KSU Weekly Grain Market Analysis: Positive Corn, Sorghum and Wheat Basis Trends in Kansas

Grain market summary notes, charts and comments supporting the Grain Market Update presented in the KSU Agriculture Today radio program to be played on Friday, May 26, 2017 are available on the Kansas State University www.AgManager.info website at the following KSU web address:

http://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_05-26-17.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, May 26, 2017 on the K-State Radio Network (KSU Agriculture Today Radio) – web player available. A copy of the May 26th recording is available at the KSU Agriculture Today website.

Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…

“Final Planting Date” of May 25th for Corn in Western KS – Crop Insurance and Likely Maturity Prospects (KSU-Haag and Vandeveer)

The crop insurance “final planting date” for corn across most of Kansas is May 25.  Corn planted after this date faces a declining level of coverage.  Following is an article by Lucas Haag and Monte Vandeveer of Kansas State University addressing these issues.

This article was authored by:

Lucas Haag – KSU Extension Northwest Area Crops and Soils Specialist – Colby, Kansas

Monte Vandeveer – KSU Extension Agricultural Economist – Garden City, Kansas

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Late Planting of Corn

While the precipitation received in western and central Kansas has been wonderful for filling the soil profile and thus has increased yield potentials, it has created significant delays in planting both irrigated and dryland corn.  This late planting situation raises several considerations for producers, particularly hybrid selection with respect to maturity and potential crop insurance implications of late planting from a risk management standpoint.

Corn Hybrid Maturity

Many growers are familiar with corn hybrid maturity being expressed as days of “relative maturity” or RM. This system, in place for many years, has generally been more effective at comparing hybrid maturities within a company as opposed to across companies.  Fortunately, in recent years many seed companies have started providing maturity information expressed as growing degree units (GDU’s). Some companies provide both GDU’s to silking and GDU’s to maturity.

What is a GDU?

Growing degree units or growing degree days are a weather based scale to measure the progression of crop phenology in thermally driven crops such as corn.  GDD or GDU’s are calculated as:

GDU = (Daily Maximum Air Temperature + Daily Minimum Air Temperature)/2 – 50

In the case of corn, when the maximum air temperature is greater than 86° F then the maximum air temperature is set to 86°, as the rate of growth for corn does not increase with increasing temperature above 86° F. Similarly, when the minimum air temperature is less than 50° F we use 50° as the value.

In general, it takes 90-120 GDU’s for corn to emerge, residue and soil conditions contribute a great deal of variability to this range. A 110-day hybrid typically needs around 1500 GDU’s to reach silking and 2670 GDU’s to reach black layer or physiological maturity.

Probabilities of Corn Reaching Physiological Maturity based on Location, Planting Date, and Hybrid Maturity

Using historical weather data, the probability of reaching physiological maturity before a 28° F freeze can be calculated. The threshold of 28 was used as long-term weather records only report the minimum, and not the duration of any given temperature. It takes multiple hours of 32° F to kill corn, but only a few minutes of temperatures at 28° F.

GDU’s were totaled for each year from each of multiple planting dates to determine cumulative GDU’s. This calculation was performed for 33 locations and 11 planting dates across western and central Kansas. GDU’s to physiological maturity for a given days of relative maturity were determined by averaging the GDU’s of a given relative maturity across multiple hybrids from multiple companies.

As an example, the probability table for Colby is shown below.  This is based on weather records from 1900 through 2016. If we were to plant a 113 day hybrid on May 22nd, we see that the probability of reaching physiological maturity before a 28° freeze is 52.4%. Switching to a 108 day hybrid would improve that probability to 80%.

Local data is important in evaluating these probabilities as relatively short distances can result in large changes in probability of success for a given hybrid x planting date combination due to changes in elevation and rate of in-season accumulation of GDU’s. For example, again looking at a 113 day hybrid planted on May 22nd, while the probability at Colby is only 52.4% (red circled value), it is 91.3% at Hill City, 64 miles to the east, and 88.5% at Hoxie, a mere 33 miles to the east .

Worst Case Scenarios for Probability of Crop Maturity

It is important to note that these tables likely represent the “worst-case” scenario for probabilities of success. Data from the eastern Corn Belt suggest that when a hybrid is planted later than its optimal planting date it takes fewer GDU’s to reach physiological maturity. Their data suggest that GDU requirements for maturity are reduced by 6.8 GDU’s for every day that planting occurs after May 1st.  Unfortunately, I have not been able to find data from the Great Plains to either confirm that rate or suggest another rate.

