WASDE: '09-'10 U.S. corn production, supplies down; world production, supplies up

By | May 04, 2009
Web exclusive posted May 12, 2009 at 1:40 p.m. CST

In the May 12 World Agricultural Supply and Demand Estimates report, the USDA said the outlook for U.S. corn production for the 2009/10 marketing year is down and lower expected beginning stocks reflect increases in both ethanol corn use and exports for the 2008/09 marketing year. Global corn production for 2009/10 is expected to be the third-highest on record while 2009/10 marketing year beginning stocks are also expected higher.

"The 2009/10 outlook for U.S. feed grains is for slightly lower production, rising use, and tighter ending stocks," the report said. "Corn production for 2009/10 is projected at 12.1 billion bushels, down 11 million bushels from 2008/09 as lower plantings more than offset higher expected yields. Harvested area is projected at 77.8 million acres based on historical abandonment and derived demand for silage. The yield is projected at 155.4 bushels per acre, 1.5 bushels below the 1990-2008 trend based on the slow pace of planting in the eastern Corn Belt as reported in Crop Progress. The projected yield assumes a mid-May planting progress well below the 10-year average and just below last year's delayed progress. Corn supplies, projected at 13.7 billion bushels, are down 35 million from 2008/09. Lower 2009/10 beginning stocks reflect this month's 50-million-bushel increases in both ethanol corn use and exports for 2008/09.

"Total U.S. corn use for 2009/10 is projected up 3 percent from the current year with higher expected food, seed, and industrial (FSI) use and exports more than offsetting a decline in projected feed and residual use," the report continued. "FSI use is projected 7 percent higher with a 350-million-bushel rise in ethanol corn use accounting for most of the increase. Ethanol use, at 4.1 billion bushels, reflects the rising federal biofuels mandate and improved blending incentives as higher gasoline prices increase demand for ethanol. Ethanol producer returns, however, will remain under pressure as excess production capacity weighs on producer margins. Exports are projected up 9 percent as world corn trade and feeding are expected to recover modestly in 2009/10, partly reflecting a reduction in global supplies of low-cost feed quality wheat. Domestic corn feed and residual use is projected down 2 percent with reduced animal numbers and increased availability of distiller's grains. U.S. corn ending stocks for 2009/10 are projected down 28 percent to 1.1 billion bushels as use is expected to exceed production by 470 million bushels. The season-average farm price is projected at $3.70 to $4.50 per bushel compared with the record $4.20 reported for 2007/08 and the $4.10 to $4.30 projected for 2008/09.

"Global coarse grain production for 2009/10 is projected down 16.7 million tons, but world supplies are projected up at 1,265.1 million with a 23.8-million-ton increase in beginning stocks," the report said. "Global corn supplies are projected at 924.7 million tons, 6.5 million higher despite a 2.7-million-ton reduction in output as beginning stocks are up sharply. Global corn production at 785.1 million tons would be the third highest on record. Corn production for 2009/10 is projected higher for Argentina and Brazil, but lower for China, EU-27, and Ukraine. Global production of barley, oats, rye, and sorghum are all projected lower in 2009/10. World coarse grain imports and exports are projected higher with rising trade in corn only partly offset by lower trade in barley. Global coarse grain consumption is projected higher mostly on higher corn consumption. Global corn feeding and food, seed, and industrial use are both expected higher in 2009/10 with growth in foreign feeding and U.S. ethanol production. World corn ending stocks are projected at 128.2 million tons, down 8 percent from 2008/09."