Market News & Headlines >> USDA Slashes Corn Crop Forecast
USDA surprised the grain trade by slashing its forecast for the 2019 U.S. corn crop by roughly 9% in Tuesday’s monthly supply/demand report, lowering its estimates of both the U.S. yield and planted/harvested acreage due to the record slow planting pace.
USDA on Tuesday pegged the U.S. crop at 13.688 billion bushels, down from a May forecast of 15.030 billion. USDA projected plantings at 89.8 million acres, 3 million below the March planting intentions and also lowered its forecast of harvested corn acres by 3 million to 82.4 million. USDA cut its U.S. yield forecast by 10 bushels per acre versus the weather-adjusted trend-line estimate it used in May, pegging the yield at 166 bushels.
As a result of the expected production cut, USDA slashed its estimate of the 2019/20 U.S. corn carryout by nearly 33% to 1.675 billion bushels versus the May forecast of 2.495 billion bushels. USDA cut next year’s projected U.S. corn usage by roughly 3.0% due to tighter supplies, slashing projected feed/residual use by 300 million bushels and projected exports by 150 million.
USDA also raised projected old-crop ending stocks and hence the old-crop carry-in for 2019/20 by 100 million bushels to 2.195 billion, loping 100 million bushels off of projected old-crop exports due to a continued slow sales pace.
USDA did not cut its estimates of the U.S. soybean yield or planted/harvested soybean acreage. However, USDA Chief Economist Robert Johansson told Reuters News Service on Wednesday that USDA is set to adjust its soybean crop forecast in the July Supply/Demand report.
USDA raised its U.S. soybean carryout forecasts for both 2018/19 and 2019/20 on Tuesday due to slower-than-expected export demand. USDA pegged 2018/19 ending stocks at 1.070 billion bushels, up from a May estimate of 995 million bushels, cutting projected old-crop exports by 75 million. USDA projected 2019-20 soybean ending stocks at 1.045 billion bushels, up from a previous estimate of 970 million, due to the larger old-crop carry-in.