Today, we got the USDA’s first projections for the 2018/19 crop. In addition to giving grain markets an idea of what production numbers are going to be around the world, they also gave us a look at the demand side.
Here’s our breakdown of the numbers.
The USDA’s May WASDE report showed the market that American farmers will produce 14 billion bushels of corn in 2018. This is 4.2% lower than last year’s 14.6 billion bushels of corn that were taken off by farmers.
Compared to the five-year average of 14.3 billion bushels, 2018/19 American corn production is 2.1% lower.
Going into the report, the average guesstimate for US corn was 14.1 billion bushels. Thus, the market could be interpreting today’s number as relatively neutral.
From a demand perspective, we can just look to ending stocks to get an idea of where we sit. For American corn, 2018/19 carryout is expected to come in at 1.7 billion bushels. This is 25.6% below the 2.2 billion bushels of corn that the 2017/18 crop year is supposed to end with.
Looking more global, corn production is expected to climb 1.9% year-over-year to 1.1 billion tonnes.
Here’s a breakdown of some of the major producing countries with their change year-over-year:
- United States: 356.6 million tonnes (-4.2% YoY);
- China: 225 million tonnes (practically unchanged year-over-year);
- Brazil: 96 million tonnes (+10%);
- Argentina: 41 million tonnes (+21%);
- Ukraine: 30 million tonnes (+24%)
- Canada: 15.3 million tonnes (+8.5%)
- South Africa: 14 million tonnes (+3.7%)
From a global carryout perspective, 2018/19 is forecasted by the USDA to end with 159.2 million tonnes. This is down 20.2% year-over-year and well below the pre-report average guesstimate of 182.8 million tonnes.
The other key takeaway today is the change in South American corn production.
The USDA projected an uptick in Argentine and Brazilian corn output in the year ahead.–