Record corn crop ahead means cheaper feedgrains for US

Jon Condon, 13/08/2014

The US Department of Agriculture’s latest World Agricultural Supply and Demand estimates continue to support a record US corn crop, likely to result in lower livestock feed price forecasts.

The decline grain price will partially help offset some of the record pricing being seen for US feeder cattle this year.

2011-5-16-cornUS corn production for 2014/15 is now forecast at a record 14.03 billion bushels, up 172 million bushels from last month’s forecast. There are often close correlations between the size of the US corn crop, the value of US corn, and feedgrain pricing in Australia.

Due to supply pressure, the projected season-average US farm price for corn has been lowered US10c/bushel at both ends of the range, to $3.55 to $4.25 per bushel.

Corn supplies for 2014/15 are projected at a record 15.24 billion bushels with the increase in production partly offset by a 65-million-bushel reduction in beginning stocks.

Corn use for ethanol and exports are raised 45 million bushels and 20 million bushels, respectively, for 2013/14, based on reported data to date.

Projected corn use for 2014/15 is higher, with use for ethanol and exports each raised 25 million bushels, and feed and residual disappearance 50 million bushels higher with the larger crop.

Projected ending stocks for 2014/15 are raised slightly to 1.808 billion bushels.

USDA’s monthly WASDE report includes higher forecasts for corn, sorghum, barley, and oats, for projected 2014/15 US feedgrain supplies:

Corn production for 2014/15 is forecast at 172m bushels higher, at a record 14.032 billion bushels. The first survey-based corn yield  forecast, at a record 167.4 bushels per acre, is up 2.1 bushels from last month’s trend-based projection.

Sorghum production is forecast 19 million bushels higher with the forecast yield 3.0 bushels per acre higher than last month’s projection. Sorghum supplies for 2014/15 are projected 4 million bushels higher as a 15-million-bushel increase in 2013/14 exports lowers 2014/15 beginning stocks, mostly offsetting the higher forecast production. Projected US sorghum exports for 2014/15 are raised 10 million bushels.

Small yield increases also boost barley and oats production slightly, in the latest WASDE report.


Global supplies

Global coarse grain supplies for 2014/15 are projected by USDA at 4.9 million tonnes higher, mostly reflecting larger expected corn crops in the United States and EU and increased barley production for FSU-12. The smaller projected carry-in for the US partly offsets this month’s 6.6MT increase in global coarse grain output. EU corn production is raised 1.4MT, after abundant rainfall and favourable temperatures during July.

FSU-12 barley production is raised 3.1MT with a 2.0MT increase for Russia and smaller increases for Belarus and Ukraine. Barley production is also raised 0.3MT for the EU.

Reduced prospects for corn, sorghum, and millet, with the delayed monsoon, lower India’s total coarse grain production outlook by 2.7MT, partly offsetting increases elsewhere.

Global coarse grain consumption for 2014/15 is raised this month with a 2.3MT increase in world corn use. Higher corn use in the US accounts for most of the increase.






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