It’s reasonable to believe that corn hybrids here will also reduce their GDU requirement with later planting. To get a full view of possibilities I would recommend you look at the probabilities for the maturity of the hybrid you are considering and then also the probabilities for a hybrid that is 3-6 day shorter. This will likely give you a realistic range of potential outcomes. For example, if you are considering the probabilities for a 110 day / 2670 GDU hybrid, you should consider the range of likely scenarios to be between the values listed for that hybrid and those listed for 108 or 105 day hybrid. So for a 110 day/2670 GUD hybrid planted May 29th at Hoxie, the range of probabilities would be 87.2 to 94.9% (green circled probabilities).

Probability charts for additional locations can be found at www.northwest.ksu.edu/agronomy

Locations included in the analysis with tables that can be found at the link include: Alton, Atwood, Belleville, Beloit, Big Bow, Bison, Brewster, Burr Oak, Cimarron, Colby, Concordia, Ellsworth, Garden City, Goodland, Hays, Hill City, Hoxie, Johnson, Lakin, Leoti, Lincoln, Ness City, Norton, Oberlin, Phillipsburg, Plainville, Quinter, Russel Springs, Scott City, Sharon Springs, Smith Center, St. Francis, Syracuse, Tribune, Ulysses, and WaKeeney.

Crop Insurance Implications  

The final planting date for corn in the majority of Kansas is May 25th (see map below). After the final planting date there is a “late planting period” that extends for 20 days after the final plant date.

Full map can be viewed at: https://www.rma.usda.gov/fields/ks_rso/2017/final/kscorn.pdf

For corn acres that haven’t been planted by the final planting date growers have several options:

  1. Plant the insured crop during the late planting period, and insurance coverage will be provided. The late planting period for corn in Kansas and Nebraska is 20 days after the final planting date. The production guarantee is reduced 1% per day for each day that planting is delayed after the final planting date.
  2. Plant the insured crop after the late planting period has ended if you have been prevented from planting during the late planting period, and insurance coverage will be provided. The insurance guarantee will be 55% of the original production guarantee.
  3. Acreage that was prevented from being planted due to an insured cause of loss can be left idle and receive a full prevented planting payment, also equal to 55% of the original production guarantee.
  4. Plant a cover crop during or after the end of the late planting period and receive a full prevented planting payment as long as it is not hayed or grazed before November 1.   The cover crop cannot be harvested for grain or seed at any time.
  5. Plant another crop (second crop) after the late planting period (if also prevented from planting through the late planting period), and receive a prevented planting payment equal to 35% of the prevented planting guarantee.

For example, consider a grower with a dryland corn APH yield of 105 bushels per acre who has signed up for Revenue Protection coverage with a 75% coverage level.  Using the spring projected price of $3.96/bushel, this grower would have a production guarantee of 78.8 bushels per acre and a revenue guarantee per acre of $311.85 (= 105 bu./acre x 75% x $3.96/bu.).  An acre of corn planted five days after the final planting date, for example, would have its production guarantee reduced 5% (1% for each late day), meaning the revenue guarantee would decline 5% from $311.85 to $296.26.

 

Lucas Haag, Northwest Area Agronomist, Northwest Research-Extension Center, Colby

Monte Vandeveer, Southwest Area Economist, Southwest Research-Extension Center, Garden

KSU Corn Market Outlook in Mid-May 2017: Considering Acreage, Yield and Production Scenarios

This article provides an analysis of U.S. and World corn supply-demand factors and price prospects for the “next crop” 2016/17 marketing year following the USDA’s May 10, 2017 USDA Crop Production and World Agricultural Supply Demand Estimates (WASDE) reports.

Following is a summary of the article on “Corn Market Outlook in Mid-May 2017″ with the full article and accompanying analysis soon to be available on the KSU AgManager website (www.AgManager.info) at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter

 

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Summary

Overview

Since the USDA’s May 10th World Agricultural Supply and Demand Estimates (WASDE) report, JULY 2017 CME corn futures have been moderately volatile – moving both higher and lower within the range of $3.65 ¼ to $3.74.  “Current” MY 2016/17 U.S. corn prices have found some support due to 2017 production uncertainties (i.e., wet soils impacting corn planting & establishment in some regions and varying weather forecasts for summer 2017) and strong U.S. corn use in ethanol production, wet corn milling, exports and to a moderate degree in livestock feeding.

