USDA Tightens US Old-, New-Crop Corn Outlooks

The USDA has tightened its old- and new-crop corn outlook amid upwardly revised 2020-21 demand estimates.

In a monthly supply-demand outlook released Thursday, the USDA lowered its old-crop ending stocks estimate by 150 million bu from last month to 1.107 billion (versus 1.919 billion the previous year), while projected new-crop ending stocks dropped an identical amount to 1.357 billion. Both estimates fell below average pre-report trade guesses of 1.207 billion and 1.423 billion, respectively. Corn futures were trading 3 to 11 cents higher after the report’s release.

The lower old-crop ending stocks estimate is the partially the result of a 75-million increase in corn for ethanol use compared to a month earlier, rising to 5.05 billion bu. The upward revision reflects the most recent data from the Grain Crushings and Co-Products Production report, and weekly ethanol production and refiner and blender net inputs data during May which ‘indicate demand is almost back to levels seen prior to COVID-19,’ the USDA said.

Along with the upward revision in corn for ethanol use, the USDA also bumped its old-crop corn export forecast 75 million bu high from May to 2.85 billion, reflecting export inspection data for the month of May that implies continued robust global demand for U.S. corn, despite high prices.

The decline in the new-crop corn ending stocks estimate is entirely due the smaller carryin from the old-crop marketing year. The USDA’s new-crop demand estimates – initially revealed last month – are all unchanged in June. The new-crop production and yield estimates, at 14.99 billion and 179.5 bu/acre, are also steady from last month despite dryness in some parts of the Corn Belt, most notably the Dakotas.

The USDA’s old- and new-crop season average farm price estimates are both unchanged from May at $4.35 and $5.70/bu.

Globally, the USDA trimmed its 2020-21 corn ending stocks estimate to 280.6 million tonnes from 283.53 million in May, as expected Brazil production – which was cut 7 million tonnes last month – was lowered another 3.5 million to 98.5 million. Yield expectations for Brazil’s second-crop corn have been lowered based on below-normal rainfall in the Center-West and South during the month of May, the USDA said.

As for new crop, projected world ending stocks of corn were dropped to 298.41 million tonnes from 292.3 million in May.

Source: DePutter Publishing Ltd.

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