WASDE Coarse Grains: Lower U.S. Corn Production, Usage, Stocks

Corn harvest. Photo: Kostic Dusan, 123rf

This month’s 2018/19 U.S. corn outlook is for lower production, reduced feed and residual use and exports, and smaller ending stocks. Corn production is forecast at 14.626 billion bushels, down 152 million from last month on a reduced yield forecast.

Feed and residual use is lowered 50 million bushels based on a smaller crop and higher prices. Exports are reduced 25 million bushels based on expectations of increased competition from Ukraine. With supply falling more than use, corn ending stocks are down 77 million bushels from last month.

The season-average corn price received by producers is raised 10 cents to a midpoint of $3.60 per bushel.

Production, domestic consumption, and ending stocks of corn for China are revised beginning with the 2007/08 marketing year. A detailed breakout of the corn balance sheet revisions is available via at the Foreign Agricultural Service PS&D website and the WASDE historical revisions web page.

China’s NBS does not publish estimates of corn stocks or consumption. USDA’s estimates of corn stocks are based on official production estimates by NBS, trade data as reported by China Customs, and other related utilization data. For the time period encompassing the 2007/08 to 2017/18 marketing years, NBS increased corn total production by an unprecedented 266 million metric tons.

USDA raises estimates of domestic disappearance, resulting in higher stock levels that sum to an additional 149 million tons of ending stocks for the 2018/19 marketing year. Changes to feed and residual disappearance attempt to account for, among other factors, the expected impact of the variation in soybean meal equivalent protein consumption, corn prices, availability of other energy substitutes, and residual statistical error.

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Importantly, USDA’s estimates of China’s coarse grain imports do not change with this revision, and thus still reflect the reality that coarse grain imports, in addition to other energy substitutes, surged during a time period when the country was accumulating large stocks of corn.

Global coarse grain production for 2018/19 is forecast 29.9 million tons higher to 1,373.3 million, with a greater corn production forecast for China accounting for a large portion of the increase. Aside from China, corn production is forecast higher for Ukraine, Argentina, Kenya, Moldova, and Russia. EU corn production is lowered, mostly reflecting reductions for Hungary, Poland, and Germany.

Corn exports are raised for Ukraine, Argentina, and Moldova. Imports are raised for the EU, Vietnam, and Iran. Barley imports are raised for Saudi Arabia, with higher exports projected for Russia and Ukraine. Not including China, foreign corn ending stocks are higher than last month, mostly reflecting increases for Argentina, Iran, Paraguay, and Vietnam.

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