WASDE Coarse Grains: Record U.S. Corn Production Forecast

©Debra L Ferguson Stock Photography

Projected 2016/17 U.S. feed grain supplies are increased this month with higher forecast corn, sorghum, barley, and oats production. Corn production is forecast at a record 15.2 billion bushels, up 613 million from the July projection.

The season’s first surveybased corn yield forecast, at 175.1 bushels per acre, is up 7.1 bushels from last month’s trendbased projection and above the record 171.0 bushels in 2014/15. The Crop Production report indicates that nearly all Corn Belt states, with the exception of Minnesota and South Dakota, are forecast to have yields above a year ago.

Sorghum production is forecast 55 million bushels higher with the forecast yield 8.4 bushels per acre above last month’s projection.

U.S. corn supplies for 2016/17 are projected at a record 16.9 billion bushels, up 1.5 billion from the prior year with the larger crop and small increases in beginning stocks and imports. Ending stocks for 2015/16 are raised 5 million bushels reflecting a larger import projection and offsetting usage changes. Imports are raised as the pace of organic corn imports through June has been above expectations.

Corn use for ethanol production in 2015/16 is lowered 25 million bushels, based on the latest indications from the Grain Crushings and Co-Products Production report. An offsetting 25-million-bushel increase is made to corn exports supported by the recent robust pace of shipments and sales.

Total U.S. corn use for 2016/17 is projected 300 million bushels higher at a record 14.5 billion. Feed and residual use is raised 175 million bushels with the larger crop and lower expected prices. Exports are projected 125 million bushels higher, reflecting the relative competitiveness of U.S. corn on the world market and large new-crop outstanding sales.

Corn ending stocks for 2016/17 are projected 328 million bushels higher and, if realized, would be the highest since 1987/88. The projected range for the season-average corn price received by producers is lowered 25 cents on both ends to $2.85 to $3.45 per bushel. This would be down 45 cents at the midpoint from the $3.55 to $3.65 per bushel range now expected for 2015/16.

The all barley price is raised this month based on early indications of prices received by farmers for malting barley.

Foreign coarse grain supplies for 2016/17 are projected 5.1 million tons higher this month with a 2.3-million-ton increase in beginning stocks and a 3.0-million-ton increase in production. Foreign corn carryin is up, mostly reflecting lower 2015/16 corn feeding in Indonesia, Canada, and Ukraine as 2015/16 corn production increases for the EU and South Africa offset a further reduction for Brazil.

Foreign corn production for 2016/17 is raised 2.1 million tons with increases for Argentina, India, and Mexico more than offsetting reductions for the EU and Canada. Corn area is raised in Argentina on an expected reduction in planted area for wheat and small grains.

For India, corn area is increased as favorable rainfall has boosted plantings to date as reported in the latest government statistics. Abundant summer rainfall in Mexico boosts corn yield prospects, but persistent dryness in Ontario reduces the outlook for production in Canada. EU corn production is lowered mostly on reductions for Spain and France.

Global coarse grain consumption for 2016/17 is raised 8.9 million tons this month with higher corn use in the United States accounting for half of the increase. Outside the United States, corn feeding is raised for Mexico, India, and the EU. Partly offsetting is a 1.0-million-ton reduction in corn feeding for Indonesia, where government import licensing policy is expected to reduce corn imports.

Global coarse grain trade is raised reflecting increases for corn and to a lesser extent barley. Global 2016/17 coarse grain ending stocks are projected 13.4 million tons higher reflecting larger corn and barley stocks. Global corn stocks are projected 12.4 million tons higher with the United States accounting for two-thirds of the increase.

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