Market News & Headlines >> USDA Slashes U.S. Corn Carryout Estimate
USDA stunned the corn market on Tuesday morning, lowering its 2020 crop production and ending stocks estimates more sharply due to lower-than-expected crop yields and a large increase in projected U.S. corn exports.
USDA pegged U.S. corn production at 14.507 billion bushels, down 215 million bushels or 1.5% from its October estimate, lowering its U.S. yield estimate by 1.7 bushels per acre to 175.8 bushels. USDA’s crop estimate was below the range of pre-report trade estimates in a Reuters News Service survey, as was its U.S. yield estimate.
However, the production number was not the biggest change on USDA’s U.S. corn supply/demand balance sheet, as USDA hiked projected U.S. corn exports by 325 million bushels or 14%, largely due to a smaller-than-expected crop in Ukraine, a top export competitor. USDA slashed its estimates of Ukraine’s production and exports by 8.0 million metric tons (315 million bushels).
USDA did cut projected U.S. feed/residual use by 75 million bushels, offsetting a portion of the increase to exports.
As a result, USDA pegged 2020/21 U.S. corn ending stocks at 1.702 billion bushels, down 465 million or 21.5% from its October estimate. USDA’s ending stocks estimate was 148 million bushels below the low end of trade expectations.
In conjunction with the huge cut to projected ending stocks, USDA raised its forecast for the 2020/21 U.S. average on-farm price of corn by 40 cents per bushel to $4.00.