U.S. 2015/16 corn exports are projected down 50 million bushels to 1,750 million. The very slow pace of shipments in October and November support a reduced forecast even though U.S. export quotes have become more competitive in recent weeks and export sales are expected to increase. Brazil has been exporting corn at a record pace this fall. Projected 2015/16 world coarse grain production, use, and ending stocks are reduced slightly this month, but forecast global ending stocks are still the largest in 28 years.
U.S. domestic demand for corn is relatively robust, with an increase in projected corn use for ethanol of 25 million bushels due to recent production trends. While the U.S. corn farm price forecast is unchanged this month with a midpoint of $3.65 per bushel, the sorghum midpoint price forecast is down 10 cents to $3.50 per bushel. This reflects interior cash quotes that have a significant discount for sorghum relative to corn where most of the sorghum is grown.
Domestic Outlook
Projected Domestic Feed Grain Use Increased, Exports Reduced
This month’s U.S. feed grain supply forecast is nearly unchanged. Imports for 2015/16 are increased just 5,000 metric tons, with higher sorghum and lower barley being forecast. Beginning stocks and production are unchanged. Total supplies are raised to 417.6 million metric tons, 3.1 million higher than in 2014/15. Projected feed grain use is forecast at 367.8 million tons, down 0.7 million this month due to reduced exports partly offset by higher corn use in ethanol production.
The feed and residual forecast is unchanged at 140.7 million tons. Projected total disappearance is 0.2 million tons greater than that in 2014/15. At 49.8 million tons, forecast ending stocks are raised 0.7 million tons this month. Compared with 2014/15, ending stocks are forecast up 2.9 million tons.
USDA’s National Agriculture Statistics Service will release final estimates for 2015 U.S. feed grain production on January 12, 2016, along with estimates of the December 1, 2015, grain stocks. Those supply and use updates will be reflected in next month’s Feed Outlook.
Feed Use
U.S. feed and residual use during the 2015/16 September-August marketing year for the four feed grains plus wheat is unchanged from last month’s projection at 145.8 million metric tons, 2.1 million tons higher than the 2014/15 level of 143.7 million. Corn is projected to account for 92 percent of total feeding in 2015/16, down from the 2014/15 estimate of 94 percent. In 2015/16, feed and residual use of sorghum, barley, and wheat are all expected to increase.
The 2015/16 projected index of grain-consuming animal units (GCAUs) is 94.6, down from 95.1 last month and above the 93.2 for 2014/15. Feed grain used per GCAU is 1.54 tons, 0.01 higher than last month’s figure. In the index components, GCAUs decreased slightly for cattle on feed.
Corn Use for Ethanol Up, Exports Down
U.S. corn supplies for 2015/16 are unchanged from last month’s projection of 15,415 million bushels. Projected 2015/16 corn use is lowered as a 50-millionbushel decline in the export forecast is partially offset by a 25-million increase in corn used for ethanol. Ending stocks are projected at 1,785 million bushels, 25 million over last month’s projection and 54 million higher than in 2014/15.
Projected corn food, seed, and industrial (FSI) use is raised 25 million bushels above last month’s projection to 6,580 million based on increased prospects for corn use for ethanol. Weekly production in November and Energy Information Agency (EIA) forecasts suggest higher-than-expected ethanol production. For the 2015/16 corn September-August marketing year, EIA forecast U.S. gasoline consumption higher in its December Short-term Energy Outlook, supporting a higher outlook for ethanol and corn use. Other corn FSI use categories are unchanged.
U.S. corn export prospects for 2015/16 are cut 50 million bushels to 1,750 million due to the very sluggish pace of exports in recent weeks. The reduced outlook for export demand more than offsets higher expected domestic use, resulting in the raised projection for 2015/16 carryout stocks.
Corn Price Steady, Range Narrowed
Farm corn price expectations for 2015/16 are unchanged from last month as both the high and low ends of the range remain at $3.35 to $3.95 per bushel, respectively, for a midpoint of $3.65 per bushel. The 2014/15 season-average farm price was $3.70 per bushel.
Sorghum Imports Slightly Higher, Price Lower This Month
U.S. Census data through October indicate that U.S. sorghum imports for the 2015/16 marketing year have reached 1.8 million bushels, 1.1 million greater than last month. The gain in imports is due to a shipment of just over 1 million bushels from Argentina to the U.S. southeast for feed use.
With Argentine sorghum selling at a discount to U.S. feed grain supplies, and relatively low ocean freight rates, opportunities have arisen to ship grain from Argentina rather than by rail from the eastern Corn Belt. Last summer’s excessive rains also reduced U.S. yields and trimmed available supplies of corn in some of the areas from which southeastern feeders routinely source rail-origin corn.
With no changes in sorghum use from last month’s projection, the small increase in supply translates to a 1.1-million-bushel increase in projected ending stocks.
Reflecting discounts for sorghum in Kansas, increased supplies, and uncertainty in export markets, the sorghum farm price for 2015/16 is projected down $0.10 on both the high and low end of the range to $3.20-$3.80 per bushel, with a midpoint of $3.50 per bushel. The 2014/15 season-average price is $4.03 per bushel.
Barley Stocks Edge Up on Reduced Exports, Oats Steady
Projected 2015/16 barley supplies are reduced slightly on an incremental reduction in imports. The 1-million-bushel cut in imports to 17 million is based on the slow pace of Canadian barley shipments to the United States. However, the pace of U.S. barley exports is also sluggish, supporting a 2-million-bushel cut in projected exports to 10 million bushels.
With exports cut more than imports, ending stocks are raised 1 million bushels to 97 million. Otherwise, supply and use categories for barley are unchanged from last month. For the 2015/16 marketing year, the season-average farm price range for barley is narrowed $0.05 on each end to $4.90 and $5.50.
There are no changes this month in the oats balance sheet or farm price forecast.
