Crop Insurance Today Second Quarter 2020 - 12

U.S. Prices and Ending Stocks as a % of Total Use 2000-2019

Fig. 6

Corn

Soybeans
$8.00

25%
% Stks to Use

$/Bu.

20%

$7.00
$6.00
$5.00

15%

$15.00

25%

$14.00

$/Bu.
20%

$13.00

% Stks to Use

$12.00
$11.00

15%

$10.00

$4.00
10%

$3.00
$2.00

5%

$9.00

10%

$8.00
$7.00

5%

$6.00

$1.00

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$4.00
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Source: https://www.usda.gov/oce/forum/2020/outlooks/Grains_and_Oilseeds.pdf
World Agricultural Supply and Demand Estimates, February 11, 2020

OILSEEDS
The global oilseeds category is composed of
seven different commodities: copra, cottonseed,
palm kernel, peanuts, rapeseed, soybeans, and
sunflower seed. Soybeans represent just under 60
percent of the total production and is the major
driver in overall market conditions. In 2019 global soybean production declined by six percent.
Combined with decreased production of peanuts
and rapeseed, global oilseed production declined
by three percent from the previous year. Declining production, combined with increasing global
consumption, which is up 1.5 percent from 2018
to over 348 million metric tons, resulted in a reduction in soybean ending stocks of more than 10
percent from 2018. In 2019, the global stocks-touse ratio stood at 28.8 percent, down 3.4 percent
from 2018. Despite overall improvement in stock
levels, market prices remain sluggish as Chinese
imports continue to lag and remain below 2017
Fig. 7

levels. Given recent developments associated with
COVID-19 and lingering issues associated with
the Swine Flu epidemic dampening the demand
for livestock feed, improvements in the Chinese
markets are likely to be slow to materialize.
SOYBEANS
The influence of China's stock-holding policy is less pervasive in the global oilseed markets. Currently China holds 22.73 million metric
tons of soybean stocks, roughly 23 percent of the
world total, and 22 percent of their annual total
use. While Chinese soybean stock levels are more
modest, as a percent of global stocks, than corn
and wheat, they remain significant and more than
double the levels of the early 2000s. It appears China is more comfortable relying on annual imports
to satisfy domestic demand for soybeans and is
not currently focused on building inventories to
levels approaching their corn and wheat stocks. In
the United States, the 2019 crop season was a tur-

bulent period and resulted in significant changes
in major crops. For example, the season ended
with the corn harvest area up less than one percent from the previous year, at 81.5 million acres.
However, dismal yields, due to poor growing conditions, resulted in a 2019 corn crop of 13.7 billion
bushels, down 4.5 percent from 2018. Total U.S.
corn use in 2019 declined by almost three percent
to 13.9 billion bushels, primarily due to reduced
ethanol demand and reduced exports. The decline
in production coupled with reductions in total
use resulted in a reduction in ending stocks of 129
million bushels, a 5.8 percent decline from 2018.
Overall, the reduced ending stocks compared to
the reduced total use resulted in the 2019 U.S.
corn stocks-to-use ratio being 15 percent, down
only slightly from the previous year (Figure 6).
With stocks-to-use unchanged and an uncertain
future for demand, particularly regarding energy
use, the price forecast for corn as of this writing

Farm Prices Paid and Received for Crops and Animals 2000-2019
180

120

160
100

140
2011 = 100

80
60
40

100
80
60
40

20

Crops Prices Paid

Crops Prices Received

Livestock Paid

20

Livestock Received

SECONDQUARTER2020

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20

14
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12
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10
11
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20

08
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20

06
07
20

20

04
05
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20

02
03
20

20

20

20

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Source: USDA, NASS, Quick Stats https://quickstats.nass.usda.gov
USDA, NASS Agricultural Prices, various issues, https://usda.library.cornell.edu/concern/publications/c821gj76b?locale=en#release-items

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https://www.usda.gov/oce/forum/2020/outlooks/Grains_and_Oilseeds.pdf https://quickstats.nass.usda.gov https://usda.library.cornell.edu/concern/publications/c821gj76b?locale=en#release-items
Crop Insurance Today Second Quarter 2020

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