But new crop yields projections remain consistent with previous forecasts.
The grain outlook report was released on Friday 10 July.
“They [USDA officials] didn’t change the yield for either corn or soybeans, and there was some expectation that they might given all the rain we had,” Rich Llewelyn, extension agricultural economist from Kansas State University (KSU), told Feed Navigator.
The concern was that there has not been enough heat for good corn development and that some of the soybean crop had been underwater.
“A lot of time (with) rain in the summer you’re thinking, ‘This is going to be bad,’ but rain is a better situation than drought,” he said.
Corn and soy expectations
The beginning stocks for corn in 2015/16 are lower based on higher usage this year, the agricultural economist said.
Corn beginning stocks for 2015/16 are down 97 million bushels as increases in 2014/15 feed and residual use, use in ethanol production, and exports more than offset a small increase in imports, said USDA officials in the WASDE report.
They said corn production for 2015/16 is projected down 100 million bushels reflecting the lower planted and harvested areas.
The drop in expected starting stocks is moving possible season average prices to a range of $3.45-$4.05 per bushel, an increase of about 25 cents. However, reportedly corn use in feed is anticipated to drop in 2015/16 with an expectation of its higher cost and of there being larger supplies of distillers’ grains.
“Corn prices will mostly hit the feedlot operators,” said Llewelyn. “Those are the ones hit by the feed prices, but $4 corn beats $6 corn and some of them probably locked in lower prices when they were down.”
New crop production for soybeans is set to be higher by about 35 million bushels mainly based on more area being harvested, said the USDA report. The yield is expected to remain at about 46 bushels an acre.
The amount of soybean crush has been raised by about 15 million bushels based on an increased US use of soybean meal and exports also are projected to go up for 2014/15, with the ending stocks expected to be down about 75 million bushels from previous estimates.
Reportedly, meal prices are projected to increase for the coming year by about $10 a short ton, bringing the price range to $315-$355.
Feed crops, like corn and soybeans, are not reaching short crop situations, said Dan O’Brien, another agricultural economist at Kansas State.
But there are still some questions that need to be answered before a more definite understanding of the upcoming crop yield is possible, he said.
Wheat supplies for 2015/16 have increased by about 58 million bushels based on larger beginning stocks and production, the USDA report said. Although there were decreases in varieties of winter wheat, a better-than-average yield of spring wheat plus a decrease in imports has been predicted to make up the difference.
If the prices continue to differ, there may be some producers who turn to feeding wheat said Llewelyn, but it is unlikely to happen in large amounts. However, some winter wheat could enter the market as an option for feed if the production quality is down.
There has been an increase in the export of some feed crops, like grain sorghum which is finding a market in China, said Llewelyn. There also is the expectation of a larger crop yield for grain sorghum along with oats and barley.
Reportedly, the projected area to be planted for sorghum has increased from 7.9 million acres to 8.8 million acres for 2015-16 and projected exports moving from 335 million bushels to 390 million bushels.