U.S. corn production is on track to set another record, according to U.S. Department of Agriculture reports released today, with 2017/18 forecasts indicating both record production and yields. Despite the increased production and ending stocks forecasts, prices are expected to remain in the same range due to increased demand from feed and export markets.
"America's corn farmers continue to face challenging economic conditions, highlighting the incredible importance of growing and supporting markets for the crop we produce so well," said National Corn Growers Association President Kevin Skunes, a farmer from North Dakota. "From growing our ethanol and livestock markets to advancing trade opportunities abroad, whether it be by protecting the Renewable Fuel Standard in Washington or building demand for higher blends of ethanol across the world, NCGA strives to help farmers grow markets for their growing crop.
"Notably, this report demonstrates the importance of the North American Free Trade Agreement in supporting the economic health of America's farmers and rural communities. Despite the record supply projections, increased demand from Mexico helped support prices. While this may not have been the price drive we need today, it is certainly of the utmost importance to avoiding further declines. Without market-opening trade agreements, we might not be in this position in the future."
Production forecasts were raised by 298 million bushels from last months report, with the 2017/18 estimate now a record 14.78 bushels. This increase resulted from increased yield estimates, which now sit at 175.4 bushels per acre. The previous record yield was 174.6 BPA.
Demand from exports, feed and residual markets were both raised by 75 million bushels. Despite increased demand forecasts, ending stocks are projected to be 147 million bushels higher than anticipated a month prior. The prices expected for the crop remain to have an idle range at $3.20 per bushel.