Harvested acreage and production estimates for US corn in 2019-20 (September-August) are likely to be trimmed by the US Department of Agriculture, several market participants told S&P Global Platts.
The USDA, which is due to release its latest World Agricultural Supply and Demand Estimates or WASDE on January 10 had kept its estimates for corn unchanged in December.
The January WASDE is considered as the final US crop estimate for the season, and usually incorporates annual crop production forecast by National Agricultural Statistics Service and the quarterly Grain Stocks report, also to be released on Jan 10.
The 2019-20 marketing year remained particularly challenging for corn production in the US due to inclement weather conditions, and the USDA lowered its corn production estimates for three consecutive months, before keeping it unchanged in December.
Market participants now expect another cut in harvested corn acreage and production estimates, as acres of corn remained under snow and went unharvested in some parts of the US.
US CORN ESTIMATES 2019-2020
Platts Analytics said in their WASDE preview report that they estimate 100 million bushels, or roughly 10% of the corn still in the fields to be "at risk" through lower harvested acres and lower yields.
"We have never had a year where we have acres of corn sitting under the snow", said Peter Meyer, head of grains and oilseed analytics at Platts Analytics. The USDA may cut corn acreage owing to the snow in North Dakota, he added.
According to the last Crop progress data released by the USDA, 43% of corn was harvested in North Dakota as of Dec 8, 2019. A five-year average (2014-2018) shows that 95% of corn in the state was harvested by Dec 1.
For the upcoming USDA update, Terry Reilly, senior commodity analyst with Futures International expects a 400,000 acres drop in US corn planted area than USDA's October estimate of 89.9 million acres, and the harvested area to decline by 511,000 acres from 81.8 million acres.
Reilly expects US corn yield in 2019-20 at 167.2 bushels per acre, 0.2 bushel higher than USDA, resulting in a production estimate of 13.594 billion bushels, which is 67 million below USDA's current forecast of 13.661 billion bushels.
Arlan Suderman from INTL FC Stone also said that he expects 2019-20 corn production to be modestly lower at 13.472 billion bushels owing to a small loss in harvested acres and yield.
Stephen Nicholson, President of Rabo Agrifinance echoed a similar view, adding that he suspects harvested acres to change, taking production down.
LOWER CARRYOVER STOCKS
Analysts also expect US corn ending stocks to be adjusted lower than USDA's previous forecast.
"Our 2019-20 US ending stocks estimate is 1.862 billion bushels, with a bias for it to go lower," said Reilly. USDA's current forecast stands at 1.910 billion bushels.
Analysts also believe that if the USDA does not deviate much from their November supply estimates in this update, then there can be a special survey for 2019 harvested area and production this spring.
US CORN IN 2020-2021
"2020 corn is going to be interesting," said Nicholson from Rabo Agrifinance.
Nicholson expects acreage under corn in 2020-21 to be between 90-92 million acres and yield under corn to be in the mid-170s bushels per acre. On price front, he said, 2020 looks a lot like 2019.
INTL FCStone estimated acreage under corn in 2020-21 marketing year to be at 94 million acres, with average yields at 175 bushels per acre. The agency expects this year's corn production to be at 15.106 billion bushels.
Platts Analytics expects planted acreage under corn in 2020-2020 to be at 93 million acres, and harvested acres to be at 85.1 million acres.
They expect corn yield to be at 176 bushels per acre, and the total production in the country to be at 14.997 billion bushels.
