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Higher Corn Demand in 2019-20


USDA sees higher corn acres, production, exports and prices for the 2019-20 crop as well as lower ending stocks at the end of the year.

It’s a different story for soybeans as production and yield are lowered, but a high carryover, relatively low exports and overall higher supply will translate into continued higher ending stocks.

USDA released its initial Grains and Oilseeds Outlook early Friday at the USDA Agricultural Outlook Conference.

CORN

Production is pegged at 14.89 billion bushels (bb), which would be 3% above the 2018-19 crop. Yield is projected at 176 bushels per acre (bpa), “based on a weather-adjusted trend, assuming normal planting progress and summer growing season weather. And agriculture is projected at 92 million acres (ma), up from 89.1 ma for the 2018-19 crop.

USDA raised feed and residual use for corn by 125 million bushels (mb) to 5.5 bb. Ethanol production remains steady at 5.575 bb. Exports are bumped up 25 mb to 2.475 bb.

Ending stocks for the 2019-20 crop are projected at 1.65 bb, down 85 mb from the 2018-19 crop. The stocks-to-use ratio would fall to 10.9% for 2019-20 compared to 11.6% for the 2018-19 crop.

The average farm-gate price is bumped up 5 cents a bushel to $3.65 a bushel as well.

SOYBEANS

Soybean production is pegged at 4.175 bb, an 8% decline from the record 2018-19 crop.

The average yield is projected at 49.5 bpa, down 2.1 bpa from last year.

With a projected carryover of 910 mb, total supplies of 5.105 bb will be a record volume. USDA increase domestic crush to 2.235 bb, up 18 mb from the 2018-19 crop.

Exports are increased to 2.025 bb, up 150 mb from the 2018-19 crop, but still lower than most recent current years such as 2016-17 and 2017-18. USDA noted, “With rising global demand and reduced supplies in Brazil this fall, some recovery in U.S. exports is expected despite continued import duties assumed for U.S. soybeans in China.”

Ending stocks for the 2019-20 crop are pegged at 845 mb, down 65 mb form the 2018-19 crop, but still historically high. The stocks-to-use ratio falls from 22.2% for 2018-19 to 19.8% for 2019-20. Still, that remains high compared to 2016 and 2017 crops.

Soybean prices are expected to increase an average of 20 cents to $8.80 a bushel.

WHEAT

Wheat production is projected at 1.9 bb, up about 16 mb from the 2018-19 crop.

Planted acres are pegged at 47 ma, down 800,000 acres from a year earlier. Yield is forecast at 47.8 bpa, up .2 bpa from last year as well.

Beginning stocks are projected at 1.01 bb, but domestic food and seed use is expected to rise by 10 mb, as is feed and residual use, bringing total domestic use to 1.133 bb, up 20 million bushels from 2018-19.

Exports, however, are projected to decline 25 mb to 975 mb. That puts ending stocks for 2019-20 at 944 mb, down 66 mb from 2018-19.

The average farm-gate price for wheat is projected at $5.20 a bushel, up five cents from the old crop.

COTTON

Cotton acreage is expected to be 14.25 ma, up 1.1% from 2018-19. The average yield is projected at 835 pounds an acre, down 3 pounds from last year.

Cotton production is projected at 22.5 million bales, up from 18.39 million bales last year.

Cotton exports will rise 13.3% to 17 million bales. Ending stocks, however, will increase 2 million bales to 6.3 million bales, raising the stocks to use ratio to 31%.

The average farm price for cotton is projected at 67 cents a pound, down five cents from 2018-19.

USDA will update its prospective plantings for crops on March 29.

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

Source: Chris Clayton, DTN

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