The June 30 National Agricultural Statistics Service Acreage report forecasts corn harvested acreage for 2016 at 86.6 million acres, 650,000 acres higher than projected in the June 12 WASDE report. The projected yield is unchanged at 168.0 bushels per acre. If realized, the crop would reach 14,540 million bushels, 110 million bushels above last month’s projection and 939 million over last year’s crop.
Projected ending stocks for 2016/17 are raised as the larger supplies more than offset increased prospects for use. The projected 2016/17 farm price range for corn is lowered 10 cents on both ends for a midpoint of $3.40 per bushel. The 2015/16 forecast midpoint price is reduced 5 cents to $3.65 per bushel.
Domestic Outlook
U.S. Feed Grain Supplies Projected Slightly Higher for 2016/17
U.S. feed grain production is raised 3.0 million metric tons this month due to raised prospects for corn, sorghum, and oats production with higher forecast acreage. The June 30 Acreage report from USDA’s National Agricultural Statistics Service (NASS) forecast combined feed grain harvest area up 0.8 million acres from the June 10 WASDE projection. The feed grain yield average for 2016/17 is unchanged from last month’s projection.
The feed grain yield average for 2016/17 is unchanged from last month’s projection, reflecting trend yield projections for corn and sorghum and nearly unchanged yields for barley and oats in the July 12 Crop Production report, the average feed grain yield for 2016/17 is unchanged from last month’s projection.
Total feed grain production is expected at 385.1 million tons, compared with 366.6 million in 2015.
With lower beginning stocks, supplies for 2016/17 are up 2.7 million tons to 435.6 million. Feed grain supplies for 2015/16 are estimated at 417.1 million tons, 18.5 million below the 2016/17 projection.
Reductions in 2016/17 projected domestic feed grain use are more than offset by higher expected exports this month. Feed and residual use for 2016/17 is lowered 1.3 million tons to 144.9 million. Food, seed, and industrial (FSI) use is lowered 0.5 million tons reflecting reduced use of corn for ethanol production. With feed grain exports up 2.5 million tons to 58.0 million, total use advances 0.8 million tons to 378.8 million, 9.2 million higher than 2015/16.
Feed and Residual Use for the Four Feed Grains and Wheat Projected at 151.7 Million Metric Tons for 2016/17
Projected 2016/17 feed and residual use for the four feed grains and wheat on a September-August marketing year is raised to 151.7 million metric tons from last month’s 149.0 million. The increase is a result of higher wheat feed and residual use offset partly by lower corn feed and residual use.
Grain consuming animal units (GCAUs) for 2016/17 are projected at 95.1 million units this month, down slightly from 95.3 million last month. Feed and residual use per GCAU is projected at 1.60 tons per GCAU this month, up from last month’s 1.56 tons per GCAU. For 2015/16, GCAUs are revised from last month’s 93.23 million to 93.80 million on higher reported cattle inventory numbers.
U.S. Corn Production Raised 110 Million Bushels for 2016/17
The June 30 Acreage report pegged corn planted area at 94.1 million acres, 547,000 higher than reported in the March 31 Prospective Plantings report. The Acreage report also forecast harvested acreage at 86.6 million acres, 650,000 acres above the June 12 WASDE projection, which was based on historical rates of abandonment and use for silage.
Compared to the 2015 crop, total acreage harvested for grain is projected up 5.8 million acres, an increase of 7 percent. The largest increase is in the Plains, followed by the Corn Belt. No region reported a decline in expected harvested acreage.
The national average corn yield for 2016 is projected at 168.0 bushels per acre based on a weather-adjusted trend model. If realized, the crop would reach 14,540 million bushels, 110 million above last month’s projection and 939 million over last year’s crop, besting the record 2014 crop by 324 million bushels.
