USDA forecasts record corn production, jump in exports

USDA projects a significant rebound in corn and soybean production this year, as expected, following last year’s weather-shortened crop and record prevented plant acres.

Production estimates released Tuesday peg U.S. corn production this season at a record 15.995 billion bushels, with a national average yield average of 178.5 bushels per acre, while soybean output could grow 568 million bushels from last year to 4.125 billion bushels.

This year’s soybean yield estimate (49.8 bushels per acre) grew from 47.4 bushels last year while planted bean acreage increased from 76.1 million acres last year to 83.5 million acres this season.

“It’s all about the new crop balance sheets right now,” said Karl Setzer, AgriVisor commodity risk analyst. “We have big global production numbers and big global demand. China will be the big unknown moving forward.”

The Ag Department’s latest forecasts in this month’s world ag supply and demand estimates report also call for exports and ethanol production to rebound once the economy recovers from the COVID-19 pandemic.

USDA raised exports for corn and soybeans by 375 million bushels each from the revised forecast of 2019/20 to 2.15 billion bushels of corn and 2.05 billion bushels of beans for 2020/21.

That would boost the U.S. market share up from a multi-year low in 2019/20 for corn and from a record low of 30% last year to 34% for soybeans.

Food, seed and industrial use of corn also could rise by 245 million bushels to 6.6 billion bushels for 2020/21, driven by a rebound in ethanol production, coming off COVID-19 reduced levels of 2019/20, USDA noted.

“Corn exports are expected to be up due to the simple fact we’re undervalued in the world market,” Setzer said.

USDA pegged the 2020/21 season price estimates at just $3.20 per bushel for corn (down 40 cents from the past year and the lowest level since 2006/07) and $8.20 for soybeans, down 30 cents from a year ago.

The 2019/20 soy carryout increased to 580 million bushels while 2020/21 ending stocks of corn jumped 1.2 billion bushels to 3.31 billion bushels, which would be the highest since 1987/88. Soy stocks for 2020/21 came in near trade expectations at 405 million bushels.

“It’s a huge (ending stocks) number for corn, but 100 million bushels under the average trade estimate,” Setzer said. “And the soy carryout is a big number, but not what I’d call burdensome.”

Randy Martinson, of Martinson Ag Risk Management, called the overall report “a little friendly for corn” given huge production expectations, somewhat negative for old crop beans and about as expected for new crop beans, during a teleconference hosted by the Minneapolis Grain Exchange.

“The new crop corn yield was higher than expected by the trade,” he noted.

This year’s corn yield estimate represents about a 10-bushel increase from last year. USDA noted in its report the estimate was based on weather-adjusted trend assuming normal planting progress and summer growing season weather.

“You have to question the (corn) production number (with a yield up 10 bushels from last year),” Setzer said. “That seems like a pretty aggressive number to me here on May 12. The trade knows that. That’s why there was a muted reaction in the market.”