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NW Indiana | I think many will agree that corn and soybean yields are likely to come down a bit more, but to what extent IDK. Lets take a look at what the 2019 balance sheet is likely to look at assuming yields don't change. I am going to use the same total acreage for the big 3 even though I think it is most certainly likely to drop.
Wheat- lets assume planted acreage shakes out the same as 2018 do to planting problems but intentions overall were likely higher so lets call it a wash. Sorry but I'm not breaking down each class.
With 48 million acres planted and a yield of 48 would be a total production of 1920 and demand should be somewhere around 2150. Looks like that would equal a decline of 230 million off the 2018 carryout so would put it down to 719. Stocks to use of 33% but down significantly from recent years.
Corn- lets give corn 7 million more acres. With the usda trend yield likely to be pushing 176 that would be a total production of around 15,544. With current demand at 15,080 lets assume carryout grows by 450 million to 2186. That is a stocks to use ratio of 14%. That is lower than 2016 and 2017. I will add I think this years carryout goes down another 100-150 million. I also think it is unlikely we plant 96 million acres with everything factored but hey lets start with a hypothesis and work from there.
Soybeans- lets take them down the 7 million corn gained. With usda trend likely around 50 that would be a total production of around 4050. With current demand showing 4107 that would reduce carryout down to just under 900 million. That is a stocks to use ratio of 22%.
Overall my personal guess is the big 3 lose 2-3 million acres. I also think yields come down in corn 1-2 bushel and beans another half bushel. I think corn demand is understated. I personally think wheat acres will be up. So play with the numbers however you wish and decide where your risks are. | |
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Lets take a look at the fundamentals of the big 3 going forward
