U.S. Agriculture Department reduces corn, sorghum stocks estimate

By Ann Bailey | June 10, 2016

The U.S, Department of Agriculture reduced the 2016/’17 outlook for U.S. feed grain supplies in its June World Agricultural Supply and Demand Estimates report, with declines estimated in corn and sorghum beginning stocks.

The agency reduced corn ending stocks for 2015/’16 by 95 million bushels as a 100-million bushels increase in the corn export forecast more than offset a slightly higher import projection. As of early June, total U.S. corn export commitments, that is, accumulated exports and outstanding sales, were higher than year-ago levels for the first time in the 2015/’16 marketing year.

Reduced corn production in Brazil and harvest delays in Argentina improved the relative competitiveness of U.S. corn in recent weeks, USDA said. The U.S. corn export projection for 2016/’17 was raised 50 million bushels as U.S. supplies were expected to remain more competitive in 2016/’17 with less production for Brazil.

Corn ending stocks for 2016/17 were projected at 2 billion bushels, down 145 million from last month. Changes to 2016/’17 sorghum beginning stocks reflected higher 2015/’16 forecasts for sorghum use. Projected exports were raised 15 million bushels based on recent food aid shipments and increased export sales. Food, seed, and industrial use was expected to be 10 million bushels higher based on reported sorghum use for ethanol production in the latest Grain Crushings and Co-Products Production report.

The agency raised the season-average farm price for corn for both 2015/’16 and 2016/’17. The 2015/’16 price was forecast up 10 cents per bushel at the midpoint with a range of $3.60 to $3.80 per bushel. The 2016/’17 price was projected 15 cents per bushel higher at the midpoint with a range of $3.20 to $3.80 per bushel.

Price outlooks for the other feed grains in 2016/’17 also were raised in the June report. Foreign coarse grain supplies for 2016/’17 are projected up 5.3 million tons, driven mostly by larger corn production in Mexico and greater barley production in the EU and Ukraine. Brazil corn production for 2015/’16 was reduced l3.5 million tons to 77.5 million, as an early end to the rainy season in west-central Brazil reduced yields for second-crop corn.

Global 2016/’17 coarse grain consumption was raised 4.1 million tons with larger corn and barley feeding for Iran and greater barley feeding for the EU and Saudi Arabia. Reductions in 2015/16 and 2016/17 Brazil corn exports were offset by higher exports for the United States and reduced imports for the EU and Mexico. Global corn ending stocks for 2016/’17 were projected 1.9 million tons lower as the reduction for the United States more than offset higher foreign stocks. At the projected 205.1 million tons, world corn stocks were expected to decline slightly in 2016/’17.