USDA Forecasts Record High Projections For Corn

Forecasts by the U.S. Department of Agriculture’s (USDA) Economic Research Service (ERS) indicate higher U.S.corn output for the 2016/17 marketing year based on increased yields. The ERS lifted its corn yield estimate for the season to 175.3 bushels per acre, or by 1.9 bushels per acre over its previous estimate released in November. This increase is based on the greater yields farmers have experienced during the recent fall harvest. These higher average yields are expected to raise corn stocks to their highest level in more than 30 years to 2.4 billion bushels. Despite this bumper stockpile, the per-bushel price climbed five cents to a midpoint estimate of $3.30, due in part to an offset of an 85 million bushel increase in corn utilization for food, seed, and industrial uses.

Projections for U.S. corn exports for 2016/17 remain unchanged at 56.5 million tons - five million tons over 2015 exports, and the highest since the 2007/08 season. However, market competition is expected to intensify later in 2017 as producers in South America begin exporting their new crop.