Crop conditions that remained positive all summer long gave the USDA ammo to increase yield potential to a record 175.1 bushels per acre. If realized, this would be the largest yield, besting the previous record of 171 bushels per acre set in the 2014/’15 marketing year.
Ultimately, this would lead to a production level of 15.15 billion bushels. The USDA generously has increased the demand scenario for new-crop corn in the way of feed demand and exports. Corn for feed demand jumped to 5.675 billion bushels and exports to 2.175 billion bushels. If realized, the, current feed and export projection would be the highest figure since 5.858 and 2.437 billion bushels respectively, were used in 2007/’08.
In its August report, the USDA increased new-crop feed demand for next year while it. decreased Grain Animal Consuming Units (GCAU) days later, leading traders to believe the feed demand figure may be a little generous. Overall carry-out for new crop was increased to 2.409 billion bushels or a 16.6 percent carry-out to use ratio. This would be the largest carry-out to use ratio since 2006/’07.
These type of figures will keep upside resistance on corn and the overall coarse grains complex. Exports will be susceptible to how the U.S. dollar trades well into the grain marketing year and to South American weather after a very disappointing Safrinha crop in Brazil. World corn carry-out increased for next year but the carry-out to use ratio has remained at a steady three-year pace. indicating an increase in global demand next year.
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