outlook: grains and oilseeds - usda...8% 10% 12% 14% 16% 18% 20% 2009/2010 2015/2016 2021/2022f...

Office of the Chief EconomistWorld Agricultural Outlook Board

2021 AOF

Outlook:Grains and Oilseeds

Justin ChoeWorld Agricultural Outlook Board, OCE, USDA


2021 AOF

Outline

• Introduction• Factors Shaping Forecast• Outlook

• Soybean• Corn• Wheat

• Closing remarks/Summary


2021 AOF

Introduction


2021 AOF

Timeline for 2021/22 Forecasts

U.S. Agricultural Projections

(early release)

2020/21 Production Estimates for Corn + Soybeans, 2021/22

Winter Wheat Seedings

Agricultural Outlook Forum,

U.S. Agricultural Projections

Prospective Plantings

Initial forecast for 2021/22, Crop

Production Forecast (Winter Wheat)

Acreage report NASS Crop Production Survey (AYS) for Corn,

Soybeans, & Cotton

Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 Apr-21 May-21 Jun-21 Jul-21 Aug-21


2021 AOF

FactorsShapingForecast


2021 AOF

Assumptions: Weather & Policy

• Trend yields used, assuming normal planting progress and growing conditions

• Current policies projected to be “in-place” unless change publicly announced

• No changes to overarching assumptions and approach


2021 AOF

Macroeconomic and Economy-wide Assumptions

• Substantial rebound in U.S. and global economic growth

• COVID-19 is more under control, “normal” business activity resumes

• Despite recovery, global real GDP levels are forecast below pre-COVID levels

-8.0

-4.0

0.0

4.0

8.0

12.0

2018 2019 2020e 2021f 2022f

World United States EMDEs excluding China China

Source: The World Bank, Global Economic Prospects (Jan 2021)


2021 AOF

World production of corn, soy, and wheat continues to grow

Source: PSD Database, USDA/FAS

400

420

440

460

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560

0

500

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1990/1991 1995/1996 2000/2001 2005/2006 2010/2011 2015/2016 2020/2021(Feb)

Milli

on H

ecta

res

Milli

on T

ons

Foreign Corn+Soy+Wheat U.S. Corn+Soy+Wheat 3-crop Global Acreage


2021 AOF

Feed use* of grains and oilseeds rising, as well as U.S. exports

60708090100110120130140150160

0

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1990/1991 1995/1996 2000/2001 2005/2006 2010/2011 2015/2016 2020/2021(Feb)

Expo

rts, M

illito

n To

ns

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sum

ptio

n, M

illon

Tons

Corn & Wheat Feed & Residual + Soybean Crush, Foreign Corn & Wheat Feed & Residual + Soybean Crush, U.S.US Exports of Corn, Soybeans, and Wheat

Source: PSD Database, USDA/FAS


2021 AOF

China’s grain imports bodes well for U.S. grain exports

2013

2014

2015 2016

201720182019

2020

0%

5%

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15%

20%

25%

30%

0% 10% 20% 30% 40%

U.S

. Cor

n Po

rtion

U.S. Sorghum Portion

China CY imports of feed grains/feedstuffs**Size of bubble represents total tonnage

China MY import estimates of key grains*Size of bubble represents total tonnage

2020/2021 (Feb)

2019/20202018/2019

2017/2018

2016/2017

2015/2016

2014/2015

0%

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Cor

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of K

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rain

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Sorghum Portion of Key Grain Imports* Includes corn, barley, sorghum, wheat, and soybeans. Source: PSD/FAS ** Includes corn, barley, sorghum, DDGS, and field peas. Source: TDM


2021 AOF

Foreign stocks of corn and soy are tightening

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2009/2010 2020/2021 (Feb)

Stoc

ks to

Use

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io

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ks, M

illion

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s

Foreign (sans China) Ending Stocks, CornStocks to Use Ratio

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50%

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2009/2010 2020/2021 (Feb)

