The U.S. corn industry may see lower, but still strong, production according to U.S. Department of Agriculture reports released today. Lower forecast production coupled with somewhat decreased demand results in higher cost projections, with the mid-range projected 40 cents higher than the previous year.
This report, the first forecasting overall U.S. corn supply and demand for the next marketing year, projected lower production with both lower acreage and yields forecast as compared with the previous year. The yield, projected to 174 bushels per acre, is based on a weather-adjust trend assuming that both planting progress and summer weather remain normal in comparison with that seen over the prior thirty years. If realized, it would be the third-highest yield on record. Beginning stocks are projected lower than the prior year and, thus, the total corn supply would be down 675 million bushels from the year before at a total 16.3 billion bushels.
Total corn use is projected to decline slightly in 2018/19, with lower projected domestic use and exports. Growth in the projected demand for corn for use in ethanol and non-ethanol food, seed and industrial uses partly offset declines in the aforementioned areas. Notably, the increased ethanol demand reflects increased gasoline consumption growth expectations.
Ending stocks are expected at lower levels for 2018/19 with 1.68 billion bushels, down 500 million bushels from the year prior. The 2018/19 season-average corn price received by farmers is projected to be between $3.30 to $4.30 per bushel. While this range is wider than that forecast for the year prior, its midpoint is 40 cents higher.