Gloomy Crop Prices Forecasted by Economist Joe Glauber at USDA Outlook Forum
By Farms.com Team
At the opening session of today's USDA Outlook Forum in Arlington, Va., Joe Glauber, USDA's chief economist, presented the lower grain price forecasts for 2014.
In 2014, the US corn planting will drop by more than 3m acres, although this will be insufficient to prevent prices of the grain falling to five-year lows – as will values of cotton, soybeans and wheat.
The US Department of Agriculture, in its first formal forecasts for crop acreage for the 2014 harvest, pegged corn production at 92.0m acres. While well down from the 95.4m acres in 2013, it still represents a historically high figure, the fourth largest since World War II, putting the potential for a record production.
"A return to normal yields for spring-planted crops could see soybean and corn set new production records," USDA chief economist Joseph Glauber said.
The boost to supplies looks set to depress US corn prices to an average of $3.90 a bushel in 2014-15, down $0.60 and the lowest since 2009-10.
Record Soybean Acres To Be Planted.
For soybeans, plantings should set an all-time high of 79.5m acres, Mr Glauber told the USDA's Outlook conference. That represents a rise of 3.0m acres in plantings year on year, and is 1.5m acres more than the USDA proposed in its long-term Baseline forecasts which were released last week but drawn from calculations made late last year.
"The stronger soybean prices relative to corn should favour soybean plantings this year," Mr Glauber said. "The soybean-to-corn futures price ratio for fall 2014 delivery has been at 2.5, which favours soybeans."
The USDA forecast soybean prices down 24% to an average of $9.65 for 2014-15, again a five-year low.
Wheat Price Outlook
For wheat, the USDA forecast plantings of 55.5m acres, down 700,000 acres year on year.
Mr Glauber highlighted the 1.1m-acre drop in seedings soft red winter wheat, grown largely in the Midwest, which has already been revealed.
Although spring wheat plantings are, at 13.6m acres, expected to increase, assuming better sowing weather that the particularly wet conditions last year, that represents a 500,000-acre increase, offsetting only part of the drop in winter wheat.
Nonetheless, wheat prices are seen falling 22% to $5.30 a bushel.
