1. U.S. Outlook
The record-setting size of the 2016 U.S. corn crop has created an abundant supply of corn for MY16/17. 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 MY16/17 to be the highest on record.
Corn use for food, seed, and non-ethanol industrial (FSI) purposes is expected to remain largely unchanged in MY16/17 compared to MY15/16, continuing the pattern of the previous four marketing years.
Projected MY16/17 corn use for ethanol is slightly higher than the previous marketing year. The rise in projected ethanol use is influenced, in part, by low gasoline prices supporting increased domestic gasoline demand, therefore expanding the domestic ethanol market. Other factors impacting the projected ethanol use include competitive ethanol blend prices, small increases in ethanol production efficiency, and moderate increases in substitution of corn as an ethanol feedstock.
Domestic corn use for feed and residual use is expected to be 13.2 mmt higher (10.1% increase) in MY16/17 than in MY15/16. Feed demand for corn is expected to be supported by low corn prices, therefore decreasing the feed costs, and a large inventory of livestock and poultry.
U.S. corn exports during MY16/17 are projected to be about 17% higher than last year and the highest since MY07/08. This projection is supported by an ample supply and a 6.6% increase in global demand from MY15/16 to MY16/17.
MY16/17 corn ending stocks are projected to be 38.3% higher than the previous marketing year, primarily due to large corn crops in consecutive years. The stocks-to-use ratio is projected to be 16.4%, an increase for the fourth year in a row and a level not seen since MY05/06.
2. International Outlook
Global corn production during MY16/17 is expected to be higher than MY14/15’s record-setting production, due to larger crops in both the United States and other major corn-producing countries.
Lower production for MY16/17 in China, Mexico, and Canada will be offset by greater production in Argentina, Brazil, the EU, South Africa, Southeast Asia, Ukraine, and the United States.
In addition to higher projected U.S. exports, total non-U.S. exports are expected to be higher in MY16/17 than in MY15/16.
Increased exports are also expected from the key non-U.S. exporting countries – Argentina, Brazil, and Ukraine.
Global corn use is expected to rise from 958.5 mmt in MY15/16 to 1,021.7 mmt in MY16/17, a 6.6% annual increase.
With the exception of South Korea and Japan, corn use is anticipated to be higher in MY16/17 than in MY15/16 for the major importing countries and areas (Egypt, the EU, Mexico, and Southeast Asia). In addition, corn use is also projected to increase from MY15/16 to MY16/17 for the major exporting countries (Argentina, Brazil, Canada, South Africa, Ukraine, and the United States).
A decrease in year-over-year imports is expected globally in MY16/17. An increase in imports by Turkey will be countered by decreases in projected MY16/17 corn imports in Egypt, Japan, Southeast Asia, and South Korea.