The USDA is projecting a record corn crop and supplies for the 2016-’17 marketing year that is now being planted. Its projections in the May 10 World Agriculture Supply and Demand Estimates report call for supplies to be a record 16.3 billion bushels, up 886 million from last year. If its projections for corn use and exports are realized, USDA says the projected corn ending stocks of 2.2 billion bushels would be the highest since the mid-1980s. “However, the stocks-to-use ratio remains far lower than in those years when domestic support policies ballooned stock to more than 50 percent of annual usage.”

Total U.S. feed grain supplies for 2016-’17 are projected up 4 percent from the 2015-’16 record. Corn production is projected at 14.4 billion bushels, up 829 million from last year, and 214 million higher than the previous record in 2014-’15.  USDA says a 5.6 million-acre increase in corn plants more than offsets a small reduction in yield, which is now projected at 168 bushels per acre, down 0.4 bushels from last year. 

U.S. corn use for 2016-’17 is projected at a record 14.1 billion bushels, 4 percent higher than for 2015-’16. Corn used to produce ethanol is projected 50 million bushels higher than in 2015-’16 with a reduction in sorghum use for ethanol and higher expected ethanol blending. Feed and residual use for 2016-’17 is projected 300 million bushels higher with higher production, lower expected prices, and further expansion in animal numbers in 2016-’17. Exports for 2016-’17 are projected 175 million bushels higher than this month’s upwardly revised projection for 2015-’16.

More competitive prices and reduced supplies and competition from Brazil support gains in U.S. exports for 2016-’17 and 2015-’16. U.S. corn ending stocks for 2016-’17 are projected at 2.2 billion bushels, up 350 million from the 2015-’16 projection. If realized, stocks would be the highest since the mid-1980s; however, the stocks-to-use ratio remains far lower than in those years when domestic support policies ballooned stocks to more than 50 percent of annual usage. The season-average 2016-’17 farm price is projected at $3.05 to $3.65 per bushel, down 25 cents at the midpoint from this month’s slightly higher outlook for 2015-’16.

The USDA also is projecting record global coarse grains supplies and higher corn production in most producing counties.

Global coarse grain supplies for 2016-’17 are projected at a record 1,543.2 million tons, up 41.0 million tons from 2015-’16 with nearly half of the increase on larger U.S. beginning stocks and production. Global corn production for 2016-’17 is projected at 1,011.1 million tons, up 42.2 million from 2015-’16, and just short of the record 1,013.5 million in 2014-’15. In addition to the projected 21.1-million-ton U.S. increase, 2016-’17 corn production is also higher for most of the world’s major producing countries with production rebounds for South Africa and EU, and higher area in Argentina, Russia, and Ukraine. Brazil corn production for 2016-’17 is 1.0 million tons higher than this month’s lowered outlook for 2015-’16, as area is expected to decline slightly, but yields rise from those now expected for the 2015-’16 crop. Partly offsetting these increases for 2016-’17 is a 6.6-million-ton reduction for China corn, as changes in support policies and lower domestic prices reduce incentives for corn planting.

Global corn consumption for 2016-’17 is projected at a record 1,011.9 million tons, 43.0 million tons higher than in 2015-’16. The largest increases are for China with consumption projected up 9.5 million tons and the United States with consumption projected up 9.2 million tons. Smaller increases are projected for EU, Argentina, Brazil, India, Russia, Vietnam, Mexico, and South Korea.

Global corn exports for 2016-’17 are higher with increases for Argentina, EU, and Ukraine more than offsetting a reduction for Brazil. Corn imports for 2016-’17 are lower with declines for South Africa, EU, Vietnam, and China partly offset by increases for Mexico, Turkey, Egypt, Iran, and South Korea. Much of the imbalance in global marketing year imports and exports is driven by the timing of Brazil and Argentina exports and the South Africa change from a net importer to a net exporter. The 2016-’17 local marketing years for these Southern hemisphere exporting countries do not start until 2017, while the local marketing years for many major importers begin in October 2016. Corn shipments by Southern Hemisphere exporters between October 2015 and February 2016 were strong, appearing as 2014-’15 exports, but accounted for as 2015-’16 imports. Reduced 2015-’16 Brazil second-crop corn limits export prospects between October 2016 and February 2017. As a result, global imports decline in 2016-’17 at the same time that U.S. exports expand. Global 2016-’17 corn ending stocks are projected at 207.0 million tons, down slightly from the 207.9 million for 2015-’16. Lower stocks in China, EU, and Brazil more than offset the projected U.S. increase.