In addition, in the March 31st Prospective Plantings report the USDA forecast fewer U.S. corn planted acres in 2017.  If in 2017 there is a return to trend line U.S. corn yields near 167-168 bu/acre, then 170 bu/acre in 2017, then 2017 U.S. corn production could be in the range of 13.500 to 13.750 billion bushels (bb) instead of the USDA projection of 14.065 bb or the record high of 15.148 bb in 2016.

Forecasts by the USDA and other market analysts that ending stocks of U.S. corn will stay above 2 bb in “next crop” MY 2017/18, coupled with ending stocks-to-use above 14.5%-15.0% in both “current” MY 2016/17 and “next crop” MY 2017/18 has limited any significant corn futures or cash market price rallies to date in Spring 2017.   IF excessive moisture conditions that have developed in the U.S. Corn Belt in late April – mid-May were to continue until late-May and significantly delay planting progress – THEN increased concerns about 2017 U.S. corn production prospects could lead to higher U.S. corn prices in late-Spring – Summer 2017.

Kansas Cash Corn Bids & Basis as of May 17, 2017

Cash corn bids at major grain elevators ranged from $3.07 ($0.65 under JULY futures) to $3.62 ($0.10 under) in Western Kansas and $2.98 ($0.73 under) to $3.31 ½ ($0.40 under) in Central Kansas on Wednesday, May 17th.  This represents a marked increase since October-December 2016 when corn price bids statewide had fallen below $3.00 per bushel – down to $2.66-$2.96 on December 23rd – although not as low as marketing loan rates near $2.05 (central KS) to $2.19 (western KS) per bushel.  Cash corn price bids in east central and northeast Kansas – near river terminal locations – were near $3.48 ½ – $3.51 ½ on May 17th, up from the range of $3.26-$3.28 per bushel on 12/23/2016.  Cash corn bids at Kansas ethanol plants on May 17th ranged from $3.47 ¾ ($0.20 under) to $4.02 ¾ ($0.35 over) – indicating continuing strength in ethanol demand for corn in Kansas and nationwide.

While the “large supply and tight storage availability” situation still predominates in local Kansas grain markets, it is a positive market signal that corn usage has not declined, and that Kansas cash corn prices have enough support to have avoided falling down to USDA loan rate levels.

Other Factors that Could Affect the Corn Market in 2017

  • First, the pace and timing of U.S. farmer marketing of the 2016 corn crop – much of which had been placed in storage after fall harvest and likely has been held for sale through the winter into at least early-spring and some into summer 2017.
  • Second, anticipation of continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock feeding through spring-summer 2017.
  • Third, at least moderate continued strength in U.S. corn exports – at least until what is forecast to be a sizable 2nd crop of corn from South America becomes available on global markets during Summer 2017.
  • And fourth, the always present possibility of broader U.S. and Foreign economic and/or financial system disruptions that could impact grain, energy, and other commodity markets in 2017.  World geo-political events have the potential to provide “shocks” to U.S. and World energy and grain markets – with the impact on the direction of U.S. and World corn markets being difficult to anticipate depending on which countries may be involved and their role in global corn export trade.

USDA Supply-Demand & Price Forecast for “Next Crop” MY 2017/18

Early USDA projections are for 2017 U.S. corn plantings of 89.996 million acres or ‘ma’ (down 4.0 ma).   Harvested acres of approximately 82.4 ma (down 4.35 ma) are forecast, with projected yields of 170.7 bu/ac (vs the record high of 174.6 in 2016), leading to a 2017 U.S. corn production is forecast of 14.065 bb – down from the record high of 15.148 bb in 2016.

The USDA forecast “next crop” MY 2017/18 total supplies to be 16.410 bb – down 530 mb from last year’s record high.  Total use is forecast at 14.300 bb – down 345 mb from last year’s record high.  Ending stocks are projected to be 2.110 bb (14.76% S/U) – down from 2.295 bb (15.67% S/U) in “current” MY 2016/17.  United States’ corn prices are projected to average $3.40 /bu (range of $3.00-$3.80).  This equals the midpoint estimate of $3.40 /bu from “current” MY 2016/17. This scenario is given a 45% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.

Alternative KSU Supply-Demand & Price Forecast for “Next Crop” MY 2017/18

Three alternative KSU-Scenarios for U.S. corn supply-demand and prices are presented for “next crop” MY 2017/18.  Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than projected by the USDA in the May 10, 2017 WASDE report for “next crop” MY 2017/18.

  • KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.556 bb” Scenario (25% probability) assumes: 88.500 ma planted, 81.031 ma harvested, 167.3 bu/ac trend yield, 13.556 bb production, 15.901 bb total supplies, 14.255 bb total use, 1.646 bb ending stocks, 11.55% S/U, & $3.95 /bu U.S. corn average price for “next crop” MY 2017/18;
  • KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.370 bb” Scenario (15% probability) assumes: 88.500 ma planted, 81.031 ma harvested, 165.0 bu/ac yield, 13.370 bb production, 15.715 bb total supplies, 14.155 bb total use, 1.560 bb ending stocks, 11.02% S/U, & $4.10 /bu U.S. corn average price for “next crop” MY 2017/18;
  • KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.155 bb” Scenario (5% probability) assumes: 88.500 ma planted, 80.535 ma harvested, 150.0 bu/ac yield, 12.080 bb production, 14.375 bb total supplies, 13.460 bb total use, 915 million bushels (mb) ending stocks, 6.80% S/U, & $6.00 /bu U.S. corn average price for “next crop” MY 2017/18;

World Corn Supply-Demand Trends

World corn production of 1,033.7 million metric tons (mmt) is projected for “next crop” MY 2017/18, down 3.0% from the record high of 1,065.1 mmt in “current” MY 2016/17, but still up 6.8% from 968.1 mmt in MY 2015/16.  Near record World corn total supplies of 1,257.6 mmt are projected for “next crop” MY 2017/18, down marginally from the record high of 1,278.1 mmt in “current” MY 2016/17, but up from 1,177.5 mmt in MY 2015/16.

World corn exports of a near record 151.9 mmt are projected for “next crop” MY 2017/18, down 4.2% from the record high of 158.6 mmt in MY 2015/16, and up 26.6% from 119.95 mmt in MY 2015/16.  Projected World corn ending stocks of 195.3 mmt (18.4% S/U) in “next crop” MY 2017/18 are down from the record high 223.9 mmt (21.3% S/U) in “current” MY 2016/17, and from 212.4 mmt (22.0% S/U) in MY 2015/16.

Strong World demand for corn at low prices is expected to continue – especially in the United States, Argentina, Mexico, Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine).   An ongoing, strong demand base for corn could help cause sharply increased corn market volatility in the summer of 2017 IF any serious threats emerge to the 2017 U.S. corn crop.

KSU Weekly Grain Market Analysis: Alternative Scenarios for “Next Crop” 2017/18 Corn and Wheat

Grain market summary notes, charts and comments supporting the Grain Market Update presented in the KSU Agriculture Today radio program to be played on Friday, May 12, 2017 are available on the Kansas State University www.AgManager.info website at the following KSU web address:

http://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_05-12-17.pdf

The recorded radio program was aired at 10:03 a.m. central time, Friday, May 12, 2017 on the K-State Radio Network (KSU Agriculture Today Radio) – web player available. A copy of the May 12th recording will be available at the KSU Agriculture Today website after the recording.

Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…

“Deep Numbers” Analysis of the May 10, 2017 USDA WASDE Report (D. O’Brien KSU)

A “deep numbers” analysis of the results of the May 10, 2017 USDA World Agricultural Supply and Demand Estimates (WASDE) report is available on the Agmanager.info website from Kansas State University. The May WASDE report considered “next crop” 2017/18 marketing year, “current” MY 2016/17, and MY 2015/16 supply-demand and price prospects for U.S. crops, and supply-demand prospects for global and country-by-country analysis.

Results are available at the following web address:

http://www.agmanager.info/wasde-quick-analysis-spreadsheet

This “deep numbers” analysis considers how the May 10th USDA WASDE and other National Agricultural Statistics Service (NASS) numbers compare to pre-report trade expectations, last month’s report estimates, and previous years.

World Wheat, Corn, Coarse Grain and Soybean supply demand numbers are also considered in an extended look at production, exports, imports, food-industrial and seed use (for corn and coarse grains), food use (for wheat), crush (soybeans), feed and residual use (corn, coarse grains and wheat), ending stocks, and % ending stocks to use.

