Milling & Baking News - September 10, 2019 - 20

Data

Northern Plains spring wheat
growers can't catch a break
KANSAS CITY - It seemed northern Plains spring wheat growers
can't catch a break. Combining was
expected to remain slow going because of inclement weather. Much
of the region received two inches
or more of rain during Labor Day
weekend leaving fields too wet to
harvest at midweek. Combining resumed Sept. 5 as drier weather took
hold, but more rain and cooler temperatures were in forecasts for the
weekend and early this week.
During a normal harvest, spring
wheat producers are able to take
off about 30% of the crop in a week,
but they haven't had a window that
wide this season, Jim Peterson, policy and marketing director, North Dakota Wheat Commission told Milling
& Baking News.
The U.S. Department of Agriculture indicated the spring wheat harvest in the six principal producing
states was 55% completed by Sept. 1

compared with 38% a week earlier
and 78% as the recent five-year average progress for the date. The North
Dakota crop was 52% harvested
compared with 34% a week earlier
and 73% as the five-year average.
The harvest began late because
of weather-delayed spring planting
and slow crop maturation, and rain
has interrupted combining relentlessly as the crop was turning ripe.
Harvesttime rain not only was
slowing combining but also was taking a toll on crop quality in certain
areas, particularly in pockets of the
central and eastern portions of the
spring wheat belt. Some elevators
in those areas indicated there were
fields where wheat falling number
fell below the market threshold
of 300 seconds with certain elevators indicating wheat offered them
often had falling number of 270 to
280 seconds.
Farther west, wheat exhibited no

FAPRI forecasts lower prices in
grain and soybean markets
COLUMBIA, MO. - The Food and
Agricultural Policy Research Institute
(FAPRI) at the University of Missouri,
in its five-year Baseline Update for
U.S. Agricultural Markets released
Aug. 28, forecast lower prices for
wheat, corn and soybeans in 201920 and 2020-21 as trade issues and
ample supplies take their toll on U.S.
agriculture.
"Excessive spring rains, trade disputes and African swine fever (A.S.F.)
have disrupted agricultural markets,"
FAPRI said. "In spite of reduced 2019
U.S. corn and soybean production
prospects, prices for many commodities are under downward pressure
because of the many factors that have
weakened demand."
The current outlook was prepared
the week of Aug. 19, using the U.S.
Department of Agriculture's August
Crop Production data. FAPRI noted
several assumptions and uncertainties
in updating the outlook from April.
China's 25% retaliatory tariff on U.S.
soybeans and other farm products
were assumed to remain in place, and
the economy was assumed to evolve
with slower economic growth in 2019
and 2020 but no recession.
20 / September 10, 2019

Milling & Baking News

"Assuming a return to more normal weather conditions in 2020, projected corn and soybean production
rebounds," FAPRI said.
Corn production in 2020 was forecast at 14,979 million bus, up 8% from
13,901 million bus as the U.S.D.A.'s
August forecast for 2019. Soybean
outturn in 2020 was projected at 4,154 million
bus, up 13% from 3,680
million bus currently
forecast for 2019, which
is down 19% from 2018.
Soybean prices are expected to be pressured by reduced
demand from China due to A.S.F. and
the ongoing trade war.
Soybean prices paid to farmers
were forecast at $7.94 per bu in 202021, compared with $8.43 per bu in
2019-20, $8.50 per bu in 2018-19 and
$9.33 per bu in 2017-18. Prices were
forecast to recover to $8.20 per bu in
2021-22 and climb to $8.58 per bu by
2024-25.
"As with soybeans, projected U.S.
corn prices do not increase in 2019-20,
even though estimated production is
down by half a billion bus from the
previous year," FAPRI said. "Weak

such falling number or color problems to date.
Elevators have gone to a cash-only
program for harvest wheat after earlier having offered a deferred pricing
option. Producers were frustrated
with low prices with some elevators
posting bids of about $3.65 a bu for
14%-protein wheat. This was near
the loan price, and near the levels
where loan deficiency payments may
come into play, Mr. Peterson said.
The Trump administration's Market Facilitation Payments compensating producers for lost sales to
China because of the tariff war were
helpful in view of country prices of
hard red spring wheat at the lowest
levels in about three years.
Producers who sold wheat ahead
at higher levels were happy they had
done so, but cash sales were said
to be drying up at the current low
prices. Those producers able to store
their new crop seemed inclined to do
so in the hope prices may escalate
later in the crop year.
On a positive note, most harvest wheat
was averaging over 14% in protein. MBN
export sales and stagnant ethanol use
are contributing factors."
Corn prices were projected at $3.39
per bu in 2020-21, compared with
$3.59 per bu in 2019-20 and $3.60 per
bu in 2018-19. Corn prices were projected to increase gradually beginning in 2021-22.
Soybean oil prices in 2019-20 were
projected at 30.61c per lb, up 9% from
28c forecast as the average for the current year. As with soybean meal, the
average price was projected to fall further in
2020-21 before recovering in 2021-22.
All wheat production
was projected at 1,874
million bus in 2020,
down 5% from 1,980 million bus currently estimated by the U.S.D.A. for
2019. Production was projected to rebound modestly to 1,990 million bus
by 2024.
"Wheat prices average about $5 per
bu over the next five years, given large
global supplies and demand-side
competition with corn," FAPRI said.
The average farm price of wheat
was forecast at $4.92 per bu in 202021 compared with $5 per bu in 201920 and $5.16 per bu in 2018-19. After
slipping to $4.91 per bu in 2021-22,
wheat prices were forecast to recover
modestly to $5.15 per bu by 2024-25. MBN
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Milling & Baking News - September 10, 2019

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