Chicago Board of Trade Market News
Outlook: In its first look at the 2018/19 crop year, USDA failed to substantially surprise the corn market, despite larger reductions in ending stocks. USDA reduced U.S. ending stocks by 23 percent. The reduction, along with other adjustments, drove world ending stocks down 20 percent to 159.15 MMT. World production forecasts hit 1,056 MMT, a 2 percent increase from the prior crop year. Corn production is forecast to expand the most in China, Brazil, Argentina, and through the Black Sea region, providing weather remains favorable for crop production in the coming year.
USDA’s forecast for the U.S. corn balance sheet included 142.88 MMT of corn for ethanol use (a 1 percent increase from the prior year) and a 3.175-MMT reduction in feed and residual use.
Outside the U.S., notable 2018/19 figure include 96 MMT of production forecast from Brazil but nearly steady exports (31 MMT) from the same country, 41 MMT produced from Argentina (and a corresponding 2 MMT increase in exports), and Ukraine’s 6 MMT jump in production. Chinese production is forecast at 225 MMT (up 4 percent) and the country’s exports are forecast at 5 MMT, a 25 percent increase from 2017/18.
Beyond corn, USDA’s estimate for 2018/19 U.S. sorghum included 5.9 million acres of planted area, 8.712 MMT of production, and 4.191 MMT of exports, leaving 0.686 MMT of ending stocks. USDA increased its price forecast for sorghum to a range of $3.10-$4.10/bushel.
U.S. barley fundamentals in 2018/19 include 2.3 million planted acres, 3.201 MMT of production, and 0.109 MMT of exports versus 3.919 MMT of domestic use. Barley ending stocks could fall to 1.023 MMT in the coming year, down from 1.415 MMT in 2017/18. USDA increased the barley price forecast to a range of $4.00-5.20/bushel.
Today’s Export Sales report from USDA featured 695 KMT of net corn sales and 1.785 MMT of exports. Corn sales have moved back to their seasonal pace while exports remain well above their seasonal tendencies. The report also featured 191 KMT of sorghum shipments and 100 MT of barley exports this week.