Crop Insurance Today June 2018 - 13

usda.gov/Quick_Stats/index.php and the following
annual reports: Crop Production 2017 Summary,
January 2018; Vegetables 2017 Summary, February, 2108; Citrus Fruits 2017 Summary, August,
2017 from FarmDoc Daily]

Figure 11 U.S. Farm Prices for Crops & Animals (2000 to 2017)

Commodity Market
Developments
The overall gap between global production
and consumption of grains and oilseeds is projected to narrow in 2017-18, down 2 percent from
the previous year (Figure 9). However, that difference is closing more rapidly for coarse grains
than oilseeds and is driving market conditions for
the big three commodities; wheat, corn, and soybeans. World oilseed ending stocks are expected
to decline by 4.5 percent, led by notable reductions in Brazil and Argentina, a modest decline
in global production, coupled with an increase
in crush. Global soybean prices are expected to
trend upward in reaction to the lower production
in Brazil and crop losses in Argentina.
The decline in world coarse grain ending
stocks is estimated to be more substantial down;
14.7 percent from the previous year. The reduction is largely due to a decline in corn stocks, estimated to be down more than 14 percent from
2016-17. The reduction in global corn stocks is
associated with lower production in both Argentina and Brazil along with a significant drawdown of stocks in China. The tighter supplies are
expected to contribute to some upward movement in world corn prices.
In contrast, world wheat stocks continued to
build, increasing by almost 7 percent, around 17
million metric tons, from the previous year attributable to a new world record wheat crop of
759.8 million metric tons and only a slight increase in global consumption. The record crop
was led by increased production in Russia, India and the EU. This was the fifth year of overall
production increase. The increased stock levels
are expected to continue to dampen price expectations. Quality remains the key to buyer's willingness to offer premium, above-average market
prices.
In the U.S., hard red winter wheat is most
affected by the plentiful global supplies. In addition, abundant corn stocks work to displace
wheat in the feed use category, reducing overall
demand. Significant reduction in 2017-18 production offset a decline in overall use to help
reduce ending stocks from their 2016-17 levels.
However, ending stocks of wheat remain above

Source: USDA, NASS, Quick Stats
https://quickstats.nass.usda.gov

their five-year average and represent a burdensome stocks-to-use-ratio of nearly 53 percent.
Early estimates of the 2017-18 global cotton market forecast a second year of increase
in production of 13 percent from the previous
year, to just over 122 million bales. Favorable
growing conditions in Texas, higher yields and
area in China, increased area in India, and expanded planting in Southern Hemisphere pro-

ducing-countries all contributed to the upward
production. Estimates for increased use in China,
India, Vietnam, and Bangladesh contributed to a
forecast of a 5 percent higher consumption level,
to 120.4 million bales, from last year. Revisions
to beginning stocks estimates resulted in an increase in global ending stocks forecast to be only
about 1.7 percent, at 88.3 million bales, despite
the gap between higher production estimates rel-

Figure 12 Weekly Corn Futures Prices,
December Contact, 2012-2017

Weekly
Data ss of April 16,2018
Source: Barchart.com

CROPINSURANCE TODAY®

http://www.usda.gov/Quick_Stats/index.php https://quickstats.nass.usda.gov http://www.Barchart.com

Table of Contents for the Digital Edition of Crop Insurance Today June 2018