USDA lowers corn production forecast

By Erin Voegele | September 13, 2016

On Sept. 12, the USDA released its World Agricultural Supply and Demand Estimates report, lowing its corn production forecast to 15.093 billion bushels, down 61 million from the previous month. Corn supplies for 2016-’17 are lowered from last month, but are still forecast at a record 16.859 billion bushels, as a smaller crop more than offsets a small increase in beginning stocks due to a reduction in 2015-’16 exports. Feed and residual use for 2016-’17 is lowered by 25 million bushels with a smaller crop and higher expected prices.

Exports are unchanged from last month. Corn ending stocks are down from last month, but if realized would still be the highest since 1987-’88. The projected range for the season-average corn price received by producers is raised 5 cents on both ends to $2.90 to $3.50 per bushels.

Brazil corn production is raised, with the USDA noting relatively favorable corn prices in southern Brazil are expected to boost first-crop planted area at the expense of soybeans. Corn exports are also raised for Brazil with larger projected supplies for the local marketing year beginning in March 2017. China corn production is lowered due to drier-than-normal conditions during July and August in western Heilongjiang and eastern Inner Mongolia. Corn imports are raised for China, reflecting updated expectations of trade by non-state importers. EU corn production is also reduced.  

Foreign corn ending stocks for 2016-’17 are lowered 700,000 tons from last month. Stock declines are the largest in Argentina and the EU, with the former reflecting expectations of larger exports during 2015-’16. The report also states global corn stocks, at 219.5 million tons, are down from last month but still projected to be record high.