Total U.S. corn supply for 2017/18 is projected at 16.4 billion bushels, compared with 16.9 billion in 2016/17. Corn acreage is projected at 90.0 acres, down 4 million from last year.
Corn food, seed, and industrial (FSI) use in 2017/18 is projected 80 million bushels over last year at 7.0 billion, with increases in corn for ethanol, high fructose corn syrup, and starch. This increase is offset by a 75-million-bushel decrease in projected feed and residual to5.40 billion.
Exports are projected down 350 million bushels to 1.9 billion for total use at 14.3 billion. Ending stocks, while still high, are down 185 million bushels to 2.1 billion.
The forecast 2017/18 average price received by farmers is unchanged at $3.40 per bushel.
Domestic Outlook
Feed Grain Supplies Lower But Still Second Highest on Record
Projected U.S. 2017/18 feed grain supplies are 4 percent below last year’s at 435.7 million metric tons but are still the second highest ever after the 2016 crop. Beginning stocks are higher than those in 2016/17, at 62.3 million tons, and imports are nearly unchanged.
Production of 370.1 million tons is projected 32.1 million tons below last year. The smaller expected crop is partially due to a decline in yields and some producers switching to soybeans from corn in response to relatively low corn prices.
Feed and Residual Use
Projected U.S. 2017/18 feed and residual use for the four feed grains (corn, sorghum, barley, and oats) and wheat is 146.9 million metric tons this month, 4.6 million lower than last year’s 151.5 million on a September-August marketing-year basis.
Feed and residual per grain consuming animal unit (GCAU) is projected at 1.52 tons per GCAU, 0.06 tons below last year’s estimated 1.58 tons.
Grain Consuming Animal Units Projected Higher
Grain consuming animal units for 2017/18 are initially projected at 97.0 million units, compared with 96.0 million units last year, driven largely by increasing hog and poultry numbers. Feed and residual use per GCAU is projected at 1.51 tons per GCAU, 0.14 tons per GCAU lower than 2016/17.
New-Crop Corn Production Forecast 7 percent Below Last Year, Supplies Down
Projected U.S. 2017/18 corn production is down 7 percent from last year to 14,065 million bushels but is still the third highest ever after the 2016 and 2014 crops. Planted area is projected at 90.0 million acres, 4 million below last season.
Harvested area, after adjusting for silage production and losses, is expected to reach 82.4 million acres. A weather-adjusted trend yield (based on normal planting progress and summer weather) of 170.7 bushels per acre results in a 1,083-million bushel decline in crop size.
Beginning stocks of 2,295 million bushels are the highest since 1988/89. Adding production and imports results in the second largest supply on record–16,410 million bushels.
As of May 7, 47 percent of the crop had been planted in the major producing States according to USDA’s National Agricultural Statistics Service (NASS) Crop Progress report. This is below the 5-year average of 52 percent and well short of last year’s faster start when 61 percent was planted.
In Iowa, the leading producing State, plantings were 52 percent complete, compared with the average of 55 percent. However, in the eastern Corn Belt, plantings were ahead of the normal pace in spite of recent heavy rains.
Corn emergence is also behind normal. In the 18 States surveyed by NASS, 15 percent of the crop had emerged as of May 7, compared with 25 percent for the 2016 crop at this point. Average emergence for 2012-16 was 19 percent at this point.
In Iowa, the largest corn-producing State, emergence was 7 percent, 18 percent below last year at this time and 8 percent behind the 5-year average.
Sorghum production is projected to decrease 31 percent to 331 million bushels, based on harvested area of 4.9 million acres and a projected yield of 67.1 bushels per acre assuming normal growing conditions. The crop is 149 million bushels smaller than last year’s on an acreage reduction of 0.9 million acres and a yield decline of 10.8 bushels per acre.
As of May 7, 30 percent of the crop had been planted in the major producing States, on track with the average and just ahead of last year when 29 percent was planted.
In Texas, the leading producing State, plantings were 76 percent complete compared with the average of 69 percent. Sorghum planting in Kansas, the second largest producing State, are barely under way at 1 percent. Rainfall slowed planting progress in the lower Mississippi Valley.
Barley production is projected at 159 million bushels, down 20 percent from 2016/17. The average barley yield is projected at 72.6 bushels per acre, based on the 1990-2016 trend, down from 77.9 bushels last year.
Planted acres are expected to fall 0.6 million acres from a year earlier, the lowest since USDA began reporting planted barley acres in 1929. Harvested acres, based on historical average harvested-to-planted ratios, is projected at 2.2 million acres.
Barley prices are projected the lowest since 2010, as prices for competing spring wheat and other feed grains are also relatively low, limiting gains.
As of May 8, 53 percent of the barley crop had been planted in the major producing States, well behind the 5-year average of 68 percent and well behind last year when 76 percent was planted. In Idaho, the leading producing State, plantings were 73 percent complete compared with the average of 89 percent.
Barley planting in North Dakota, the second largest producing State, reached 39 percent this week, while those in the third largest producing State, Montana were 52 percent behind the normal pace.
Oats production is projected at 67 million bushels, up 1.6 million from 2016/17. Planted acres are expected to decline to 2.7 million acres, the lowest since 2014/15, continuing the long-term downtrend.
Harvested acres, based on historical average harvested-to-planted ratios, is projected at 1 million acres, up slightly. The average yield, based on the 1990-2016 trend, is projected to rise slightly to 67.0 bushels per acre from 66.0 bushels last year.
