Oklahoma Farm Report masthead graphic with wheat on the left and cattle on the right.
Howdy Neighbors!
Ron Hays, Director of Farm and Ranch Programming, Radio Oklahoma Ag Network  |  2401 Exchange Ave, Suite F, Oklahoma City, Ok 73108  |  (405) 601-9211

advertisements
   
   
   
   
   
   
   
   
   
   

Agricultural News


Cautious Optimism for Next Three Years in Grains, Ethanol Market

Thu, 09 Nov 2017 05:30:24 CST

Cautious Optimism for Next Three Years in Grains, Ethanol Market
Rising incomes worldwide will underpin global demand and create opportunities for US exports in grains, oilseeds and ethanol according to a new report from CoBank's Knowledge Exchange Division. Meanwhile, global commodity surpluses, trade agreement renegotiations, and relative strength of key currencies will set the scope of growth over the next three years.


"In the absence of major weather disruptions, global grain surpluses are expected to persist over the next three years. Acreage expansions and improvements to yields in competing export hubs will be headwinds for US exports," said Tanner Ehmke, manager of CoBank's Knowledge Exchange Division. "The bright spot will be the continual growth in demand. As the global middle class grows, so will the opportunities for US exports."


Overall, US grains, oilseeds and ethanol will face mounting competition in export markets, but there are specific considerations for each commodity.


Corn
In the short term, demand for corn will continue on a solid growth path. However, the trajectory is expected to slow over the medium term as livestock and broiler growth slows. The ethanol sector will also struggle to grow demand substantively due to changing market dynamics in Brazil, and remaining challenges related to higher blend levels in the US. In the export market, corn will face significant competition from South America and Eastern Europe, specifically Brazil, Argentina and Ukraine.

"The combination of anemic demand growth domestically and rising export competition abroad is expected to result in only minor improvements in the years ahead," said Ehmke. "Free trade agreements are needed to increase our competitiveness abroad."


Wheat
The long-term trends of low prices, declining acreage and rising export competition point to more challenges for US wheat.

"Russia's dominance in the world wheat market creates an uphill battle for US wheat farmers, many of whom are reducing or eliminating wheat in their rotations in search of more profitable crops," said Ehmke.


Soybeans
The US is still the world's largest producer of soybeans, but has handed the mantle of largest exporter to Brazil. This trend is expected to continue as the value of the real remains low compared to the US dollar, and nagging infrastructure challenges in Brazil are improving.

"Global demand growth for livestock feed and biodiesel production will support US soybeans," said Ehmke. "But Brazil is looking to further its lead in exports and will continue to expand soybean plantings."


Ethanol
Brazil and China are determined to reduce their dependence on US ethanol. Expansion of US demand also faces challenges as higher blend levels will be slow to gain acceptance.

"The US could lose Brazil as an export market, and will also be competing globally with Brazil moving forward," said Ehmke. "The US will shift focus to emerging markets like Mexico, Thailand, India and Indonesia in the medium term. However, the newly developed markets are unlikely to fully offset losses in China and Brazil, resulting in weaker crush margins."


Farm Supply
Commodity price stagnation and overcapacity in fertilizer production point to a weak fertilizer market over the short to medium term. Crop protection and seed sales are also expected to struggle due to low commodity prices and rising farm debt levels. Seed and chemical prices, though, are expected to rise, stemming from mergers and acquisitions throughout the world and increased environmental regulatory burdens on chemical companies in China.

Click on the PLAY button in the video box below for a video recap of this report released by CO-Bank.






   

 

WebReadyTM Powered by WireReady® NSI

 


Top Agricultural News

  • Soybeans are the Proverbial Canary in the Coal Mine for Crop Farmers- KC Fed Official Says Critical Marketing Period Ahead for the Crop  Thu, 18 Oct 2018 04:41:42 CDT
  • Rancher Donnell Brown Believes Five Traits Measured by Genomic EPDs Can Simplify Bull Selection  Thu, 18 Oct 2018 03:58:16 CDT
  • Trade News has Pork Producers Feeling Optimistic, White House Encouraged to Keep Deals Coming  Wed, 17 Oct 2018 18:13:49 CDT
  • Checking In on the Beef Checkoff - New 2019 Fiscal Year Budget Priorities Check All the Boxes  Wed, 17 Oct 2018 17:56:38 CDT
  • Oklahoma State FFA Speech Winner Emily Garrett of the Kingfisher FFA Chapter Headed to Indy  Wed, 17 Oct 2018 17:30:01 CDT
  • Inside Oklahoma Wheat Commission and OSUís "Groundbreaking" Product Development Research  Wed, 17 Oct 2018 16:10:26 CDT
  • Do You Know What Your Cattle are Really Worth? CABís Justin Sexton on the True Value of Quality  Wed, 17 Oct 2018 15:53:16 CDT
  • Continuing Momentum of Free Trade Agreements Comes as Welcome News for Soybean Growers  Wed, 17 Oct 2018 15:41:14 CDT

  • More Headlines...

       

    Ron salutes our daily email sponsors!

    Livestock Exchange Oklahoma Ag Credit Oklahoma Farm Bureau National Livestock Credit P&K Equipment Tulsa Farm Show Stillwater Milling KIS FUTURES, INC. Oklahoma Cattlemen's Association

    Search OklahomaFarmReport.com

    Find more about Weather in Oklahoma City, OK

       
       
    © 2008-2018 Oklahoma Farm Report
    Email Ron   |   Newsletter Signup   |    Current Spots   |    Program Links

    WebReady powered by WireReady® Inc.