MADRID: The USDA has released the August edition of its World Agricultural Supply and Demand Estimates report, forecasting corn production will reach a record 15.2 billion bushels, up 613 from the July projection.
According to the WASDE report, the season’s first survey-based corn yield forecast, at 175.1 bushels per acre, is up 7.1 bushels from August’s trend-based projection and above the record 171 bushels in 2014-’15. The USDA’s Crop Production report indicates that nearly all Corn Belt states, except Minnesota and South Dakota, are forecast to have yields above last year.
The USDA predicts U.S. corn supplies for 2016-’17 will be 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 USDA’s Grain Crushing 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.
According to the USDA, 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 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.
Foreign corn carrying 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 data 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.
Outside the U.S., corn feeding is raised for Mexico, India and EU. Partly offsetting is a 1-million-ton reduction in corn feeding for Indonesia, where government import licensing policy is expected to reduce corn imports. Global corn stocks are projected 12.4 million tons higher with the U.S. accounting for two-thirds of the increase.