June 1 Corn Stocks Higher Than Anticipated
The NASS June 30 Grain Stocks report pegged June 1 corn stocks at 4,722 million bushels, about 200 million bushels higher than pre-report trade expectations. Corn feed and residual use is projected 50 million bushels lower for 2015/17, reflecting the lower-than-expected March-May disappearance indicated by the stocks estimate. FSI use is also lowered, with reduced use expected for ethanol production.
More than offsetting these usage reductions is a 75-million-bushel increase in projected exports. Total use for 2015/16 is projected at 13,692 million bushels, 56 million below 2014/15. The resulting projected carryout for 2015/16 is 1,701 million bushels, 7 million lower than last month’s projection.
For 2016/17, total disappearance is projected at 14,200 million bushels, 30 million higher than last month. A 50-million-bushel reduction in projected feed and residual use combined with a 20-million-bushel reduction in expected FSI use lowers domestic use by 70 million bushels.
A 25-million-bushel decline in projected corn use for ethanol is partly offset by an increase in corn used for seed. Exports are projected 100 million bushels higher than last month at 2,050 million, raising total use by 30 million.
Feed and residual for the first three quarters (September-May) of 2015/16 is reported at 4,550 million bushels, 5 percent below last season’s level and 87 percent of the projected year-end total of 5,200 million. In 2014/15, the September-May period accounted for 90 percent of feed and residual use and the 5-year average for 2010/11 through 2014/15 was 92 percent of the marketing year total.
Feed and residual use during the final quarter (June-August) of 2015/16 is expected to be similar to the final quarter of 2008/09, when 13 percent of total marketing year feed and residual use occurred.
Total corn use for September-May of 2015/16 is estimated at 10,661 million bushels, down from 11,015 million in 2014/15. The feed and residual share of total use for the first three quarters was unchanged on the year at 43 percent.
Projected Food, Seed, and Industrial Use Lowered
Projected 2015/16 corn used for ethanol is reduced 25 million bushels this month to 5,225 million, reflecting the latest data from the Grain Crushings and Co-Products Production report. A partly offsetting increase in corn used for seed results in total FSI use of 6,592 million bushels, down 18 million from last month. For 2016/17, projected FSI use is reduced 20 million bushels to 6,650 million, with lower projected corn use for ethanol also partly offset by higher expected seed use.
Historical Seed Use Revised Higher
Seed use calculations have been revised beginning with the 1996 crop, which is reflected in usage starting with the 1995/96 marketing year. The new seed use estimates are based on plant populations provided by the NASS objective yield survey and more accurately reflect seed use then the seeding rate, which has not been updated in recent years due to the lack of survey-based seed use data. The new seed use estimates can be accessed through ERS’s Feed Grains Database.
Corn Exports Raised
Projected corn exports are raised 75 million bushels to 1,900 million for 2015/16. Competitiveness of U.S. corn on the world market has been enhanced by reduced crop prospects and tightening supplies in Brazil. For 2016/17, exports are raised 100 million bushels to 2,050 million. If realized, this would be the highest export level since 2007, when exports totaled 2,437 million bushels.
Projected Prices Lowered
The forecast farm price for 2015/16 is lowered 10 cents on the high end of the range, giving a midpoint price of $3.65 per bushel. The projected farm price range for 2016/17 is lowered by 10 cents per bushel on both the high and low ends for a midpoint price of $3.40 per bushel, reflecting increased supplies due to the higher expected production and the increased carryout projection.
Sorghum Production Outlook Raised, Prices Projected Lower With Corn
The Acreage report set 2016 sorghum planted acreage slightly higher than the March intentions at 7.2 million acres. Harvested area was pegged at 6.5 million acres, 196,000 greater than the June WASDE projection, which was based on historical harvested-to-planted ratios.
For 2015/16, projected sorghum feed and residual use is raised 10 million bushels to 110 million, based on indicated March-May usage from the June 1 stocks estimate. Total use is projected at 575 million bushels, reducing expected carryout 10 million bushels to 45 million.
