COVID-19 impacting commodity outlook

The latest World Agriculture Supply and Demand Estimates (WASDE) Report from the U.S. Department of Agriculture (USDA) shows COVID-19 impacting demand for agricultural commodities.

Decreased ethanol demand is changing the 2020 outlook for corn, according to American Farm Bureau Federation (AFBF) Economist Shelby Myers.

“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. But, since March when COVID-19 impacts were beginning, overall corn ethanol use has decreased 475 million bushels,” she said. “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.”

Myers noted 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 said. “Cotton really needs the export market to pick up and USDA estimates reflect a 6 percent increase in exports for this upcoming marketing year.”

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,” Myers said. “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.”