Amounts projected for the 2015-16 US corn crop have been reduced, while US soy production has seen a boost, reported the US Department of Agriculture (USDA) in Friday’s release.
“It’s a tweaking of their earlier projections,” said Darrel Good, professor emeritus of agriculture and consumer economics with the University of Illinois. “They increased the estimated size of the soybean crop, and reduced the size of the corn crop about 100m bushels.”
Although the report does predict tighter stocks for the current marketing year, the corn supply appears adequate and shouldn’t generate the price reactions last month’s report generated, he said.
“Last month being the first survey based (report), it often has surprises, and then things tend to quiet down with subsequent reports,” he told FeedNavigator.
The price of corn is expected to see a bump of about 10 cents on both ends for a range of $3.45-$4.05 a bushel, the USDA reported. However, the price of both soybean and soybean meal matches expectations set in the August report. The season average price for soybean is set for $8.40 to $9.90 a bushel and for $310 to $350 for a short ton.
Corn usage on a global scale is expected to drop by about 2.3m tons with lower use in US feed and residuals and a damped expectation of corn feed in the EU, predicts the USDA. However, the drop is likely to be offset by an improved use of barley and wheat feeding in the EU. Global ending stocks are predicted to be about 7.5m tons lower than they were for 2014-15.
Global production and use of soybeans is expected to be down for 2015-16 with reduced soybean production in the Ukraine and Canada.
Global wheat supplies for 2015-16 were raised 6.7m tons. EU wheat yields are significantly better than expected and the 2015 crop is now only 2.3m tons below last year’s record, said the USDA.
World wheat exports are also forecast higher with by far the biggest increase for the EU, which jumps 1.5m tons on the much larger crop.
Meanwhile, global use of wheat is up 1.6m tons on increased feed use, especially in the EU and Russia and the Philippines, said the US agency.
Projected US wheat exports for 2015-16 are lowered 25m bushels to 900m on increased foreign supplies.
US corn outlook
The forecast production for US corn is expected to be about 101m bushels less than predicted in August, with the national average yield dropping to 167.5 bushels per acre – a decrease of 1.3 bushels an acre from the August predictions, according to the WASDE report.
The drop came from a few different places, including lower yields in Kansas, Nebraska and Ohio, said Good. “It reflects new information as the crop becomes more mature,” he added.
Higher use of corn and exports in 2014-15 has resulted in an expectation of lower beginning stocks, the USDA said.
Overall corn usage in 2015 has been lowered by 20m bushels, but is still anticipated to be a “record high,” said the agency. However, feed and residual usage of corn is expected to be down about 25m bushels from the smaller crop, and the expected exports haven’t changed, the report said.
“US ending stocks for 2015-16 are projected 121m bushels lower and 140m bushels below this month’s lowered 2014-15 carryout projection,” the agency said.
US soy production forecasts
Soybean production in the US is expected to be up about 19m bushels from the August report. It is forecast to be around 3,935m bushels, based on the expected yield.
Additionally, the crush is anticipated to increase by 10m bushels from increased domestic disappearance of soybean meal, said the agency. The combination of lower beginning stocks and more usage has reduced the projected ending stocks by 20m bushels to 450m bushels.
Results for 2014-15 also included a bump of 10m bushels for exports and an increase in crush of 25m bushels, the agency reported.
The weather in the US in August was good for soybean growth and development, said Virgil Schmitt, Extension field agronomist with Iowa State University. “We did have a week of hot weather, but the rest of August has been quite moderate and we’ve had good conditions, so the fact that they bumped that up is not surprising,” he said.
Domestic production of sorghum also is expected to have a small increase, said the US agency. It has an expected yield of 74.9 bushels per acre, up from 74.6 bushels per acre in the August projections.
With a lowered projected export rate and increased ending stocks, the price for wheat is expected to drop by 20 cents bringing the current predicted season average farm price range to $4.65 to $5.35 per bushel, said the USDA.
“The reduction reflects increased competition for US wheat and growing domestic stocks,” it added.
The October report may offer a few adjustments in acreage, said Good.
It also may offer additional fine tuning of crop yields, added Schmitt. “We’ll have some combines that will have hit the field and we’ll get a little better ground truth than what we’ve had,” he said.