USDA raises 2018-19 year-ending corn stock estimates within expectations

Source: By Sergio Alvarado, Platts • Posted: Thursday, April 11, 2019

Houston — Domestic corn stocks are expected to total 2.035 billion bushels (51.691 million mt) at the end of the 2018-19 marketing year, the US Department of Agriculture said Tuesday in its World Agricultural Supply and Demand Estimates report for April.

This estimate increased 200 million bushels from the March forecast, and decreased 105 million bushels from the 2017-18 estimate of 2.140 billion bushels.

USDA’s domestic corn stocks estimates for the next marketing year, which ends August 31, was within the range of analysts’ expectations of 1.870 billion-2.135 billion bushels, but above the expected average of 1.991 billion bushels.

“This month’s 2018/19 US corn outlook is for lower feed and residual use, reductions in corn used for ethanol and exports, and larger stocks,” the USDA said.

“Feed and residual use is lowered 75 million bushels to 5.300 billion based on corn stocks reported as of March 1, which indicated disappearance during the December-February quarter declined about 9 percent relative to a year ago” the agency added. “Corn used to produce ethanol is lowered 50 million bushels to 5.500 billion based on the most recent data from the Grain Crushings and Co-Products Production report, and the pace of weekly ethanol production during March as indicated by Energy Information Administration data.”

Export estimates fell 75 million bushels to 2.300 billion, “reflecting current outstanding sales and expectations of increased competition from Brazil, Argentina, and Ukraine,” the report said.

USDA’s projection of the midpoint for the season-average corn price received by producers was unchanged from its previous estimate at $3.55/bu, within a tighter range of $3.34/bu-$3.70/bu.

GLOBAL YEAR-ENDING CORN STOCK FORECAST RISES

The USDA estimated global corn year-ending stocks would be 314.01 million mt at the end of the 2018-19 marketing year, up 5.48 million mt, or 1.77%, from its previous estimate, but down 7.75% from its 2017-18 estimate of 340.41 million mt.

USDA’s global corn ending stocks estimate for the next marketing year was within analysts’ expectations of a 307 million-314.9 million mt range, but above their forecast average of 311.16 million mt.

Brazil corn production rose 1.5 million mt to 96 million mt, “reflecting improved yield prospects for second-crop corn,” the USDA said. The Brazil corn production estimate for the 2018-19 marketing year was above analysts’ expectations of a 94.5 million-95.5 million mt range, and the average forecast of 94.83 million mt, sources said.

Argentina corn was 1 million mt higher at 47 million mt “based on expectations of larger area,” the USDA said.

Corn production rose for the EU, Mexico and Indonesia, and decreased for the Philippines and Pakistan.

“Major global trade changes for 2018/19 include higher projected corn exports for Brazil, Argentina, the EU, and Ukraine with a partially offsetting reduction for the United States,” the agency said. “Corn imports are raised for the EU and South Africa, with lower projections for Vietnam and Bangladesh.”

Corn is the primary feedstock for ethanol production in the US and is the main competitor for dried distillers grains.

 

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