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Corn Comments After the June WASDE

Posted By Doane Advisory Services | June 12, 2017 6:17 PM CDT

USDA made no revisions this month to either the 2016/17 or 2017/18 U.S. corn supply and demand projections. Ending stocks for this year remain at 2.295 billion bushels. There was some expectation that USDA might boost the export forecast, but it remains unchanged at 2.225 billion bushels. USDA did trim the price forecast, lowering the upper range by 10 cents to $3.45 while the lower estimate is unchanged at $3.25 per bushel. As a result, the midpoint is down 5 cents to $3.35.

No changes were made to the 2017/18 outlook. The base trend yield remains at 170.7 bushels and production totals 14.065 billion bushels. Revisions to production are more likely next month when USDA incorporates updated acreage figures from the June 30 Acreage report. USDA could also adjust the trend yield depending on how weather unfolds over the next month. For now, 2017/18 ending stocks remain at 2.110 billion bushels and the midpoint season average price holds at $3.40 per bushel. Trade expectations were for ending stocks to decline by only 11 million bushels, so no change is still price neutral.

USDA made modest revisions to the global outlook. World corn production is now pegged at 1031.9 mmt, down 1.8 mmt from last month and down 35.4 mmt from 2016. Consumption is only fractionally lower from May, but still up 7 mmt from 2016/17. The combination of lower production and increased use results in a 30.3 mmt annual cut in 2017/18 ending stock to 194.3 mmt.

Projections for Argentina and Brazil are unchanged from last month at 40 mmt and 95 mmt, respectively.