Ten-Year Grain Baseline 2019-2028 – Long-Term Challenges for US Corn and Wheat Markets
One of the most important highlights of Rabobank’s annual baseline is that projected ending stocks for US corn, soybeans, and wheat for the next ten years will be higher than the previous decade.
Highlights of the baseline report include:
- With higher stocks the norm, there will be a lid on corn and wheat prices.
- Long-run growth in domestic use is one of the larger challenges for US grain markets.- Exports from the US grain sector are largely stagnant over the ten-year baseline.
- High stocks and low prices will keep profitability challenged along the entire supply chain.
There are three hypothetical scenarios analyzed:
- Scenario 1: Keeping current corn-usage levels will result in a slow decline in the corn farmgate price and/or returning to pre-mandate ethanol use could plunge prices to USD 2/bu.
- Scenario 2: If corn area planted moves to 95m acres in 2020/21, corn prices will decline to USD 3/bu, all else being equal.
- Scenario 3: Wheat exports need to increase by 30% to 40% to move prices to USD 6/bu
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Where to go from here
RaboResearch Food & AgribusinessPO Box 17100 (UC 053) 3500 HG Utrecht, The Netherlands