The US Department of Agriculture on Tuesday projected domestic corn stocks at the end of the 2018-19 marketing year at 1.577 billion bushels (40.058 million mt), down 105 million bushels from its May projection and down 525 million bushels from its 2017-18 estimates of 2.102 billion bushels.
If realized, ending corn stocks at 1.577 billion bushels would be the lowest level since the 2013-14 marketing year, USDA said.
USDA domestic corn stocks estimates, for both marketing years, were below analysts’ expectations, sources said.
“This month’s 2018/19 US corn outlook is for reduced beginning stocks, lower feed and residual use, greater corn used for ethanol production, and lower ending stocks,” USDA said. “Beginning stocks are down largely reflecting a 75 million-bushel increase in projected exports for 2017/18 to 2.300 billion bushels, which if realized would be the highest since 2007/08.”
The estimates of US corn to be used for ethanol production in the 2018-19 marketing year was at 5.675 billion bushels, from 5.575 billion bushels in the previous marketing year.
The projection of US corn to be exported in the 2018-19 marketing year was at 2.100 billion bushels, from 2.300 billion bushels in the previous marketing year. The estimates of US corn to be exported in the 2017-18 marketing year was 75 million bushels higher from last month’s report.
“Exports during the month of April were record high, besting the prior monthly shipment record set in November 1989,” the USDA added. “Export inspection data for the month of May implies continued robust global demand for US corn, while old crop outstanding sales at this point in the marketing year are record high.” The projection for the 2018-19 marketing year foresees 35% of the next season’s corn supply going towards production of ethanol and byproducts, while 13% would be exported, the data showed.
The USDA estimated the global corn ending stocks at 154.69 million mt, down 4.46 million from its May estimate and 38 million mt lower than its 2017-18 estimates of 192.69 million mt.
USDA world corn stocks estimates, for both marketing years, were within the lower range of analysts’ expectations, sources said.
“Major global trade changes for 2018/19 include lower forecast corn exports for Russia, with reductions in corn imports for Vietnam, Iran, and Algeria,” the USDA said. “Foreign corn ending stocks are lowered from last month, mostly reflecting reductions for the EU, Brazil, and Vietnam that more than offset increases for Ukraine and South Africa.”
USDA is projecting a 10-cent rise in its US midpoint season-average farm price for the 2018-2019 marketing year to $3.90/bushel, the agency said.
Corn is the primary feedstock for ethanol production in the US and is the main competitor for dried distillers grains.