Market News & Headlines >> USDA Expected to Raise Corn Carryout Forecast
USDA is expected to raise its forecast for the 2019/20 U.S. corn carryout in Thursday morning’s monthly supply/demand update due to plunging corn-for-ethanol use.
On average, the grain trade expects USDA to peg the corn carryout at 2.004 billion bushels, up 112 million bushels from its March forecast of 1.892 billion, according to a Reuters survey of 22 analysts. Pre-report trade expectations range from 1.792-2.150 billion bushels.
USDA should cut corn-for-ethanol usage based on the recent sharp drop off in ethanol production and could potentially cut its forecast for U.S. corn exports a bit further, despite recent improvement in export demand. On the other hand, USDA should raise its projection for corn feed/residual use based on the lower-than-expected March 1 grain stocks and reduced production of DDGS, which will force producers to feed more corn.
USDA is expected to make only minor changes to its U.S. soybean and wheat balance sheets on Thursday.
Pre-report trade estimates of the 2019/20 U.S. soybean carryout average 430 million bushels in a range from 385-485 million compared with USDA’s March estimate of 425 million bushels.
U.S. soybean export sales are running far behind the pace needed to reach USDA’ s current export forecast, but USDA seems unlikely to change that forecast with China still expected to make significant purchases of U.S. soybeans for June-August shipment as it seeks to meet its phase-one trade agreement commitments. President Trump said earlier this week he is confident China will honor those commitments.
Trade estimates of the 2019/20 U.S. wheat carryout average 940 million bushels unchanged from USDA’s March estimate, in a range from 890-973 million bushels.
USDA could lower its U.S. wheat export forecast, however, as U.S. export shipments over the past month have been averaging well below the level needed to reach its current forecast and sales hit a marketing year low during the week ended March 26.