The US Department of Agriculture on Friday projected domestic corn stocks at the end of the 2019-20 marketing year at 2.485 billion bushels (63.122 million mt), up 390 million bushels from its 2018-19 estimates.
"With total US corn supply rising more than use, 2019-20 US ending stocks are up 390 million bushels from last year and if realized would be the highest since 1987-88," the USDA said. "Stocks relative to use at 16.9% would be the highest since 2005-06."
"With larger stocks relative to use, the season-average farm price is projected at $3.30 per bushel, down 20 cents from 2018-19 and the lowest since 2006-07," it said.
USDA's domestic corn stocks estimates for the 2019-20 marketing year, which ends August 31, was above the range of analysts' expectations of 1.787 billion-2.387 billion bushels.
"The US feed-grain outlook for 2019-20 is for larger production and domestic use, lower exports, and greater ending stocks," the agency added. "The corn crop is projected at 15.0 billion bushels, up from last year and the second largest on record behind 2016-17 as an increase in area more than offsets a reduction in yield."
"The yield projection of 176.0 bushels per acre is based on a weather-adjusted trend assuming normal planting progress and summer growing season weather, estimated using the 1988-2018 time period," the USDA said.
The estimates of US corn to be used for ethanol production in the 2019-20 marketing year was at 5.5 billion bushels, from 5.45 billion bushels in the previous marketing year.
The projection of US corn to be exported in the 2019-20 marketing year was at 2.275 billion bushels, from 2.3 billion bushels in the previous marketing year.
"US corn exports are forecast to decline 25 million bushels in 2019-20, despite larger world corn trade," the USDA added. "Increased exports out of Argentina and Brazil during 2018-19 (local marketing years beginning March 2019 and ending February 2020) are expected to limit US exports during the first half of 2019-20."
"Combined corn exports for Ukraine and Russia in 2019-20 are projected to decline, mostly reflecting a return to normal weather for Ukraine following a bumper harvest in 2018-19," it said.
The projection for the 2019-20 marketing year foresees 32% of the next season's corn supply going towards production of ethanol and byproducts, while 13% would be exported, the data showed.
GLOBAL YEAR-ENDING CORN STOCK FORECAST FALLS FOR 2019-20
The USDA estimated the global corn ending stocks for the 2019-20 marketing year at 314.71 million mt, 11.23 million lower from its 2018-19 estimates of 325.94 million mt. Its 2108-19 estimates rose 11.93 million mt from its April estimates of 314.01 million mt.
USDA world corn stocks estimates for the 2019-20 marketing year were within the range of analysts' expectations of 271.2 million-322 million mt, but world corn stocks estimates for the 2018-19 marketing year were above the range of analysts' expectations of 314 million-318.2 million mt
"World [2019-20 marketing year] corn production is forecast record high, with the largest increases for the United States, South Africa, Russia, Canada, India, and Brazil," the USDA said. "Partly offsetting are smaller crops projected for China and Ukraine."
Corn is the primary feedstock for ethanol production in the US and is the main competitor for dried distillers grains.
