Department of Agriculture officials estimate 2021 corn ending stocks at 1.55 billion bushels in the World Agricultural Supply and Demand Estimates report released Tuesday, down slightly from last month's projection of 1.7 billion bushels but less than half the 3.32 billion bushels estimated last May.
American Farm Bureau Federation Chief Economist John Newton said it’s unfortunate it takes so long to get a good grip on the actual size of the crop.
“The challenge for producers is that they’ve been marketing a crop, for the most part, in an environment where the market thought it was oversupplied,” Newton said. “Now, the market thinks it's tight and is potentially trying to ration. Not a lot of guys have grain to sell at $5 a bushel."
March corn futures closed 25 cents higher at $5.17, with soybeans 47 cents higher at $14.18, and wheat 30 cents higher at $6.65.
In May, USDA was expecting 97 million acres of corn to be planted, estimated to produce 15.99 billion bushels.
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“After today’s reduction in yields and slight reduction in planted area, while harvested area remained unchanged, we’re looking at a slightly more than 14-billion-bushel crop,” Newton said.
USDA's estimate for this year's corn crop dropped from 14.5 billion bushels in December to 14.18 billion bushels this month. The estimate for corn harvested yield dropped to 172 bushels per acre from 175.8 bpa.
Total domestic use for corn was lowered from 12.17 billion bushels in December to 12.02 billion in January, but Newton said production outweighed demand changes. The season-average corn price received by producers jumped 20 cents to $4.20 per bushel.
Soybean production is estimated at 4.13 billion bushels, which is down 35 million bushels from last month, according to USDA. Harvested area is estimated at 82.3 million acres, which is slightly up from the prior report. Yield is estimated at 50.2 bushels per acre, down a half a bushel from 50.7 bpa. The average soybean price increased from $10.55 last month to $11.15 in January.
USDA is expecting a stable U.S. wheat supply, higher domestic use, unchanged exports, and lower ending stocks for 2020/21. In the department’s analysis, projected 2020/21 wheat ending stocks dropped 26 million bushels to 836 million bushels, down 19% from last year, according to the report, which increased the average farm price by $0.15 per bushel to $4.85.