USDA ups forecasts for corn production, corn use for ethanol

By Erin Voegele | September 12, 2018

The USDA released the September edition of its World Agricultural Supply and Demand Estimates report on Sept. 12, increasing its 18-’19 production forecast for corn and raising its forecast for the volume of corn going to ethanol production.

According to the WASDE report, 2018-’19 corn production is now forecast at 14.827 million bushels, up 241 million from last month on an increased yield forecast. If realized, the USDA said the crop will be the second highest on record. Yields are expected to reach record highs in Illinois, Iowa, Nebraska, Indiana, Ohio and South Dakota.

Corn supply forecasts are higher than last month, as a larger crop more than offsets a small decline in beginning stocks due to higher estimated exports for 2017-’18.

Projected feed and residual use for 2018-’19 is raised 50 million bushels to 5.575 billion bushels due to a larger crop and lower expected prices. Projected corn used for ethanol is raised 25 million bushels, to 5.65 billion bushels. With supply increasing more than use, the report raises the forecast for corn ending stocks by 90 million bushels, to 1.774 billion bushels.

The season-average corn price received by producers is projected 10 cents lower with a midpoint of $3.50 per bushel.

Foreign corn production is forecast higher than last month with projected increases for the EU, Angola, Paraguay, Turkey and Serbia more than offsetting declines for Canada, South Africa, and Guatemala. EU corn production is raised, mostly reflecting increases for Romania, Hungary, Bulgaria and France. In Bulgaria and Romania, yields are expected to be record high.

Corn exports for 2018-’19 are raised for Ukraine, Serbia and Paraguay, but lowered for Canada and South Africa. Imports are raised for the EU, Japan, Brazil and Guatemala, with partly offsetting declines for Algeria and Saudi Arabia. For 2017-’18, exports are lowered for Brazil and Argentina, reflecting slower-than-expected trade to date.

Foreign corn ending stocks for 2018-’19 are down from last month, with declines for Argentina, Paraguay, the EU, Brazil, Turkey and India. Global corn stocks, at 15.7 million tons, are up 1.5 million tons from last month.