Lowered supply projections and increased yield forecasts may bump the price farmers receive for a bushel of corn upward by ten cents according to U.S. Department of Agriculture reports released today. Given the shift was, in large part, due to strong exports, the information reinforces the incredible economic importance of U.S. trade policies that allow for further demand growth.
This report indicated no change to projected production since the month prior. If realized, the yield, projected to 174 bushels per acre, would be the third-highest yield on record.
Beginning stocks projections were lowered to reflect a 75-million-bushel increase in 2017/2018 projected exports to 2.3 billion bushels. If realized, this would be the highest export level since 2007/2008. Notably, April exports hit a record high, surpassing November 1989 which was the best prior month to that point. May exports are expected to remain strong given export inspection data.
The report also indicates that old crop outstanding sales at this point in the marketing year also set a record high.
With an increased use of 50 million bushels projected due to higher demand from the ethanol sector, feed and residual use projections were lowered by 25 million bushels from last month reflecting the increased availability of ethanol coproducts as well as higher projected prices.
As supply projections fell and yield projections rose, ending stocks projections were adjusted downward by 105 million bushels to 1.57 billion bushels. If realized, this would be the lowest level since 2013/2014. The 2018/19 season-average corn price received by farmers is projected to be between $3.40 to $4.40 per bushel, a 10 cent-per-bushel increase from the previous month.