Stoc

ks to

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ks, M

illion

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Foreign (sans China) Ending Stocks, SoybeansStocks to Use Ratio Source: PSD Database, USDA/FAS


2021 AOF

U.S. Corn and Soy markets tightening

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2009/2010 2015/2016 2021/2022F

Billio

n Bu

shel

s

Stoc

ks to

Use

Rat

io

U.S. Corn Stocks U.S. Soybean Stocks Corn Stocks to Use Ratio Soybean Stocks to Use RatioSource: PSD Database, AOF


2021 AOF

U.S. Wheat market tightening as well

Source: PSD Database, AOF

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2009/2010 2012/2013 2015/2016 2018/2019 2021/2022F

Stoc

ks to

Use

Rat

io

Milli

on b

ushe

ls

Ending Stocks, U.S. Wheat Stocks to Use Ratio


2021 AOF

Higher prices make planting decisions interesting

Source: CME


2021 AOF

Profitable for foreign competition as well

0

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01/02/2015 01/02/2018 01/02/2021

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/ton

Central IL, SoybeansBrazil Composite Price Index, Paranagua, adjusted

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01/02/2015 01/02/2018 01/02/2021

BRL/

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USD

/ton

Central IL, CornBrazil Composite Price Index, in BRL, adjusted

Source: CME, CEPEA


2021 AOF

Futures Soy-Corn Price ratios suggest strong rebound in soy acreage

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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Milli

on A

cres

Soyb

ean

-Cor

n Pr

ice

Rat

io

Soybeans Corn Soy-Corn Price Ratio (Left)


2021 AOF

Soy-Corn Price Ratio in the futures market

Source: CME


2021 AOF

Interior Cash Price ratios are falling

Source: CME


2021 AOF

Where will 3-crop Prevent Planting land?

5-year Avg

10-year average

5-year Olympic Average

5-year average (13-18)0

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2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

Mill

ion

Acre

s

Corn Soybeans Wheat

Source: FSA


2021 AOF

Wheat, Corn, and Soybean Planted Acreage for 2021/22

45

92

90

0

50

100

150

200

250

2014 2015 2016 2017 2018 2019 2020 2021F

Milli

on A

cres

Wheat Corn Soybeans


2021 AOF

Outlook: Corn

21

Outlook:Soybeans


2021 AOF

Intentions vs. Planted Area: Soybeans

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2012 2013 2014 2015 2016 2017 2018 2019 2020 2021

USD

/bus

hel

Milli

on A

cres

Soybeans, planted Season Average Price Prospective Plantings (March)


2021 AOF

China import demand ramping up

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1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11

2016 2017 2018 2019 2020

Milli

on T

ons

United States Brazil Argentina OtherSource: TDM


2021 AOF

U.S. is price competitive, but is there enough?

Source: IGC


2021 AOF

U.S. Soybean Balance Sheet for 2021/22

In thousands Domestic units

2020/21 (Feb) 2021/22 Diff.

Area planted (mil. acres) 83.1 90 +6.9Yield (bu/acre) 50.2 50.8 +0.6Production (mil. Bu) 4,135 4,525 +390Imports 35 35 -Exports 2,250 2,200 -50Crush 2,200 2,210 +10Seed and Residual 125 124 -1Ending Stocks 120 145 +25Farm Average Price ($/bu) $11.15 $11.25 +$0.10

• Soybean acreage boosted up 6.9 mil. acres to 90 mil

• Production up 390, but with tight stocks supply is down

• Domestic use is up slightly, with lower exports

• Stocks are up slightly from historically low S/U

• Prices up slightly


2021 AOF

Outlook: Corn

26

Outlook:Corn


2021 AOF

Intentions vs. Planted Area: Corn

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2012 2017

USD

per

bus

hel

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ons

Acre

s

Corn, planted Season Average Price Prospective Plantings (March)


2021 AOF

Corn prices supported by strong foreign demand

050

100150200250300350400450500

9/3/2019 5/3/2020 1/3/2021

USD

/ton

Central IL CashGuangzhouBrazil (Composite Price)

Source: CME, CNGOIC


2021 AOF

U.S. is price competitive with ample supplies

Source: IGC


2021 AOF

Will driving return to pre-COVID-19 levels?

