WASDE: 2018-’19 corn production up, ethanol use revised down

By Erin Voegele | July 12, 2018

The USDA has released the July edition of its World Agricultural Supply and Demand Estimates report, increasing its predictions for 2018’19 corn production and revising estimates for the amount of corn going to ethanol production.

The report states this month’s 2018-’19  outlook for corn is for larger suppliers, greater feed and residual use, increased exports, and lower ending stocks. Corn beginning stocks are lowered 75  million bushels as higher forecast exports and food, seed and industrial (FSI) use more than offset lower feed and residual use in 2017-’18.

Increased 2017-’18 exports are based on record-high shipments in May and export inspection data for June. Current outstanding export sales are also record high. The report indicates FSI use is raised as a projected 25-million-bushel increase in the amount of corn used for ethanol, based on reported use to date, is partially offset by a decline in the amount of corn used for glucose and dextrose. Feed and residual use is lower based on indicated disappearance during the first three quarters of the marking year.

For 2018-’19, the USDA said corn production is forecast 190 million bushels higher based on increased planted and harvested areas. The national average corn yield is unchanged at 174 bushels per acre. During June, harvested-area weighted precipitation for the major corn producing states was above normal. While silking is ahead of the recent average for much of the crop, the critical pollination period will be during middle and late July.

Projected feed and residual use for 2018-’19 is raised 75 million bushels, mostly reflecting a larger crop and a forecast reduction in the amount of corn used to produce ethanol. FSI use is lowered 60 million bushels based on a 50-million-bushel reduction in the forecast amount of corn used to produce ethanol, and a 10-million-bushel decline in the amount of corn used for glucose and dextrose. Exports are raised 125 million bushels based on expectations of reduced competition from Argentina, Brazil and Russia. Stocks are lowered 25 million bushels to 1.552 billion. The season-average corn price received by producers is lowered 10 cents at the midpoint for a range of $3.30 to $4.30 per bushel.

Russia corn production is lowered, reflecting reductions in both area and yield. Corn production is raised for the EU, but lowered for Canada. For 2017-’18, Brazil corn production is reduced based on the latest government statistics. Major global trade changes for 2018-’19 include lower corn exports for Russia, more than offset by increased exports for the U.S. Corn imports are raised for South Korea and Saudi Arabia, but lowered for Japan and Mexico. For 2017-’18, corn exports are lowered for Argentina and Brazil. Foreign corn ending stocks are lowered from last month, with the largest declines for China, the EU and Mexico.