Feed Grain Outlook: Corn, Sorghum Exports Boosted by Higher Production Forecasts

    Photo: Mississippi State University

    U.S. corn production is raised to 15.3 billion bushels, based on a national average yield of 181.8 bushels per acre, according to the National Agricultural Statistic Service’s (NASS) August Crop Production report. Domestic use, exports, and ending stocks are also raised for 2020/21.

    The projected price is lowered $0.15 per bushel this month to $3.10. Sorghum and barley production are also raised based on NASS yields, while oat production is reduced.

    U.S. export projections got a sizeable boost this month with higher corn and sorghum output. U.S corn exports are projected 1.5 million tons higher to reach 56.5 million, while sorghum exports are up 0.7 million tons to 6.7 million, the highest since 2015. Recovering after COVID-19 and African Swine Fever, China’s pig industry increased its feed consumption and demand for sorghum for animal feeding.

    Global corn trade prospects are raised by higher European Union (EU) feed demand, as reduced domestic supplies of wheat and barley support higher corn imports.

    Domestic Outlook

    Projected 2020/21 corn yield at record high, resulting in record production

    Projections for 2020/21 U.S. corn production are for larger supplies, greater feed and residual use, increased exports, and higher ending stocks—as projections for corn production are up 12% from last year. Corn production is forecast at 15.3 billion bushels, up 278 million from the July projection.

    The season’s first survey-based corn yield forecast is at a record, 181.8 bushels per acre, which is 3.3 bushels higher than last month’s trend-based projection. Record high yields are forecast for Georgia, Kentucky, Michigan, Minnesota, New York, South Carolina, South Dakota, Tennessee, Washington, and Wisconsin.

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    All the 18 states sampled—except for California, Colorado, Idaho, Maryland, Pennsylvania, and Oklahoma—are expected to see an increase in yield this year over last.

    NASS’s Crop Progress Report from August 10th shows the 18 states that represented 91% of the 2019 corn acreage (Colorado, Illinois, Indiana, Iowa, Kansas, Kentucky, Michigan, Minnesota, Missouri, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Dakota, Tennessee, Texas, and Wisconsin) sampled for corn silking.

    The report shows that this year’s crop is progressing ahead of the five-year average and ahead of last year. The crop progress reported across the states also showed that more of the crop is in the excellent, good, and fair categories for crop condition than this time last year.

    Projected corn area harvested in 2020/2021 remains unchanged at 84.0 million acres, while yield received a 3.3 bushel per acre boost to 181.8 bushels per acre. This increase in yield—while projected harvest area remains unchanged—results in a 278.2 million bushels increase in production, now forecast at 15,278.2 million bushels.

    If realized, both production and yield at these levels would be historic highs for the US. With beginning stocks being trimmed by 20.0 million bushels to 2,228.0 million bushels to start off the year, total supply is now projected to be 17,531.2 million bushels, with no change in the projected level of imports.

    Corn used for feeding is projected up 75.0 million bushels in 2020/21, with feed now accounting for 5,925.0 million bushels in use. No changes are projected for the other domestic use categories, resulting in a total domestic use of 12,550.0 million bushels, up 75.0 million bushels over last month’s projections.

    With the additional corn production projected for the year, exports are also projected higher by 75.0 million bushels to 2,225.0 million bushels. This results in a total use of 14,775.0 million bushels, up 150.0 million bushels over last month’s projection. For a detailed discussion of US grain exports, please see the international section of this report.

    The changes in production and use result in ending stocks of 2,756.2 million bushels up 108.2 million bushels over prior projections. With the increased supply, use, and ending stocks, prices are projected down by $0.25 per bushel to $3.10 per bushel for the average farm price. This, if realized, would be the lowest season average farm price since 2006/07.

    Changes for the 2019/20 season are minimal and include a 20.0 million bushel increase in exports, now estimated at 1,795.0 million bushels. This change decreased the ending stocks by the same 20.0 million bushels with ending stocks now estimated at 2,228.0 million bushels.

    Sorghum production projected up to the highest level since 2016/17

    With acreage unchanged and yield up 9.1 bushels per acre to 76.6 bushels per acre in 2020/21, production is forecast up 44.1 million bushels to 371.1 million bushels. If realized, these production and yield figures would represent the highest levels seen since 2016/17.

    Projections for Kansas and South Dakota are for record high state yields. Leaving imports unchanged, the total supply is also boosted by the same 44.1 million bushels to 401.3 million bushels this year.

    No changes in the domestic use are expected for sorghum in 2020/21. Total use does get a 40.0 million bushel increase to 375.0 million bushels, due to a 40.0 million bushel boost to exports, which are now projected to be 260.0 million bushels. If realized, this would be the largest export figure since the 2015/16 season. For a more detailed analysis of the sorghum trade this year, please see the international section of this report.

    Ending stocks receive a 4.1 million bushel boost to 26.3 space million bushels this year. With the increase in production of both sorghum and corn, the season-average farm price is projected down $.25 per bushel to $3.10 per bushel, which would be the lowest price since the 2016/17 season.

    The sorghum crop progress reported in the August 10 Crop Progress Report summarizes the conditions for Colorado, Kansas, Nebraska, Oklahoma, South Dakota, and Texas. These six states planted 100% of the 2019 sorghum acres. The report shows that the crop progress this year for sorghum is ahead of last year’s progress at the same time in the growing season, however conditions are only in line with the five-year average.

    Barley yield in 2020/21 is projected at a record high.

    Barley yield is projected up to 2.7 bushels per acre to 78.8 bushels per acre in 2020/21. If realized, this would be a new record for the United States, passing the previous record of 77.9 bushels per acre. Montana and Washington are projected to have state record high yields in 2020/21. Area forecast remain unchanged with a harvested area of 2.2 million acres, resulting in a production of 175.9 million bushels.

    This results in 6.1 million bushels more than previously forecast. Total supply is forecast at 263.2 million bushels, which happens to be precisely the same as last year’s total supply.

    With the increase in supply, feed use is projected up by 5.0 million bushels, to 30.0 million bushels this year. No other changes are forecast. Domestic total use is now projected to be 173.0 million bushels. Exports are projected to remain at 5.0 million bushels, resulting in the total use of barley in 2020/21 being 178.0 million bushels, up 5.0 million bushels from last month’s projection of 173.0 million bushels.

    Without all the projected increase in production being consumed or exported, ending stocks are projected up 1.1 million bushels to 85.2 million bushels. The season average farm price is expected to remain unchanged at $4.45 per bushel.

    The five states surveyed for the NASS Crop Progress Report released on August 10 are Idaho, Minnesota, Montana, North Dakota, and Washington. These states represent 85% of the 2019 barley acreage. The report suggests that the crop is developing ahead of last year, but slightly behind the five-year average. Crop conditions are skewed toward good and excellent throughout most of the growing region.

    Oat yield trimmed, lowering production fractionally

    Oat yield this month is trimmed by 0.2 bushels per acre to 65 bushels per acre, but forecast 0.7 bushels per acre above the 2019 yield. No use or export changes are projected this month, resulting in the ending stocks being trimmed by 0.1 million bushels, representing the cut to production. Ending stocks are projected to be 41.7 million bushels in 2020/21.

    The season average farm price is projected to be $2.70 per bushel, unchanged from last month. The oat harvest in 2020/21 is already 65% complete as of August 9. The nine states sampled include Iowa, Minnesota, Nebraska, North Dakota, Ohio, Pennsylvania, South Dakota, Texas, and Wisconsin. These nine states represent 74% of the 2019 oat acreage. This is ahead of both last year’s progress and also the five-year average.

    Full report.

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