As of May 8, 79 percent of the oat crop had been planted in the major producing States, right at the 5-year average. In South Dakota, the leading producing State, plantings were 94 percent complete, compared with the average of 82 percent. Planting in North Dakota, the second largest producing State, reached 48 percent this week.
Corn for Ethanol Boosts Food, Seed, and Industrial Use in 2017/18
Corn use to produce fuel ethanol in 2017/18 is projected 50 million bushels higher than that in 2016/17 at 5,500 million bushels. The increase is supported by higher gasoline consumption on a crop-year basis; continued strong export prospects for Brazil, India, the Philippines, and the United Arab Emirates; and lower sorghum use for ethanol production.
In addition, the U.S. Energy Information Administration (EIA) projects sideways retail gasoline prices and increased vehicle miles driven for the period. Along with the increase in ethanol is a 10 million-bushel increase in corn for high fructose corn syrup to 490 million bushels based on continued demand in the food manufacturing industry.
Corn for glucose and dextrose is projected 10 million bushels higher as use for synthetic polymers, vitamins, and manufacturing products such as cups, caps, paper coatings, fabrics, and carpets expands.
A 5-million-bushel increase in corn used for starch is supported by an upward trend in housing starts, which boosts drywall production, and use for paper products as the economy expands.
Combined with small increases in corn used for beverage and manufacturing and cereals and other products, projected FSI corn use is projected at 7,000 million bushels, 80 million greater than the forecast for 2016/17.
Corn Exports Slip in 2017/18
U.S. corn exports are projected to decrease 350 million bushels in September-August 2017/18 to 1,875 million. Competitor corn shipments in Brazil and Argentina are forecast to rise sharply for the local marketing year 2016/17 (March 2017 to February 2018), dampening U.S. prospects. So far this marketing year, the major buyers of U.S. corn have been Mexico, Japan, South Korea and Colombia.
Brazil, Argentina, and the Ukraine, major competitors in the global corn market, are projected to ship 1.4 billion bushels more corn this year than last, increasing pressure on U.S. exports.
Feed and Residual Use Down for Out Year
Corn feed and residual use for 2017/18 is projected at 5,425 million bushels, 75 million below the 2016/17 estimate of 5,500 million. Reduced supplies and higher FSI use (offset lower exports) are behind the decline.
Projected Corn Price Unchanged From Last Year
The projected range for the 2017/18 season-average corn price received by farmers is $3.00 to $3.80 per bushel, leaving the midpoint unchanged from last year at $3.40 per bushel.
2016/17 Use Increases on Higher FSI
For 2016/17, corn for FSI use is projected at 6,920 million bushels, 25 million higher than April’s projection, due to an increase in projected corn used to produce glucose and dextrose. Total FSI is now projected at 6,920 million bushels, and total use is raised to 14,645 million bushels. As a result, 2016/17 ending stocks are reduced 25 million bushels to 2,295 million.
Sorghum Use Declines
Total 2017/18 U.S. sorghum use is projected down 115 million bushels from last year to 355 million. Feed and residual is lowered 75 million bushels to 55 million on the downturn in production. FSI use is projected down 15 million bushels, also due to the short crop and the price relationship to corn, both of which discourage grinding sorghum for ethanol.
U.S. sorghum exports are projected to decrease 25 million bushels in 2017/18 to 200 million due to tightening supplies caused primarily by lower production. In addition, China is not expected to be a large buyer as it has been in past years. Sorghum ending stocks are projected at 23.9 million bushels, about half of last year’s level.
Projected Sorghum Price Down From Last Year
The projected range for the 2017/18 season-average sorghum price received by farmers is $2.60 to $3.40 per bushel, leaving the midpoint of $3.00, $0.30 higher than last year. Tight supplies and low ending stocks are behind the change.
Barley Use Declines
Total barley use is projected down 25 million bushels to 193 million, compared with 2016/17, with lower feed and residual accounting for the downward shift. FSI and exports are unchanged from 2016/17. Ending stocks are projected at 76.4 million bushels, 19 million below last year’s estimate.
The projected range for the 2017/18 season-average barley price received by farmers is $4.35 to $5.35 per bushel for a midpoint of $4.85 per bushel, $0.10 below last year.
Oats Disappearance Slightly Less in 2017/18
Total oats disappearance in 2017/18 is projected up 1 million bushels to a total of 172.0 million bushels. A 2million-bushel increase in FSI use is offset by a 1-million bushel decline in exports. Feed and residual is expected to be unchanged in 2017/18 at 90 million bushels.
FSI use is raised based on population growth contributing to increased use of oats in food products. Exports are projected to decline 1 million bushels to 2.0 million from the past year based on increased shipments by other oats producers. Ending stocks are expected at 40.6 million bushels, 5 million below last season and the lowest since 2013/14.
The projected range for the 2017/18 season-average oats price received by farmers is $1.95 to $2.45 per bushel for a midpoint of $2.20 per bushel, $0.15 above last year.
Hay Harvested Acres Prospects Lowered for 2017
The May 10 NASS Crop Production report indicates May 1, 2017, U.S. onfarm hay stocks totaled 24.4 million tons, a 3-percent decrease from the 2016 figure of 25.1 million.
With December 1, 2016, stocks reported at 95.8 million tons, the implied December-May disappearance is 71.4 million, slightly higher than the disappearance indicated for the same period in 2015/16. For 2017, producers intend to harvest 52.8 million acres of all types of hay, 650,000 below the area harvested in 2016.
Prices for the 2016/17 marketing year are $132 per ton for all hay, down from the 2015/16 price of $145 per ton, a reflection of continuing low prices for alternative feeds.