Selections from this “deep numbers” WASDE report analysis are as follows:

 

KSU Weekly Grain Market Analysis: Kansas Wheat Tour Graphics, Corn and Soybean “Next Crop” MY 2017/18 Scenarios

Grain market summary notes, charts and comments supporting the Grain Market Update presented in the KSU Agriculture Today radio program to be played on Friday, May 5, 2017 are available on the Kansas State University www.AgManager.info website at the following KSU web address:

http://www.agmanager.info/sites/default/files/pdf/KSRN_GrainOutlook_05-05-17.pdf

The recorded radio program will be aired at 10:03 a.m. central time, Friday, May 5, 2017 on the K-State Radio Network (KSU Agriculture Today Radio) – web player available. A copy of the May 5th recording will available at the KSU Agriculture Today website.

Following are sections of the Working notes for this week’s radio program up on the KSU AgManager.info website…

KSU Corn Market Outlook in Early-May: Alternative Crop Production and Price Scenarios for MY 2017/18

This article provides an analysis of U.S. and World corn supply-demand factors and price prospects for both the “new crop” 2016/17 marketing year following the USDA’s April 11, 2017 USDA Crop Production and https://www.usda.gov/oce/commodity/wasde/latest.pdf reports.

Following is a summary of the article on “Corn Market Outlook in Early-May 2017″ with the full article and accompanying analysis soon to be available on the KSU AgManager website (www.AgManager.info) at the following web address:

http://www.agmanager.info/grain-marketing/grain-market-outlook-newsletter/corn-market-outlook-early-may-2017

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Summary

Overview & Summary

Since the USDA’s April 11th World Agricultural Supply and Demand Estimates (WASDE) report, MAY 2017 CME corn futures have been moderately volatile – moving both higher and lower within the range of $3.54 ¼ to $3.73.  “Current” MY 2016/17 U.S. corn prices have found some support at levels above local marketing loan rates because of the positive impact that low prices have had on the use of U.S. corn in ethanol production, wet corn milling, exports and to a moderate degree in livestock feeding.   In addition, the February 23-24 USDA 2017 Agricultural Outlook Forum together with the March 31st Prospective Plantings report have forecast fewer U.S. corn planted acres in 2017, and with a return to trend line U.S. corn yields, lower 2017 U.S. corn production of 14.065 billion bushels (bb) versus the record highs of 15.148 bb in 2016.

However, projections of ending stocks of U.S. corn staying above 2 billion bushels (bb) coupled with ending stocks-to-use above 15% in both “current” MY 2016/17 and “next crop” MY 2017/18 has limited any significant corn futures or cash market price rallies to date in Spring 2017.   IF excessive moisture conditions that have developed in the U.S. Corn Belt in late April – very early May were to continue until mid-May and significantly delay planting progress – THEN increased concerns about 2017 U.S. corn production prospects could lead to higher U.S. corn prices in late-Spring – Summer 2017.

Cash corn prices at major grain elevators in central and western Kansas ranged from $3.04 to $3.31 on Monday, May 1st.  This represents a marked increase since October-December 2016 when prices had fallen below $3.00 per bushel – down to $2.66-$2.96 on December 23rd – although not as low as marketing loan rates near $2.05 (central KS) to $2.19 (western KS) per bushel.  Cash corn prices in east central and northeast Kansas – near river terminal locations – were near $3.55 on May 1st, up from the range of $3.26-$3.28 per bushel on 12/23/2016.  Cash corn prices at Kansas ethanol plants on May 1st ranged from $3.38 to $3.73 – indicating continuing strength in ethanol demand in Kansas and nationwide.  While the “large supply and tight storage availability” situation still predominates in local Kansas grain markets, it is a positive market signal that corn usage has not declined, and that Kansas cash corn prices have enough support to have avoided falling down to USDA loan rate levels.

Other Factors Potentially Affecting the U.S. Corn Market

Other factors that could affect the U.S. corn market in 2017 include the following:

  • First, the pace and timing of U.S. farmer marketing of the 2016 corn crop – much of which had been placed in storage after fall harvest and likely has been held for sale through the winter into at least early spring 2017.
  • Second, anticipation of continued strong use of 2016 crop U.S. corn for domestic U.S. ethanol production and livestock feeding through spring-summer 2017.
  • Third, at least moderate continued strength in U.S. corn exports – at least until what is forecast to be a sizable 2nd crop of corn from South America becomes available on global markets during Summer 2017.
  • Fourth, the always present possibility of broader U.S. and Foreign economic and/or financial system disruptions that could impact grain, energy, and other commodity markets in 2017.  World geo-political events have the potential to provide “shocks” to U.S. and World energy and grain markets – with the impact on the direction of U.S. and World corn markets being difficult to anticipate depending on which countries may be involved and their role in global corn export trade.

