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Corn Estimates From October WASDE Report

Oct 30, 2014

Kim Dillivan

Crops Business Management Field Specialist

Crops Business Management Field Specialist

On October 10, the World Agricultural Outlook Board released the World Agricultural Supply and Demand Estimates (WASDE) report for October. The WASDE report provides U.S. and world supply and demand estimates for major grains, oilseeds and oilseed products, and cotton; and U.S. supply and demand estimates for sugar and livestock products. For corn stocks, the October WASDE report contains estimates from the September Grain Stocks report. Corn production estimates in the latest WASDE report are taken from the October NASS Crop Production report.
U.S. Corn Production

In early October, USDA forecasted a higher average corn yield and a record U.S. corn crop for the 2014/15 marketing year. The U.S. yield was raised to 174.2 bushels per acre for 2014/15, up from 171.7 bushels per acre in the September report. Average U.S. corn yield in 2013/14 was estimated to be 158.8 bushels and a yield of only 123.4 bushels per acre was reported in 2012/13. U.S. harvested corn acres for 2014/15 were at 83.1 million in early October, down from 83.8 million acres estimated in September and 87.7 million acres in 2013/14. However, for 2014/15, the larger average corn yield more than compensates for the reduction in acres resulting in an overall increase in U.S. corn production.

Corn production for the 2014/15 marketing year was projected at 14.5 billion bushels in October, up 80 million bushels from the September forecast (Figure 1). As of October, current-year U.S. corn production is projected to be 3.9% larger than production in 2013/14 and 34.3% greater than production in 2012/13. As a result of larger supply with only a slight increase in projected use, domestic average corn price for 2014/15 was lower in the October report compared to September.

Like the national average soybean price, domestic corn price has been falling since 2012. According to USDA, national average market price for corn in marketing year 2014/15 will be from $3.10 to $3.70 per bushel. In September, USDA forecasted an average U.S. corn market price of $3.20 to $3.80 per bushel for the year. Estimated average price for domestic corn was $4.46 and $6.89 per bushel in 2013/14 and 2012/13, respectively.

Figure 1. U.S. Corn Production

World Corn Production

October’s WASDE projection for world corn production was 990.7 million metric tons (MMT) in marketing year 2014/15, up slightly from September’s estimate of 987.5 MMT. The production estimate in October was 0.2% greater than production from the 2013/14 marketing year, and 14.0% larger than production from 2012/13.

Country-specific production estimates include those from Brazil, Argentina, and Ukraine (Figure 2). As of October, Brazil’s production from 2013/14 to 2014/15 is expected to decrease 5.4% (from 79.3 to 75.0 MMT). Argentina’s production is also expected to decrease - 8.0% lower in 2014/15 compared to 2013/14. Ukraine is projected to produce 25.0 MMT of corn in marketing year 2014/15, compared to 30.9 and 20.9 MMT in 2013/14 and 2012/13, respectively. All of these countries trail the U.S. in corn production. For example the U.S. produced 273.8 MMT in 2012/13 and 353.7 MMT in 2013/14. According to the October WASDE report, the U.S. will produce 367.7 MMT of corn in 2014/15.

Brazil, Argentina, and Ukraine export 25 to 50% of their production in any given year. By comparison, the U.S. exports only 10 to 15% of domestic production annually. However, the U.S. is usually the world’s largest (by volume) exporter of corn. In 2014/15 the U.S. is projected to export 44.4 MMT of corn, followed by Brazil, Ukraine, and Argentina at 20.0, 16.0, and 14.0 MMT, respectively.

Figure 2. World Corn Production – Select Countries



Several other countries and regions that typically produce significant amounts of corn include China, the EU, Southeast Asia, Mexico, and Canada. However, all of these countries consume most of their domestic corn production and have little remaining for export.


U.S. Corn Use and Stocks

In October, forecasted exports of U.S. corn for 2014/15 were unchanged from September’s estimate (44.4 MMT). If these exports are realized, they will be slightly below levels from 2013/14 (48.7 MMT), but significantly greater than exports from 2012/13 (18.5 MMT). U.S. ending corn stocks are projected to be 52.8 MMT in 2014/15, up from 31.4 and 20.8 MMT in 2013/14 and 2012/13, respectively. USDA is forecasting the U.S. corn stocks-to-use ratio at 15.2% for 2014/15. This compares to a stocks-to-use ratio of 9.1% for 2013/14 and 7.4% for 2012/13.


Source:igrow.org