MarketsFarm — There will be sharp increases in the United States’ 2020-21 corn production — and especially in ending stocks, according to the latest monthly supply and demand report from the U.S. Department of Agriculture (USDA).
The department issued its latest world agricultural supply and demand estimates (WASDE) on Tuesday.
U.S. soybean planted acres and production were also projected to increase, but carryover is expected to decline steeply. Meanwhile, U.S. wheat was forecast to see decreases in acres, production and carryover.
Should USDA’s numbers hold out, corn production is projected to jump by about 17.1 per cent in 2020-21 to just shy of 16 billion bushels. This comes despite sharply reduced demand due to the COVID-19 pandemic and dramatic decreases in crude oil prices this spring. With the latter dropping to lows unseen in about 20 years, the U.S. ethanol industry was shaken to its core as production quickly became highly unprofitable. The bottom line for corn is that supply is expected to outpace demand in the coming crop year.
With that in mind, USDA upped its estimate for the corn carryover, with it skyrocketing 52.5 per cent to 3.2 billion bushels. That’s below the average market guess of 3.4 billion.
USDA kept its projection of planted corn area at 97 million acres, the same number the department calculated in March. Compared to acres planted in 2019-20, it marks an increase of 8.1 per cent.
Soybean production was forecast to rise by almost 16 per cent to more than 4.1 billion bushels. Despite that increase, the carryover was projected to drop by 30.2 per cent in 2020-21 at 405 million bushels as domestic use, including the crush, and exports are predicted to increase. Trade expectations were about 430 million.
USDA estimated soybean acres would rise by 9.7 per cent to 83.5 million in 2020-21.
Unlike the other two crops, USDA predicted decreases across the board for wheat, as it continues to struggle in the global marketplace. Planted acres are to slip 1.1 per cent to 44.7 million, making it the smallest area planted in more than a century.
Wheat production is expected to fall 2.8 per cent at 1.87 billion bushels. The carryover was projected to drop nearly 7.1 per cent at 909 million bushels. The markets expected a larger decrease, to about 820 million.
— Glen Hallick reports for MarketsFarm from Winnipeg.