USDA Says Outlook for Corn Market in 2019 Positive

(ARLINGTON, VA) Increased production, increased domestic use, increased exports, and lower stocks highlight the outlook for the 2019 corn market. According to information presented last week during the 95th Annual USDA Agricultural Outlook Forum, USDA projected a U.S. crop of 14.9 billion bushels, three percent above a year ago as an increase in area more than offsets a lower yield. The yield projection of 176 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather. Despite beginning stocks that are forecast down from a year ago, total corn supplies are up slightly on a larger crop. Total U.S. corn use this year is forecast to rise one percent from a year ago on increases to domestic use and exports. Food, seed, and industrial (FSI) use is projected unchanged at seven billion bushels. Corn used for ethanol is unchanged from a year ago, based on expectations of flat motor gasoline consumption and a slight decline in ethanol’s inclusion rate into gasoline that is essentially offset by continued growth in exports. Feed and residual use is up 125 million bushels to 5.5 billion, with a larger crop and continued growth in grain consuming animal units. Corn exports are up 25 million bushels to 2.5 billion, reflecting expectations of modest growth in global trade and a slight decline in U.S. market share with competition from other exporters. Ending stocks are projected at 1.7 billion bushels, down five percent from the previous marketing year, supporting a 5 cent per bushel increase from a year ago. If realized, the expected season-average farm price of $3.65 per bushel would be the highest in more than four years.