COVID-19 is changing the outlook for supply and demand for farm products, and the evidence is in the new May World Agriculture Supply and Demand Report from USDA, known as the WASDE report. The numbers say the lockdown over the disease is impacting demand for agricultural commodities. American Farm Bureau Federation Economist Shelby Myers says decreased ethanol demand is changing the 2020 corn outlook.
“For the current marketing year, USDA estimated a month-to-month decrease of 100 million bushels of ethanol corn use compared to the April WASDE,” she explained. “But, since March when COVID-19 impacts were beginning, overall corn ethanol use has decreased 475 million bushels. USDA estimates ending stocks for this marketing year to rise above 2 billion bushels, and prior to COVID-19, ending stocks were projected to be 1.7 billion bushels.”
USDA also made changes to the outlook for soybeans and wheat.
“USDA estimates soybean production will rebound this year, along with even better news of soybean exports for the new crop, up 22 percent from 2019. For wheat, it had a meek outlook earlier this year, but COVID-19 consumer trends have given a small bump to wheat food use. That was unexpected and can hopefully continue to lower the stock to use ratio below 40 percent.”
Myers says cotton continues to struggle amid the pandemic and needs a better export market this year.
“For the new marketing year, cotton planting expectations mirror last year at 13.7 million acres at almost just as much production. But, estimates of 46 percent more cotton carryover from this year to next is going to burden supply.”
Myers says cotton really needs the export market to pick up. USDA estimates suggest a six percent increase in exports for this upcoming marketing year.