 33% a year ago and 37% as the 2012-16 average for the date, the U.S.D.A. said in its Oct. 9 weekly Crop Progress report. The largest lags were in South Dakota at 6% harvested (29% average), Minnesota at 4% (26%) and top-producing Iowa at 8% (28%).
Soybeans in the 18 major states were an aggregate 36% harvested as of Oct. 8, behind 41% a year ago and 43% as the 2012-16 average for the date, the U.S.D.A. said. While combining was ahead of the average pace in eastern Corn Belt states, progress was well behind average in top-producing Iowa at 26% (45% average), Minnesota at 22% (63%), North Dakota at 44% (64%), South Dakota at 22% (59%) and Nebraska at 23% (46%).
For corn the delay was a combination of later-maturing crops in some areas and recent wet weather, while for soybeans weather was the primary reason for slow progress as maturity has been on par if not slightly ahead of average.
FAPRI noted that much can change in the market before final 2018 planting decisions are made next spring, which could alter farmers’ plans.