Play Turner’s Take Ag Marketing Podcast Episode 254
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The USDA’s November 2020 WASDE was bullish for corn and soybeans. Stocks are tight for soybeans and getting snug for corn. In the podcast we go over the possibilities of ending stocks for both corn and soybeans and expected price ranges. We also talk about South American weather and how current grain and oilseed prices could influence acres this spring. If you want to know more then make sure you take a listen to this week’s Turner’s Take Podcast
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Nov 2020 WASDE Bullish
The WASDE was bullish for both corn and soybeans. Corn yields decreased to 175.8 bpa and exports increase 350mm. The result was old crop corn ending stocks are now 1.7 billion and the stock/usage ratio is 11.5%. South America weather becomes even more important to make sure global exporters don’t run out of corn this spring.
The USDA reduced soybean yields too but did not touch demand. Yield declined to 50.7 bpa and ending stocks are now 190mm bushels. The stocks/usage is 4.9%. This is tight and soybeans deserve to be over $10 across the board. Below are my tables for both corn and soybeans
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Corn Supply & Demand Scenarios
Below is my corn supply and demand table for old crop and new crop. At 1.7 billion old crop ending stocks and prices above $4 in all contracts, corn acres are likely to stay around the same levels. Below are new crop scenarios for 90, 91, and 92mm acres. Notice that at 90mm acres and a trend line yield of 180.5 the US corn ending stocks stay constant. The US needs to plant at least 90mm acres next year and anything above that build stocks year over year assuming a good crop out of S America (questionable at this point) and a trend line crop in the US in 2021. Prices should stay around or above $4 for at least the next few months. $4.50 corn is possible if South America loses yield during this strong La Nina period.
Soybean Supply & Demand Scenarios
Soybean ending stocks at 190 is tight! Old crop deserves to be over $11 and new crop deserves to be over $10. South American weather is critical during a strong La Nina planting and growing season. Prices need to stay elevated in order for farmers to plan 6 to 9mm more soybean acres this spring. Below is my soybean table scenarios for next year. At 89mm acres and a trend line yield, the US loses another 35mm from ending stocks year-over-year. The US needs at least 90mm and a trend line yield to keep ending stocks at the same level next year. That is assuming S America has an average crop, which is far from a certainty at the moment. Even if the US plants 92mm acres, a 9mm increase, ending stocks just barely get back to 300mm.
Soybeans are bullish and will continue to trade over $10 until the summer. I think “beans in the teens” are possible if the strong La Nina in South America reduces soybean yields and production.
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