The outlook for new-crop U.S. corn has loosened from last month, due to an increase in projected 2019 production and a reduction in expected old-crop usage. However, based on the immediate reaction by corn futures, major revisions are expected at a later date.
In updated supply-demand estimates released Thursday, the USDA raised its 2018-19 corn ending stocks estimate by 145 million bu from June to 2.34 billion bu, while 2019-20 ending stocks were increased a more significant 335 million bu to 2.01 billion bu.
Heading into today’s report, new-crop corn ending stocks were seen moving lower to 1.59 billion bu from 1.67 billion in June, while old-crop ending stocks were expected to climb only 16 million bu from last month to 2.21 billion bu. Corn futures didn’t seem to believe the seemingly negative news and were trading up 1-2 cents immediately after the report’s release.
This month’s increase in new-crop ending stocks comes because the USDA is now projecting 2019 American corn output at 13.88 billion bu, up 195 million bu from 13.68 billion last month. The increased production forecast reflects the USDA’s June 28 acreage report, which pegged U.S. corn planted area for this year at 91.7 million acres, versus March intentions of 92.8 million. This year’s average expected corn yield of 166 bu/acre was unchanged from last month versus pre-report expectations it would be cut to 160 bu or lower.
Thursday’s report acknowledged that there are lingering questions for this year’s crop about seeded acreage, which would be addressed by a resurvey in many key corn-producing states. The results of that survey will be incorporated in the August 12 production report.
In addition, the USDA cautioned that a large portion of the crop would be silking later than normal this year. As a result, the government opted to wait before altering its yield forecast.
On the demand side for 2019-20, the USDA increased its forecast for feed and residual use by 25 million bu to 5.175 billion. At the same time, expected new-crop food, seed and industrial use was lowered 20 million bu to 6.93 billion. The export forecast was left unchanged from last month at 2.15 billion bu.
On the old-crop side, the USDA trimmed its total expected use forecast by 145 million bu from last month to reflect sluggish export inspections during June, which were the smallest total for the month since 2013.
Meanwhile, expected old-crop feed use was trimmed slightly to 5.275 billion bu to reflect the June 1 stocks in all positions estimate released last month
The season-average corn price received by producers in 2019-20 is forecast at US$3.70/bu, down 10 cents from last month but still up from an estimated $3.60 in 2018-19.
World corn ending stocks for 2019-20 are forecast at 298.9 million tonnes this month, up from 290.5 million in June but still well down from the revised 2018-19 level of 328.8 million.
Anticipated corn output for 2019-20 in Brazil and Argentina was left unchanged from last month at 101.0 and 50.0 million tonnes, respectively.
Source: DePutter Publishing Ltd.
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