1. U.S. Outlook
- The projected third-largest U.S. corn crop on record has created an abundant supply of corn for MY18/19. This ample supply has continued to keep downward pressure on corn prices since their peak in MY12/13. The ample supply and low prices are major factors driving the projected domestic use of corn in MY18/19 to be the highest on record.
- Corn use for food, seed and non-ethanol industrial (FSI) purposes is expected to remain largely unchanged in MY18/19 compared to MY17/18, continuing the pattern of the previous four marketing years.
- Projected MY18/19 corn use for ethanol is the same as MY17/18. Corn use for ethanol is influenced, in part, by domestic gasoline demand, with low gasoline prices supporting increased consumption and the expansion of the domestic ethanol market. While gasoline prices have remained relativity low, consumption has stalled, leaving strong export ethanol demand responsible for corn use for ethanol remaining steady.
- Domestic corn use for feed and residual use is expected to be 5.13 mmt higher (3.8% increase) in MY18/19 than in MY17/18. Feed demand for corn is expected to be supported by low corn prices; thereby, decreasing the feed costs and encouraging a large inventory of livestock and poultry.
- While U.S. corn exports during MY18/19 are projected to be only about 0.5% higher than MY17/18, exports for MY18/19 are projected to be the highest on record.
- MY18/19 corn ending stocks are projected to be 16.8% lower than the previous marketing year. Strong domestic and export demand is partially responsible for this decrease as well as two historically large corn crops in MY16/17 and MY17/18 creating large ending stocks in those years.
- In terms of the stocks-to-use ratio, the record 2016 crop’s ratio was 15.6%, the highest since was MY05/06 (17.5%). This ratio has fallen the last two years with MY18/19 projected to have a ratio of 11.9%, which is similar to the average from the past 10 completed marketing years (11.6%).
2. International Outlook
- Global corn production during MY18/19 is expected to be slightly higher than MY17/18 due to slightly larger crops in key corn-producing countries.
- Higher production for MY18/19 in Brazil, Argentina and Ukraine will offset lower production in China, India and the European Union.
- In addition to higher projected U.S. exports, total non-U.S. exports are also expected to be slightly higher in MY18/19 than in MY17/18.
- Exports from key non-U.S. exporting countries are expected to increase (e.g., Argentina and Brazil).
- Global corn use is expected to rise from 1,086.23 mmt in MY17/18 to 1,131.31 mmt in MY18/19, a 4.2% annual increase.
- With the exception of South Africa, Japan and Canada, corn use is anticipated to be higher in MY18/19 than in MY17/18 for the major corn-consuming countries and areas, with China accounting for the largest increase of any country (13.00 mmt).
- An increase in year-over-year imports is expected globally in MY18/19. Decreases in imports by Canada, Japan and Turkey will be countered by increases in projected MY18/19 corn imports by the European Union, Vietnam, China and Saudi Arabia.