What is in this article?:
- USDA releases 2013/14 outlook for grains, oilseeds
- Futures, cash and farm-level prices
- Other factors involved
- World wheat production
- Ethanol production
- Domestic soybean use
• Prospects for high net returns and crop insurance revenue coverage support combined 2013 area for wheat, corn, and soybeans very near last year’s 30-year high.
Futures, cash and farm-level prices
Futures, cash, and farm-level prices for wheat, corn, and soybeans are all expected to fall in 2013/14 as record U.S. corn and soybean production push global supplies to new records. Strong global demand for grains and oilseeds, however, keep prices well above those of a decade ago.
This paper incorporates contributions by analysts from the World Agricultural Outlook Board, the Economic Research Service, the Farm Service Agency, and the Foreign Agricultural Service.
The 2013 outlook for U.S. plantings of the major grains and soybeans is driven again this year by a very favorable outlook for producer net returns ahead of planting. Expected returns for corn and soybeans are again historically high reflecting strong new-crop futures and cash forward prices.
New-crop prices for grains and oilseeds remain supported by the very tight domestic supply situations for corn and soybeans in 2012/13. Higher new-crop futures and cash forward prices for soybeans compared with last year at this time and relative to corn support an outlook for expanded soybean area as does a larger Soft Red Winter (SRW) wheat area that may be double cropped.
Favorable new-crop wheat prices last fall during seeding increased plantings of winter wheat. Extreme drought in parts of the Great Plains, however, limited increases with Hard Red Winter (HRW) wheat area down on the year. Together the corn, soybean, and wheat 3-crop planted area is projected at 230.0 million acres, nearly the same as the 230.1 million acres planted in 2012.
Last year’s 3-crop total was the highest since 1982 when wheat area exceeded that for corn and for soybeans. Acres in CRP are also down again for 2013/14 with total enrolled area 9.7 million acres lower than its peak in 2007/08. This past year’s 2.4-million-acre decline in enrollments adds further to available crop land.
Wheat planted area for 2013 is expected up 0.3 million acres to 56.0 million. Winter wheat seeded area at 41.8 million acres is up 0.5 million from last year. The Jan. 11, 2013, Winter Wheat Seedings reported HRW wheat seedings down 0.7 million acres to 29.1 million and SRW wheat seedings up 1.3 million acres to 9.4 million. White Winter (WW) wheat seedings were down slightly at 3.3 million acres. Spring wheat (including durum) plantings are expected to decline with more favorable returns for corn and soybeans, particularly in North Dakota.
Corn plantings for 2013 are projected at 96.5 million acres, down 0.7 million acres from last year’s 75- year high. Strong new-crop prices in both the futures and cash forward markets support a highly favorable net returns outlook, much as it did last year at this time.
New-crop futures during the first half of February averaged $5.70 per bushel and bids for fall delivery at Central Illinois elevators during the same period averaged $5.45 per bushel. These prices are nearly unchanged from the same period last year and new-crop futures again support a high level of crop insurance revenue coverage.
Last year’s corn plantings also benefitted from an extraordinarily early and favorable spring planting window which reduced prevented plantings sharply from the previous year’s unusually large prevented area. A return to more normal spring weather is expected to reduce this year’s planting opportunities for corn and leave more land available for soybeans.
Soybean planted area is projected at 77.5 million acres, up 0.3 million from 2012 and up 3.6 million from last year’s planting intentions. New-crop soybean futures prices and current forward pricing opportunities are somewhat higher than last year at this time both in level and relative to corn.
Several other factors also are expected to result in an increase in soybean plantings compared with last year’s intentions. Favorable soybean prices combined with higher winter wheat seedings in traditional double- crop states compared with 2012 will increase the potential for double cropping, especially in the SRW wheat areas of the eastern Corn Belt and the Delta states.
Hot, dry conditions during the planting season last year likely limited some double-cropping. With a return to more normal June weather in 2013, an increase is also expected in the proportion of winter wheat acres that are double cropped.