Market News & Headlines >> USDA Confirms Large Corn Supplies, Sluggish Demand
Tuesday’s USDA reports confirmed large corn supplies and sluggish demand suggesting a continued gloomy outlook for corn prices in 2016, barring major crop issues in the U.S. or South America.
While USDA lowered its estimate of 2015 U.S. corn production slightly due to lower yields, it raised its projection for 2015-16 U.S. ending stocks slightly due to slower expected demand.
USDA pegged U.S. corn production at 13.601 billion bushels, compared to its previous estimate of 13.654 billion and trade estimates that averaged 13.646 in a range from 13.525-13.770 billion bushels, according to a Reuters News Service survey. USDA lowered its estimate of the average U.S. corn yield to 168.4 bushels per acre, compared with its previous forecast of 169.3 bushels and trade estimates that averaged 169.2 bushels per acre in a range from 167.7-170.0 bushels.
USDA’s quarterly Grain Stocks report pegged Dec. 1 U.S. corn stocks at 11.212 billion bushels, 1 million bushels above a year earlier and pretty much in line with trade estimates averaging 11.237 billion bushels in a range from 11.073-11.440 billion bushels.
USDA projected 2015-16 U.S. corn ending stocks at 1.802 billion bushels, 17 million above both its previous estimate and the average of trade expectations, which ranged from 1.642-1.860 billion bushels.
USDA cut its forecast for U.S. corn exports by 50 million bushels due to continued slower-than-expected sales and shipments amid continued strong competition from South American supplies. Food, seed and Industrial use was also trimmed by 10 million bushels due to lower use of corn for sweeteners. On the supply side of the ledger, projected U.S. corn imports were raised by 10 million bushels.
USDA also lowered its projected range for the 2015-16 on-farm average price of corn by 5 cents on each end to $3.30-$3.90.