WASDE: Corn yield down 0.9 bushel, ending stocks up 17 M bushels

By Susanne Retka Schill | January 12, 2016

Soft corn markets should be strengthened some by USDA lowering its national average yield by 0.9 bushels to 168.4 bushels per acres. That brings the USDA estimates for 2015-’16 corn production down by 53 million bushels, although that remains the third largest crop on record at 13.6 billion bushels. The continued slow pace of exports is contributing to higher projections for ending stocks, the highest since 2005-’06.

USDA’s Jan. 12 World Agriculture Supply and Demand Estimates report included adjustments indicated by the Dec. 1 Grain Stocks report.

Total projected corn use for 2015-’16 is reduced slightly with lower projected food, seed, and industrial use and exports. Feed and residual use is unchanged as September to November disappearance, as indicated by the Dec. 1 stocks, was largely in line with expectations. Corn used to produce ethanol is unchanged, but projected use for sweeteners is lowered 10 million bushels. 

Exports are lowered 50 million bushels based on the slow pace of sales and shipments to date and continued strong competition from South American suppliers. Corn ending stocks are projected 17 million bushels higher at 1.8 billion bushels, stocks remain the highest since 2005-’06.

The projected range for the 2015-’16 season-average corn farm price is lowered 5 cents on each end to $3.30 to $3.90 per bushel reflecting weakness in export demand and recent declines in cash and futures prices. The sorghum farm price is lowered 20 cents at the midpoint to a range of $3.05 to $3.55 per bushel reflecting the weakening relationship to cash corn prices in interior markets.

Global coarse grain supplies for 2015-’16 are projected 6.8 million tons lower mostly on lower corn production for South Africa and the United States and lower rye production for Russia.  Foreign coarse grain supplies are lowered 5.9 million tons. Corn production is lowered 4.0 million tons for South Africa as continued heat and dryness during December further reduced prospects for area and yields, particularly in the western producing areas where satellite imagery suggests much of this year’s crop may not have been planted.  Russia corn production is lowered 500,000 tons with reductions in area and yields, but an area increase for Ukraine corn raises production an offsetting 500,000 tons.  Other corn production changes include small reductions for China and Peru. 

Global coarse grain consumption for 2015-’16 is reduced with the biggest reduction for Russia, down 1.2 million tons with lower rye, oats, and corn consumption reflecting tighter supplies with the smaller crops.  Corn consumption for South Africa is lowered 700,000 tons with reduced supplies. Corn consumption is also lowered for Saudi Arabia, Argentina, and Pakistan.

Global coarse grain imports for 2015-’16 are raised with increases for South Africa, Mexico and Peru corn more than offsetting reductions in corn imports for China and Saudi Arabia. Corn exports are raised for Brazil, Mexico, and Ukraine, but lowered for South Africa, India, and Russia. Corn exports are also raised for Argentina and Brazil for the 2014-’15 season there, further reducing prospects for 2015-’16 marketing year U.S. corn exports. Global 2015-’16 corn ending stocks are projected 2.9 million tons lower with reductions for Brazil, China, South Africa, Pakistan, Russia, Argentina, and Saudi Arabia.  World corn ending stocks remain record large at 208.9 million tons; however, more than half of those stocks are held in China.

The USDA also released the crop production annual summary on Tuesday, which was incorporated into the supply/demand projections with the lower corn yield. Corn for grain production is estimated at 13.6 billion bushels, down slightly from the November forecast and down 4 percent from the 2014 estimate. The average yield at 168.4 bushels per acre is 2.6 bushels below the 2014 average yield of 171.0 bushels per acre. Area harvested for grain is estimated at 80.7 million acres, up slightly from the November forecast but down 3 percent from the 2014 acreage.

Sorghum grain production in 2015 is estimated at 597 million bushels, up slightly from the November forecast and up 38 percent from the 2014 total. Planted area for 2015 is estimated at 8.46 million acres, up 19 percent from the previous year. Area harvested for grain, at 7.85 million acres, is up 23 percent from 2014. Average grain yield, at 76.0 bushels per acre, is down 1.7 bushels from the previous forecast but up 8.4 bushels from 2014 and represents a record high yield for the United States.