WASDE Coarse Grain: Larger Domestic Corn Supplies, Greater Demand

Corn harvest. Photo: Texas A&M AgriLife

This month’s 2018/19 U.S. corn outlook is for larger supplies, greater feed and residual use, increased exports, and lower ending stocks. Corn beginning stocks are lowered 75 million bushels as higher forecast exports and food, seed, and industrial (FSI) use more than offset lower feed and residual use in 2017/18.

Increased 2017/18 exports are based on record-high shipments during the month of May and export inspection data for June. Current outstanding export sales are also record high. FSI use is raised as a projected 25-million-bushel increase in the amount of corn used for ethanol, based on reported use to date, is partially offset by a decline in the amount of corn used for glucose and dextrose.

Feed and residual use is lower based on indicated disappearance during the first three quarters of the marketing year in the June 29 Grain Stocks report.

For 2018/19, corn production is forecast 190 million bushels higher based on increased planted and harvested areas from the June 29 Acreage report. The national average corn yield is unchanged at 174.0 bushels per acre. During June, harvested-area weighted precipitation for the major corn producing states was above normal.

While silking, as reported in the Crop Progress report, is ahead of the recent historical average, for much of the crop, the critical pollination period will be during middle and late July. Projected feed and residual use for 2018/19 is raised 75 million bushels, mostly reflecting a larger crop and a forecast reduction in the amount of corn used to produce ethanol. FSI use is lowered 60 million bushels based on a 50-million-bushel reduction in the forecast amount of corn used to produce ethanol, and a 10-million-bushel decline in amount of corn used for glucose and dextrose.

Exports are raised 125 million bushels based on expectations of reduced competition from Argentina, Brazil, and Russia. Small revisions are made to historical trade and utilization estimates based on the 13th month trade data revisions from the Census Bureau. With use rising more than supply, stocks are lowered 25 million bushels to 1.552 billion.

The season-average corn price received by producers is lowered 10 cents at the midpoint for a range of $3.30 to $4.30 per bushel.

Oat production is virtually unchanged and barley production is up 8 million bushels reflecting area adjustments in the Acreage report and higher barley and lower oat yields in today’s Crop Production report. Sorghum production is raised based on the higher area reported in the Acreage report.

This month’s 2018/19 foreign coarse grain outlook is for lower production, trade, and stocks relative to last month. Russia corn production is lowered, reflecting reductions to both area and yield. Extreme heat and dryness in the Southern and North Caucasus districts during the month of June is expected to reduce yield prospects.

Corn production is raised for the EU, but lowered for Canada. Barley production is reduced for Russia, Australia, and the EU, but raised for Canada. For 2017/18, Brazil corn production is reduced based on the latest government statistics. Major global trade changes for 2018/19 include lower corn exports for Russia, more than offset by increased exports for the United States.

Corn imports are raised for South Korea and Saudi Arabia, but lowered for Japan and Mexico. Sorghum imports are lowered for China, but partially offset by increases for Mexico and Japan. For 2017/18, corn exports are lowered for Argentina and Brazil. Foreign corn ending stocks are lowered from last month, with the largest declines for China, the EU, and Mexico.

Full report.


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