World Grain - June 2017 - 38

FEATURE: BIG CROPS, LOW PRICES PREDICTED

ever, corn fundamentals begin to return
to the responsiveness that they had prior
to the introduction of ethanol mandates,
which were introduced in 2005, then
you may slip down to the levels shown
in 2005 and 2004. The model says that
if you look at an expanded model that
includes the ethanol era as well as the

pre-ethanol era, at least from a fundamental perspective, with supply demand
at roughly 17.6%, national average corn
prices could fall to $2.50."
OILSEEDS OUTLOOK
Dan Basse, president of AgResource,
gave his view of the oilseeds market.

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38

"Everybody knows about the oversupply of oilseeds," he said. "We know
that the Brazilians have a very large
crop. We understand that the meal market is oversupplied in the United States.
Argentina has now captured the lowcost selling price in the marketplace but
again we are starting to see the U.S. become competitive in terms of opportunities later this year.
"As we look at production the growth
continues. This has been the year of oilseeds. This is going to be a new record
high in terms of total oilseed production, somewhere around 560 million
tonnes. We have sizeable oilseed crops
around the world."
,WLVWKHVXQÀRZHUPDUNHWWKDWLVVKRZing the most growth over the last couple
of years because of what is happening in
the Black Sea, followed by soybeans on
a percentage basis, he said. There is no
shortage of oilseeds, but he stressed that
stocks to use at 20% is well short of the
record level of around 22.5%.
"We are estimating at AgResource
that the world soybean crop in 2017-18
will be 347.6 million tonnes," he said.
"That is up around 1.6 million tonnes
from last year. We do expect that maybe
world soy yields will drop a little bit
closer to trend.
"The other thing that is very interesting in the United States when we think
about the productive capacity in this
country is that we have seen three years
of record soybean yields and the question becomes can it happen in a fourth
year, which would be also a record?
There have been agronomic changes in
the United States but as we look at it at
$J5HVRXUFH ZH WKLQN LW LV YHU\ GLI¿cult to pop another record yield for U.S.
soybeans this year. In fact, if you had a
more normal yield, that would pull us
back in terms of productive capacity."
Soybean stocks-to-use ratio is going
to be the highest in six years.
"U.S. soybean stocks will be the highest in a decade," he said. "AgResource is
forecasting them at a little over 14 million tonnes. For new crop we are looking at that number to be close to 16.7
June 2017 / World Grain / www.World-Grain.com

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World Grain - June 2017

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