WASDE Coarse Grains: Lower U.S. Stocks Despite Reduced Usage

Photo: University of Tennessee

This month’s 2020/21 U.S. corn outlook is for sharply lower supplies, reduced feed and residual use, increased food, seed, and industrial use, and lower ending stocks. Corn beginning stocks are raised 145 million bushels, based on lower use forecasts for 2019/20.

Feed and residual use for 2019/20 is lower based on indicated disappearance during the first three quarters of the marketing year as reported in the June 30 Grain Stocks. Food, seed, and industrial use is lowered 45 million bushels.

Corn used for ethanol is lowered 50 million bushels based on reported use to date and weekly ethanol production data reported by the Energy Information Administration during the month of June and into early July. Projected corn used for glucose and dextrose and starch are both raised, while that used for high fructose corn syrup is lowered.

For 2020/21, corn production is forecast 995 million bushels lower based on reduced planted and harvested areas from the June 30 Acreage report. The national average corn yield is unchanged at 178.5 bushels per acre.

During June, harvested-area weighted precipitation for the major corn producing states as reported by the National Centers for Environmental Information was below normal, but did not represent an extreme deviation from the 1988 to 2019 average. Silking as reported in the Crop Progress report is slower than the recent historical average and for much of the crop the critical pollination period will be during middle and late July.

Projected feed and residual use is lowered 200 million bushels, reflecting a smaller crop and higher expected prices. Food, seed, and industrial use is raised 25 million bushels, based on projected increases in the amount of corn used for beverage and manufacturing, starch, and glucose and dextrose.

Small revisions are made to historical trade and utilization estimates based on the 13th month trade data revisions from the Census Bureau. With supply declining more than use, stocks are lowered 675 million bushels to 2.6 billion. The season-average corn price received by producers is raised 15 cents to $3.35 per bushel.

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This month’s 2020/21 foreign coarse grain outlook is for virtually unchanged production, slightly higher trade, and lower stocks relative to last month. Foreign corn production is virtually unchanged from last month, as forecast increases for Russia and Bolivia are essentially offset by a reduction for Canada.

Barley production is lowered for the EU and Morocco but raised for Canada.

Major global trade changes for 2020/21 include larger corn imports for Canada and Algeria, with a partly offsetting reduction for Kenya. For 2019/20, corn exports are raised for Argentina but lowered for Brazil for the local marketing year beginning March 2020 based on observed data through early July.

China’s corn feed and residual use for 2019/20 and 2020/21 is raised from last month, based on a faster-than-expected rebound in soybean meal equivalent protein consumption and current corn prices.

Foreign corn ending stocks for 2020/21 are lowered from last month, with the largest declines for China, Argentina, the EU, Canada, and Mexico.

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