The U.S. Department of Agriculture (USDA) has adjusted its projection for domestic corn ending stocks, citing an increase in the grain’s utilization for ethanol biofuel production and feed for farm animals. This adjustment comes as corn usage forecasts rise following a period of three-year low futures prices, despite global corn supplies being deemed abundant. Consequently, corn prices experienced a decline after the release of the report.
The USDA’s latest forecast projects U.S. corn stocks at 2.122 billion bushels by the end of the 2023-24 marketing year on August 31, down from the previous forecast of 2.172 billion bushels. While analysts had anticipated an even greater reduction to 2.102 billion, the projected stocks still represent a five-year high, reflecting the record crop harvested in 2023 and the subsequent increase in storage.
The USDA’s report estimated that 5.4 billion bushels of U.S. corn will be allocated for ethanol production, up from the March forecast of 5.375 billion, while 5.7 billion bushels will be utilized for feed and other residual purposes, an increase from the previous 5.675 billion estimate.
Despite the reduction in ending stocks, the USDA’s supply outlook remains consistent, with the agency emphasizing the rise in usage as the primary factor driving the adjustment.
Furthermore, the USDA lowered its forecast for Argentina’s corn crop to 55 million metric tons, below analysts’ expectations and reflecting damage caused by the spiroplasma disease carried by leafhoppers. In contrast, Brazil’s soybean crop forecast was left unchanged at 155 million metric tons, despite a reduction in output projection by Brazilian crop agency Conab due to adverse weather conditions.
Terry Reilly, senior agricultural strategist for Marex, emphasized the ample supply of both beans and corn from South America and the U.S., highlighting the capacity to meet global demand.