USDA Supply-Demand Forecast for “Next Crop” MY 2017/18

With early USDA projections of 2017 U.S. corn plantings of 89.996 million acres or ‘ma’ (down 4.0 ma).   Harvested acres of approximately 82.4 ma (down 4.35 ma) are forecast, with projected yields of 170.7 bu/ac (vs the record high of 174.6 in 2016), leading to a 2017 U.S. corn production is forecast to be 14.065 bb – down from the record high of 15.148 bb in 2016.

The USDA forecast “next crop” MY 2017/18 total supplies to be 16.435 bb – down 505 mb from last year’s record high.  Total use is forecast at 14.220 bb – down 400 mb from last year’s record high.  Ending stocks are projected to be 2.215 bb (15.58% S/U) – down from 2.320 bb (15.87% S/U) in “current” MY 2016/17.  United States’ corn prices are projected by the USDA to average $3.50 /bu – up from a midpoint estimate of $3.40 /bu from “current” MY 2016/17 – but within the range of $3.25-$3.55 /bu for this marketing year. This scenario is given a 55% likelihood of occurring by KSU Extension Ag Economist D. O’Brien.

Alternative KSU Forecasts for “Next Crop” MY 2017/18

Three alternative KSU-Scenarios for U.S. corn supply-demand and prices are presented for “next crop” MY 2017/18.  Each forecast scenario presents the likelihood of lower U.S. corn acreage, yields and production than projected by the USDA in the February 23-24, 2017 Agricultural Outlook Forum for “next crop” MY 2017/18.

  • KSU “Next Crop” MY 2017/18 Scenario #1) “167.3 bu/ac – 13.556 bb” Scenario (25% probability) assumes: 88.500 ma planted, 81.031 ma harvested, 167.3 bu/ac trend yield, 13.556 bb production, 15.926 bb total supplies, 14.185 bb total use, 1.741 bb ending stocks, 12.27% S/U, & $3.85 /bu U.S. corn average price for “next crop” MY 2017/18;
  • KSU “Next Crop” MY 2017/18 Scenario #2) “165.0 bu/ac – 13.370 bb” Scenario (15% probability) assumes: 88.500 ma planted, 81.031 ma harvested, 165.0 bu/ac yield, 13.370 bb production, 15.740 bb total supplies, 14.080 bb total use, 1.660 bb ending stocks, 11.21% S/U, & $4.05 /bu U.S. corn average price for “next crop” MY 2017/18;
  • KSU “Next Crop” MY 2017/18 Scenario #3) “150.0 bu/ac – 12.155 bb” Scenario (5% probability) assumes: 88.500 ma planted, 81.031 ma harvested, 150.0 bu/ac yield, 12.155 bb production, 14.525 bb total supplies, 13.460 bb total use, 1.065 bb ending stocks, 7.91% S/U, & $4.75 /bu U.S. corn average price for “next crop” MY 2017/18;

World Corn Supply-Demand

Record high World corn production of 1,053.8 million metric tons (mmt) is projected for “current” MY 2016/17, up 9.4% from 963.3 mmt in MY 2015/16, and up 3.7% from 1,016.0 mmt in MY 2014/15.  Record high World corn total supplies of 1,265.6 mmt are projected for “current” MY 2016/17, up from 1,173.1 mmt in MY 2015/16, and from 1,190.8 mmt in MY 2014/15.

World corn exports of 154.4 mmt are projected for “current” MY 2016/17, up 28.7% from 120.0 mmt in MY 2015/16, and up 8.6% from 142.2 mmt in MY 2014/15.  Projected record high World corn ending stocks of 223.0 mmt (21.4% S/U) in “new crop” MY 2016/17 are up from 211.8 mmt (22.0% S/U) in MY 2015/16, and from 209.8 mmt (21.4% S/U) in MY 2014/15.

  • Although World corn ending stocks are projected to be a record high in “current” MY 2016/17 at 223.0 mmt, World corn percent ending stocks-to-use are forecast to actually decline marginally to 21.4%.  Strong World demand for corn at low prices is expected to continue – especially in the United States, Argentina, Mexico, Southeast Asia, China, Ukraine, and other Former Soviet Union countries (less Ukraine).   An ongoing, strong demand base for corn could help cause sharply increased corn market volatility in the summer of 2017 IF any serious threats emerge to the 2017 U.S. corn crop.