Based on significant corn planting delays, only 83 percent was planted by June 9 compared with 99 percent last year, the latest short-term U.S. corn outlook published by USDA in the World Agricultural Supply and Demand Estimates report (WASDE, June 11, 2019) shows a substantial decline in the 2019/20 projections for planted acres, yield, and production. In this second USDA projection for 2019/20, corn production was reduced by 1.350 billion bushels to 13.7 billion bushels from last month (see Figure 1). Corn planted and harvested acres were down 3 million acres each to 89.8 million and 82.4 million acres, respectively, whereas expected average yield corn yield was lowered by 10 bushels to 166 bushel per acre.
In adjusting corn area and yield projections, the USDA considered the significant planting delays that took place during May and early June due to frequent rain across much of the Midwest during that period. In contrast, the first projection for corn area planted (92.8 million acres) published last month, was based on the March 29 Prospective Plantings report from USDA’s National Agricultural Statistics Service (NASS). Last month’s yield projection (176 bushels per acre) was based on a trend model assuming normal mid-May planting progress and summer growing season weather.
One hundred million bushels were added to the new 2019/20 beginning stocks projection. The adjustment came from projected lower 2018/19 corn exports based on current outstanding sales. Projected 2018/19 corn exports were reduced to 2.2 billion bushels from last month’s projection. However, with the substantial reduction in projected corn production, the 2019/20 corn supply was trimmed by 1.235 billion bushels to 15.925 billion bushels. If realized, the 2019/20 corn supply would be 670 million bushels below the estimate for the current marketing year.
With a much lower supply, corn total use in the new marketing year was forecast down 425 million bushels to 14.250, which is 150 million bushels below the expected corn use this year.
Both feed & residual and exports are expected to decline in 2019/20, while corn for ethanol production will continue at the same level projected last month (5.5 billion bushels) (see Figure 1), which is up slightly from the 2018/19 estimate (5.45 billion bushels). As corn supplies are projected to decline more than use, 2019/20 ending stocks are expected down 810 million bushels to 1.675 billion, bringing up the corn price forecast by $0.50 to $3.80 per bushel.
USDA will release its Acreage report on June 28, 2019. This report will provide survey-based indications of planted and harvested area, which will be used for the continued adjustments of the 2019/20 corn production projection. Further acreage and yield adjustments are likely to be seen in future WASDE reports.
 The projection was modeled using a weather-adjusted trend assuming normal mid-May planting progress and summer growing season weather with a stochastic adjustment, which accounts for the asymmetric response of yield to July precipitation.
S. Patricia Batres-Marquez, Senior Research Analyst, Decision Innovation Solutions (DIS). DIS is an Iowa-based economic research firm which provides regular farm economic research for the Iowa Farm Bureau Federation.
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