- The USDA expects the 2014 corn crop to average a record 167.4 bushels per acre, although the yield estimate was below what analysts were expecting.
- Demand for U.S. corn this summer has picked up in the most unlikely place, ethanol.
- The August WASDE is special in regards to data retrieval as the USDA switches from a weather input model to a survey-based model.
The USDA expects the 2014 corn crop to average a record 167.4 bushels per acre, although the yield estimate was below what analysts were expecting. Adjusting for corn's 2014/15 record production, the ending stocks-to-use ratio is now estimated at 13.5%, which is the highest in a decade.
Demand for U.S. corn this summer has picked up in the most unlikely place, ethanol. Low corn prices have resulted in attractive margins for U.S. dry mill ethanol plants, causing them to produce more corn based ethanol. Year-to-date domestic gasoline demand has picked up and thus demand for corn based ethanol has risen with it. In addition to increased demand at home, exports have picked up due to production constraints in large ethanol producing countries like Brazil.
The August WASDE is special in regards to data retrieval as the USDA switches from a weather input model to a survey based model.
U.S. corn ending stocks for the 2013/14 marketing year were projected 65 million bushels lower to 1.181 billion bushels, due primarily to increased export and ethanol demand. Exports for U.S. corn in the 2013/14 marketing year were increased by 20 million bushels to 1.920 billion bushels.
For the 2014/15 marketing year, U.S. corn ending stocks were projected to be 1.808 billion bushels due to a consecutive record corn crop. U.S. exports were estimated at 1.725 billion bushels with total usage of 13.435 billion bushels. Projected total production was 14.032 billion bushels, a record if realized. The 2014/15 season-average farm price for corn was estimated at $3.55 to $4.25 per bushel, compared to $4.40 to $4.50 per bushel for 2013/14.
U.S. Ending Stocks (Million Bushels) 2013/14
U.S. Ending Stocks (Million Bushels) 2014/15
U.S. soybean exports for 2013/14 were raised 20 million bushels to 1.640 billion bushels. Ending stocks were unchanged at 140 million bushels. The stocks-to-use ratio remains at a record low of 4.2%.
For the 2014/15 marketing year, U.S. soybean ending stocks were projected to be 430 million bushels. Exports were estimated at 1.675 billion bushels with total usage of 3.451 billion bushels. Projected soybean yield was 45.4 bushels per acre with total production a record 3.816 billion bushels due to increased yields. The 2014/15 season-average farm price for soybeans was estimated at $9.35 to $11.35 per bushel, compared to $13.00 per bushel for 2013/14.
U.S. wheat ending stocks for 2013/14 were increased to 590 million bushels from 583 million bushels. Exports were decreased 9 million bushels to 1.176 billion bushels.
For the 2014/15 marketing year, U.S. wheat ending stocks were projected at 663 million bushels, a 73 million bushel increase from 2013/14 due mainly to lower feed and residual use. The 2014/15 all wheat average price was estimated at $5.80 to $6.80 per bushel.
Grain prices have struggled throughout the summer due to high production expectations domestically and globally. Farmers and the USDA have also been optimistic about the crop condition, which has also been a factor weighing on prices. The harvest for corn and soybeans will begin in six to seven weeks, leaving time for only drought or frost to significantly impact the crop on a large scale. There is still time for production estimates to fall and provide some relief to corn and soybean prices.