The USDA has released the May edition of its World Agricultural Supply and Demand Estimates report, predicting the corn crop will reach 14 billion bushels this year, down from last year with a lower forecast area and yield. The yield projection is 174 bushels per acre. With beginning stocks down from a year ago, total corn supplies at 16.3 billion bushels, if realized, would be down 675 million from the prior year.

Total U.S. corn use in 2018-’19 is forecast to decline modestly from a year ago on reductions in domestic use and exports. Food, seed and industrial (FSI) use is projected to increase 75 million bushels, reaching 7.1 billion, driven by an expected increase in the amount of corn used to produce ethanol for fuel and growth in non-ethanol FSI.

According to the USDA, corn used to produce ethanol is up 50 million bushels, primarily reflecting expectations of gasoline consumption growth. Sorghum FSI is up 55 million bushels on an expected increase in the amount of sorghum used to produce ethanol. Feed and residual use for corn is projected lower as a smaller crop, increased use of ethanol by-products and higher expected prices more than offset growth in grain consuming animal units.

U.S. corn exports are expected to decline 125 million bushels in 2018-’19. Reduced exports from Argentina and Brazil are expected to boost U.S. exports during the first half of 18-’19. However, a nearly 265-million-bushel increase in the combined corn exports for Ukraine and Russia is 2018-’19 will likely increase competition for the U.S., reducing the forecast U.S. share of global corn trade from a year ago. With total U.S. corn supply falling faster than use, 2018-’19 U.S. ending stocks are down 500 million bushels from last year, reaching 1.7 billion. The season-average farm price is projected at $3.30 to $4.30 per bushel, up 40 cents at the midpoint from 2017-’18.

Global corn production is forecast up from a year ago, with the largest increases for China, Brazil, Argentina, Ukraine and Russia. Global corn use is expected to grow 2 percent, while global corn imports are expected to increase 5 percent. Notable forecast increases in corn imports include Vietnam, China, Bangladesh, Iran, Malaysia, Mexico and Saudi Arabia. Global corn ending stocks are down 35.8 million tons from a year ago, and if realized would be the lowest since 2012-’13. For China, total corn supply is down 11 million tons in 2018-’19, as larger production and imports are more than offset by lower beginning stocks. Corn area is projected higher on current cash and futures prices that are above a year ago.