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10/1/2014 10/1/2016 10/1/2018 10/1/2020 10/1/2022

Billio

n bu

shel

s

Billio

n G

allo

ns

Motor Gasoline Product Supplied, Monthly, billion gallons (EIA STEO) Corn used for ethanol production, billion bushels (NASS)


2021 AOF

U.S. Corn Balance Sheet for 2021/22

In thousands Domestic Units2020/21 (Feb) 2021/22 Diff.

Area planted (mil. acres) 90.8 92 +1.2Yield (bu/acre) 172.0 179.5 +7.5Production (mil. bu) 14,182 15,150 +968MY Imports 25 25 -MY Exports 2,600 2,650 +50Feed & Residual 5,650 5,850 +200Food, Seed, Industrial 6,375 6,625 +250

Ending Stocks 1,502 1,552 +50Average Farm Price $4.30 $4.20 -0.10

• Acres up to 92 million, increasing production by 7%

• Domestic usage up on rebound in FSI use and feed

• Exports up on strong prospects to China

• Stocks up slightly• Prices are lower on returning

global competition


2021 AOF

Strong demand from China driving up sorghum prices

Source: IGC


2021 AOF

U.S. Sorghum Balance Sheet for 2021/22

• Acreage up on strong profitability

• Projected exports to China to limit domestic use

• Despite larger production, stocks slightly lower

• Prices slightly lower

Domestic Units2020/21 (Feb) 2021/22 Diff.

Area planted (mil. acres) 5.9 7.2 +1.3Yield (bu/acre) 73.2 69 -4.2Production (mil. bu) 373 441 +68MY Imports 0 0 0MY Exports 295 365 +70Feed & Residual 70 70 -Food, Seed, Industrial 10 10 -Ending Stocks 28 24 -4Average Farm Price $4.80 $4.70 -$0.10


2021 AOF

Outlook: Corn

34

Outlook:Wheat


2021 AOF

35

Source: NASS


2021 AOF

Intentions vs. Planted Area: Wheat

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/bus

hel

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on A

cres

Winter Wheat Spring (excl. Durum) DurumSeason Average Price, All Wheat Spring Wheat, Intentions Durum, Intentions


2021 AOF

U.S. Wheat Balance Sheet for 2021/22

• Wheat acreage up slightly, but production is virtually flat

• Exports down, but Feed/residual down up

• Ending stocks lower on tighter carry-in

• S/U ratio falls marginally

Domestic Units

2020/21 (Feb) 2021/22 Diff.Area planted (mil. acres) 44.3 45.0 +0.7

Yield (bu/acre) 49.7 49.1 -0.6

Production (mil. bu) 1,826 1,827 +1

MY Imports 120 130 +10

MY Exports 985 925 -60

Feed & Residual 125 140 +15

Food & Seed 1,028 1,030 +2

Ending Stocks 836 698 -138

Average Farm Price $5.00 $5.50 +$0.50


2021 AOF

ConcludingRemarks


2021 AOF

For U.S. Wheat, Soybeans, and Corn in 2021/22…

• Total acreage projected to reach 227 million acres, highest since 2016 • Soybeans + corn acreage to reach record 182 million acres, eclipsing 2017• Wheat acreage rebounds slightly to 45 million acres

• Disappearance of wheat, soybeans, and corn to increase slightly• Domestic cons. rebounds on increased feed and industrial use

• Feed (corn/wheat) and crush (soybeans) up• Motor gas/ethanol and bio/renewable diesel support higher use

• Exports are flat y/o/y, continuing banner year despite increased competition• Combined stocks are lower slightly, driven by wheat and offset by corn & soy• Soy and wheat prices are projected higher, while corn is slightly lower


2021 AOF

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outlook: grains and oilseeds - usda...8% 10% 12% 14% 16% 18% 20% 2009/2010 2015/2016 2021/2022f...

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