USDA Lowers Corn Projections Slightly, Ups Corn Use Estimate

USDA is still projecting a record corn crop, but just not quite as big, reducing its forecast by 68 million bushels in the Nov. 10 World Agricultural Supply and Demand Estimates. Corn production is now forecast at a record 14.407 billion bushels, with an average yield of 173.4 bushels per acre, down 0.8 bushels from last month’s report. The agency also boosted its projection for ethanol use by 25 million bushels to 5.150 billion, compared to 5.134 estimated for last year, due to expected lower sorghum use for ethanol and “the strong pace of weekly ethanol production reported so far for the marketing year.”

Overall U.S. corn use for 2014/15 is projected slightly higher with a 5-million-bushel increase in expected food, seed, and industrial (FSI) use. Mostly offsetting the projected increase in ethanol use is a 20-million-bushel reduction in other food and industrial use. Projected corn ending stocks are lowered 73 million bushels. The projected range for the season-average farm corn price is raised 10 cents on each end to $3.20 to $3.80 per bushel.

Sorghum exports for 2014/15 are projected 10 million bushels higher on continued strong demand. Higher sorghum prices, driven by the strong pace of export sales and shipments, reduce the attractiveness of sorghum used in ethanol production and drive this month’s reduction in projected sorghum FSI use, even as sorghum production is raised 4 million bushels with a higher forecast yield. Sorghum feed and residual use is raised 5 million bushels with the increase in production. The projected sorghum season-average farm price range is raised 20 cents on each end to $3.15 to $3.75 per bushel.

Global coarse grain supplies for 2014/15 are projected 1.6 million tons higher as the U.S. reduction is more than offset by higher foreign output. Foreign corn production is raised 1.4 million tons with increases for EU, Ukraine, and Mexico more than offsetting reductions for China and Kenya. Sorghum production is raised for Mexico, but lowered for Argentina, leaving foreign production up slightly.