WASDE: USDA Lowers 2015 Corn Production

The U.S. Department of Agriculture (USDA) has released its latest World Agricultural Supply and Demand Estimates report on May 12.

According to the report the department projects U.S. corn production to be 13.6 billion bushels – down 586 million bushels from the record 2014/2015 crop due to a smaller forecasted area planted and lower forecasted yields. In addition, the average U.S. corn yield is forecast to be 166.8 bushels per acre – down 4.2 bushels per acre from the 2014/15 record. So far, the 2015 yield projection is not raised higher despite the rapid pace of spring planting because variability in corn yield is 90% affected by Midwest temperatures and July precipitation – which remain unknown at this time.

Additional data released in the report reflecting corn uses and supplies for 2015/16 are:

U.S. corn use for 2015/16 is estimated to be a record 13.8 billion bushels. Specific uses for corn are expected as follows:
Feed and residual use for 2015/16 is forecast to be 50 million bushels higher this year on higher livestock numbers.
Corn use for ethanol is forecast to remain unchanged from last year as gasoline consumption will remain flat.
Corn supplies for 2015/16 are forecast to be a record 15.5 billion bushels – up slightly over last year.

Lower prices and an increase in global corn demand will drive gains in U.S. corn exports for 2015/16, but because supplies are high among all corn producing countries, the U.S.’s share of the global market will likely be limited. U.S. corn exports for 2015/16 are forecast to be 75 million bushels higher year on year, and the 2014/15 projection was also raised by 25 million bushels in this report. Corn ending stocks in the U.S. for 2015/16 are estimated to be 1.7 billion bushels – down 105 million bushels from the 2014/15 estimate, and the average corn price for the season is forecast to be $3.20 - $3.80 per bushel.

Globally, declines in corn production for the season are also forecast for Brazil, the EU, Ukraine, and Mexico, while South Africa, Canada, Russia, Argentina, and China are all expected to see increases in production, with China seeing an increase of 12.3 million tons.

Global corn consumption for 2015/16 is projected to be a record 990.4 million tons – up 13 million tons over 2014/15, with noticeable increases in consumption in China, Brazil, Saudi Arabia, Argentina, Egypt, Canada, India, Indonesia, Iran, and Mexico. And global corn ending stocks for 2015/16 are estimated to be 191.9 million tons – down 0.6 million tons from last year.