WASDE Coarse Grains: Lower Domestic Corn Demand, Higher Ending Stocks

Corn harvest. Photo: Texas A&M AgriLife

This month’s 2017/18 U.S. corn outlook is for reduced feed and residual use, slightly lower food, seed, and industrial (FSI) use, and increased ending stocks. FSI is lowered 5 million bushels, as a 10-million-bushel reduction in the amount of corn used for glucose and dextrose is partially offset by a 5-million-bushel increase in corn used for starch.

Projected feed and residual use is lowered 50 million bushels to 5,500 million bushels based on indicated disappearance during the first half of the marketing year in the March 29 Grain Stocks report. With supply unchanged and total use declining, ending stocks are raised 55 million bushels.

The projected range for the season-average corn price received by producers is unchanged at the midpoint with the range narrowed to $3.20 to $3.50 per bushel.

Global coarse grain production for 2017/18 is forecast 7.0 million tons lower than last month to 1,315.0 million. This month’s foreign coarse grain outlook is for lower production, consumption, trade, and stocks relative to last month. Argentina corn production is down based on reductions to both harvested area and yield. Yield results have been below expectations, while dry conditions are expected to increase the amount of corn harvested for forage or grazed.

Brazil corn production is reduced reflecting expectations of lower second-crop corn area. If realized, the combined corn production of Argentina and Brazil for 2017/18 would be 14.5 million tons below the record reached in 2016/17.

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Other coarse grain production changes of note for 2017/18 include lower barley production for Belarus and reduced corn production for Paraguay, with corn production increases for Mexico and South Africa.

Major global trade changes for 2017/18 include lower projected corn exports for Brazil and Argentina, with reduced export competition from these countries expected to impact the first half of the 2018/19 marketing year in the United States.

Corn imports are lowered for Iran, Malaysia, Taiwan, Mexico, and Chile, with partially offsetting increases for Bangladesh and Turkey. Foreign corn ending stocks are lowered 2.8 million tons from last month, with the largest declines for Argentina, Paraguay, and Brazil.

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