Supplies for 2016/17 are raised 3 million bushels as lower carryin is more than offset by higher production resulting from the larger harvested area projection. Sorghum production is projected at 420 million bushels. With a projected 1 million bushels of imports, total supply is expected at 466 million.
The June 30 Grain Stocks report provides a survey-based estimate of sorghum stocks, both on- and off-farms, as of June 1, 2016. A total of 88.3 million bushels were held in all positions on June 1. This compares to the 34.3 million bushels held on the same date a year earlier. The large 2015 crop combined with slowing demand from China has resulted in the stocks buildup.
The farm price range for sorghum in 2015/16 is narrowed 5 cents on each end to $3.25 to $3.35 per bushel for an unchanged midpoint of $3.30 per bushel. For 2016/17, the high and low ends of the range are each lowered 10 cents to $2.85 to $3.45 per bushel for a midpoint of $3.15 per bushel. The lowered price outlook reflects the general trend in feed grain prices driven by larger expected supplies of corn.
Barley Acreage and Yield Lowered
The Acreage report lowered planted area for barley from producer intentions reported in March. Planted area was lowered 173,000 acres, and harvest area was forecast 142,000 acres lower than in the June WASDE, at 2.6 million. Harvested area was 3.1 million acres in 2015/16. Lower area combined with a 0.1-bushelper- acre decline in yield in the July 12 Crop Production report put forecast barley production for 2016/17 at 183 million bushels, 10 million below last month’s projection and 32 million below 2015/16.
The June 30 Grain Stocks report provides a survey-based estimate of barley stocks, both on- and off-farms, as of June 1, 2016. A total of 102 million bushels were held in all positions on June 1, compared with 79 million at this point last year.
Moderated by higher beginning stocks, 2016/17 supply is lowered 7 million bushels to 305 million, 6 million below 2015/16. The decline in supply is carried through the balance sheet to carryout, which is projected at 87 million bushels.
For 2015/16, lower estimated imports reduce supply by 1 million bushels to 311 million. On the demand side, lower feed and residual use, seed use, and exports dampen total use by 5 million bushels to 209 million.
The 2016/17 farm price forecast for barley is lowered 10 cents on both the low and high ends of the range to $4.30 and $5.10 per bushel, respectively. The resultant midpoint is $4.70 per bushel. For 2015/16, the barley price is estimated at $5.52 per bushel, 2 cents lower than the previous month’s forecast.
Oats Supply Projected Higher on Production Increase
The June 30 Acreage report raised oats planted and harvested acreage for 2016/17. Planted area was reported 276,000 acres higher than March intentions. Harvested area was forecast 135,000 acres higher than in the June WASDE, at 1.2 million. With a 0.2-bushel-per-acre reduction in yield forecast in the July 12 Crop
Production report, oats production is expected up 9 million bushels, boosting supply 7 million bushels to 228 million. With no changes on the demand side for 2016/17, total use is projected the same as last month, at 170 million bushels.
The June 30 Grain Stocks report provides a survey-based estimate of oats stocks, both on- and off-farms, as of June 1, 2016. A total of 57 million bushels were held in all positions on June 1, compared with 54 million at this point last year.
The 2016/17 farm price forecast for oats is lowered 5 cents on both the low and high ends of the range to $1.75 and $2.15 per bushel, respectively, putting the midpoint of the projected range at $1.95 per bushel. For 2015/16, the oats price is estimated at $2.12 per bushel, 3 cents lower than the previous month’s forecast.
All Hay Harvested Area Recovers in 2016
The June Acreage report indicates that producers intend to harvest more hay in 2016 than in 2015 and more than was indicated in the March Prospective Plantings report. Across all hay varieties, U.S. producers plan to harvest 56.1 million acres of hay, up from 54.4 million in 2015. Increases in the harvested area for both alfalfa (alfalfa and alfalfa mixtures) and other hay are projected. In California, hay harvest area recovers from drought conditions. Other major States such as Missouri, Montana, Texas, and Oklahoma also saw increased acreage projections.
