USDA reports reveals large corn stocks, potential record crop

By Erin Voegele | July 01, 2014

On June 30, the USDA National Agricultural Statistics Services released updated grain stocks and acreage reports. In a new FarmDocDaily post, University of Illinois economist Darrel Good noted the stocks report showed much larger stocks of both corn and soybeans that had been anticipated in the market. 

The grain stocks report indicates that corn stocks in all positions on June 1 totaled 3.85 billion bushels, up 39 percent when compared to June 1, 2013. Of those stocks, an estimated 1.86 billion bushels are stored on farms, up 48 percent from the previous year, while off-farm stocks are at 1.99 billion bushels, up 32 percent from one year ago. The March-May indicated disappearance is 3.15 billion bushels, compared to 2.63 billion bushels for the same period of last year.

The acreage report estimates corn planted area at 91.6 million acres, down 4 percent from last year. While planted acreage is the lowest since 2010, the report specifies it is still the fifth largest corn acreage since 1944.  

In his analysis, Good notes the corn stock data implies that the feed and residual use of corn during the third quarter of the 2013-’14 marketing year was about 40 million bushels less than during the same period of the previous year. “The disappointing level of use suggests that the USDA projection of feed and residual use of 5.3 billion bushels for the year may be too high,” Good wrote. “That projection will be updated in the July 11 WASDE report. The recent slowdown in the pace of corn export shipments also points to a slightly smaller total for the year than the 1.9 billion bushels currently projected by the USDA.  Those declines may be partially offset by more corn than projected used for ethanol production. However, the bottom line is that old crop corn supplies are fully adequate to meet expected consumption needs through the summer, particularly with a large and early maturing corn crop coming on.”

Regarding the acreage estimates, Good said the USDA’s June surveys revealed planted acres at a level essentially equal to intentions reported in March. “Acres of corn harvested for grain are projected at 83.839 million, 3.8 million fewer acres than harvested last year,” Good wrote. “Early season weather and crop conditions, however, point to a very high U.S. average corn yield, perhaps exceeding the record yield of 164.7 bushels of 2009.  A yield of 165 bushels would result in a crop of 13.833 billion bushels, slightly less than last year's record crop of 13.925 billion bushels.  A continuation of generally favorable weather conditions through July is expected, suggesting that the average yield could be even larger than 165 bushels.  Regardless, it now appears that the 2014 crop will be large enough to lead to a substantial increase in corn stocks by the end of the 2014-15 marketing year.  Conditions now point to an average price near $4.00 during the crop year ahead.”

Within his analysis, Good also pointed out that corn prices declined sharply following release of the reports, putting corn futures at about 35 cents, or 7.6 percent, below the spring crop insurance price. Crop revenue insurance will provide some revenue protection for those with high levels of coverage if prices continue to decline, he continued.