Increased Corn Production Driving Prices Lower
U.S. corn production could total 14.18 billion bushels in 2017/18 if forecasts reported in U.S. Department of Agriculture reports released are realized. This according to a release from the National Corn Growers Association (NCGA).
With projected ending stocks higher and feed and residual demand increases offset by decreased demand from the ethanol sector, the season average corn price projections sit ten cents lower than only a month prior, with prices for the crop sitting between $2.80 and $3.60 per bushel.
Wesley Spurlock, president of the NCGA and a farmer from Stratford, Texas, tells us,
The farm economy continues to struggle, and that's why it's so important that we encourage and grow corn markets wherever possible. From growing our export markets through trade agreements to supporting the ethanol and livestock industries, whether it be by protecting the Renewable Fuel Standard in Washington or building demand for higher blends around the country, NCGA continues working tirelessly on behalf of America's farmers to build a sustainable, thriving future for both their farms and their families.
Feed and residual use for 2017/18 was raised by 25 million bushels from last month's report, due to the larger crop estimate and lower projected prices, but this was offset by a 25 million bushel decrease to projected ethanol use resulting from lowered export expectations. A 50 million-bushel decrease to other industrial demand estimates drove total usage down further.
At the same time, the projected national yield sits .4 bushels per acre above last month's report at 169.9 bushels per acre. Despite decreased beginning stock projections, ending stock projections were raised by 62 million bushels due to the aforementioned factors. See the full report.