The 2019 U.S. corn planted and harvested area estimates were what most analysts were most closely watching, but it was the average yield that stole the show.
In its first survey-based estimate, the USDA on Monday pegged this year’s average yield at 169.5 bu/acre, up 3.5 bu from the government’s July estimate although still below the previous year’s 176.4 bu average. The increase in the average yield from July essentially rendered moot a drop in the planted and harvested area estimates, with expected corn production for this year actually rising 26 million bu from last month to 13.901 billion bu, just 3.6% below the 2018 crop.
Corn planted and harvested area came in at 90 million and 82 million acres, respectively, in today’s report, compared to 91.7 million and 83.6 million in July and 89.1 million and 83.6 million last year.
Going into the report, the average trade guess had corn harvested area at just 80.05 million acres, as many analysts figured that overly wet conditions prevented farmers from seeding all their intended acres. And while final corn planted area did fall well below March intentions of 92.8 million acres, it didn’t fall nearly as sharply as feared.
(Today’s corn planted area estimate is based on a re-survey of producers in the major production states that was carried out by the USDA in July).
Meanwhile, it appears yields won’t suffer as much as expected either. Despite late planting and some areas of dryness that developed in July after the taps finally turned off, the average yield in the primary production state of Iowa is seen at 191 bu/acre, down a relatively modest 5 bu from 2018. In Michigan, this year’s average yield is actually seen up 2 bu from last year at 155 bu/acre.
However, other states are expected to see significant declines. At 181 bu/acre, the average expected Illinois yield is down almost 30 bu from 2018 and Indiana is down 23 bu from last year at 166 bu/acre. The average corn yield in Ohio, where planting delays were among the worst, is estimated at 160 bu/acre, down 27 bu from 2018.
On the demand side, the USDA trimmed its corn for ethanol use estimate by 25 million bu from last month to 5.475 million bu, while the 2019-20 export forecast was cut to 2.05 billion bu from 2.15 billion in July, “reflecting U.S. export competitiveness and expectations of increasing competition from Argentina, Brazil, and Ukraine.”
With supply rising and use falling, projected 2019-20 corn ending stocks are up 171 million bu from last month to 2.181 billion, down only modestly from the revised old-crop ending stocks (up 20 million bu from last month) of 2.36 billion for 2018-19.
The estimated season average corn price received by producers is lowered 10 cents this month to $3.60/bu.
World corn ending stocks for 2019-20 are pegged at 307.72 million tonnes this month, up from 298.92 million in July but still below the previous year’s 328.58 million.
Corn futures were hit hard by today’s report, down 25 cents/bu in early afternoon trading.
Source: DePutter Publishing Ltd.
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