National Corn Growers releases World of Corn report

The National Corn Growers Association’s 2015 World of Corn report analyzes the record corn harvest of 2014.
U.S. corn farmers harvested a record 14.2 billion bushels of corn in 2014, with a record national average yield of 171 bushels per acre.
“America’s corn farmers worked tirelessly in 2014 to grow a record crop,” NCGA President Chip Bowling and CEO Chris Novak write in the report’s introduction. “The unparalleled abundance has positive implications for every American. From a driver filling up a car to a shopper buying wholesome, nutritious (food) for a family, the incredible innovation in American agriculture improves lives across the country.”
This year’s report also includes two compendium pieces that discuss ethanol and biotechnology.
The report covers statistics and information about U.S. production, global production, a consumption overview, consumption of food and feed.
At a glance, the report says:


• 90.6 million acres of corn were planted
• 83.1 million acres were harvested
• 14.2 billion bushels were produced
• $51.9 billion was the corn crop value
• $3.65 was the average price per bushel
U.S. crop acres harvested (1,000 acre):


• Corn (grain): 83,136
• Corn (silage): 6,371
• Soybeans: 83,061
• Wheat: 46,381
2014 crop value, in billions


• Corn: $51.89
• Soybeans: $40.48
• Wheat: $12.36
The world’s total corn production was 38,898 million bushels.

Economists monitoring corn consumption prospects

With the start of the new marketing year only a week away, the process of monitoring corn consumption and corn consumption prospects is underway.
According to Darrel Good, a University of Illinois agricultural economist, not much is known about consumption prospects as the ongoing process of updating expectations begins.
“In the case of feed and residual use of corn, the USDA’s quarterly Grain Stocks reports are the only source of data on actual consumption,” Good said.
The Sept. 1, 2014, corn stocks estimate to be released on Sept. 30 will allow the calculation of the magnitude of feed and residual use of corn for the final quarter of the 2013-14 marketing year and will provide some guidance for potential use during the year ahead. Expectations of feed use for the year will be derived primarily from weekly, monthly, and quarterly U.S. Department of Agriculture (USDA) reports of livestock and poultry inventories.
“Feed use of corn will not receive much support from the beef sector. The liquidation of the cow herd and the smaller calf crops of the past few years mean there are fewer cattle available for feeding, and that deficit will continue for an extended period. The USDA reported that for feedlots with a capacity of 1,000 head or more, there were 2 percent fewer cattle on feed as of August 1 this year than on August 1 last year. Seven percent fewer cattle were placed on feed during July 2014 than during July 2013,” Good said.
He said the poultry and dairy sectors appear to be experiencing some very modest expansion. The USDA reported that the number of broiler chicks placed for meat production during the two weeks ended August 16 was up 2 and 1 percent, respectively, compared to placements of a year earlier.
“Two weeks do not constitute a trend, so that placement will continue to be followed closely to determine if expansion is actually underway,” Good said.
The average number of layers has been running 1 to 2 percent above those of a year ago each month this year. The USDA also reported that milk cow numbers in 23 selected states were up about 1 percent in July.


Uncertainty in hog sector
According to Good, the most uncertainty about livestock production comes from the hog sector. The USDA reported that the June 1 inventory of market hogs was 5 percent smaller than the inventory of a year earlier, but producers expected to increase the number of sows farrowed by 4 percent in the June-September quarter. Production prospects continue to be clouded by the ongoing impact of the porcine epidemic diarrhea (PED) virus on the number of pigs actually weaned.
The USDA’s monthly Livestock Slaughter report showed a 7 percent year-over-year decline in hog slaughter in July. That decline was partially offset by a 5 percent increase in average slaughter weight. The USDA’s Hogs and Pigs report to be released on Sept. 26 will provide additional information about pork production prospects during the 2014-15 corn marketing year. Good said that because feed consumption of corn includes an unknown and sometimes surprising residual component, only the quarterly stocks estimates will provide a measure of actual disappearance.


Corn exports
Sales of U.S. corn for export during the 2014-15 marketing year were reported at 365 million bushels as of August 14. Sales are about 50 million bushels smaller than those of a year ago, but about 60 million bushels larger than the average for the years 2008 through 2012, Good said. He explained that last year, China had purchased 117 million bushels of U.S corn, compared with essentially none this year. Sales to unknown destinations are also down about 40 million bushels.
On the other hand, sales to Japan and South American destinations are larger than those of a year ago. Total export sales as of August 14 accounted for 21 percent of the USDA’s projection of total marketing-year exports, about the same as sales of a year earlier.
“The level of export sales to date is in line with USDA’s projection of exports for the year,” Good said. “However, the seasonal pattern of sales varies from year to year so that it is not yet known whether the current level of sales reflects only timing decisions or is indicative of total export potential.
“There are some early signs that corn consumption during the year ahead will increase modestly in response to lower prices,” Good concluded. “However, that response is not yet large enough to offset the impact of the market expectation of an even larger corn crop than was forecast by USDA two weeks ago. Corn prices are expected to stay under some pressure at least through the USDA’s Sept. 11 Crop Production report. The size of the corn crop forecast in that report will be important in determining where the low may be in the corn market,” he said.

Corn consumption continues to exceed projections

The U.S. Department of Agriculture’s (USDA) World Agricultural Supply and Demand Estimates Report (WADSE) released on April 9 projected corn stocks at the end of the current marketing year at 1.331 billion bushels. The projection of year-ending stocks has declined for five consecutive months and is now 556 million bushels smaller than the November 2013 projection.
Compared with consumption projections made in November, current projections are 100 million bushels larger for corn used for ethanol production, 350 million bushels larger for exports, and 100 million bushels larger for feed and residual use. According to University of Illinois agricultural economistDarrel Good, there have been minor changes in the estimate of stocks at the beginning of the marketing year, the projection of imports, and the projection of other domestic consumption.
“With about 4.5 months left in the marketing year, there is opportunity for the consumption projections to change again,” Good said. “In the case of ethanol use of corn, the USDA projects consumption during the current marketing year at 5 billion bushels. That projection is 352 million bushels, or 7.6 percent, larger than consumption in the previous year and equal to consumption in the 2011-12 marketing year.”
Good said that, based on monthly U.S. Energy Information Agency estimates of ethanol production for September 2013 through January 2014 and weekly estimates for February and March, ethanol production in the first seven months of the marketing year was 11.7 percent larger than production during the same period last year.
“That comparison is a little misleading because year-over-year production was down sharply in the first half of the 2012-13 marketing year and near the previous year’s level in the last half,” Good said. “Still, to reach the USDA projection of corn used for ethanol production this year, ethanol production during the last five months of the corn marketing year needs to be only 2 percent larger than production in the same period last year. With a slight increase in domestic ethanol consumption, an improvement in domestic rail logistics, and a continued positive trade balance, it appears that ethanol production (and therefore corn consumption) could exceed the current projection,” he said.
Corn exports during the current marketing year are projected at 1.75 billion bushels. The USDA reported cumulative export inspections through the first 31.7 weeks of the year at 991 million bushels. Official Census Bureau estimates of exports through the first six months of the year exceeded export inspection estimates by 28 million bushels.

Corn China's largest food product in 2012

Corn became China's largest food product in 2012, overtaking rice as domestic production increased 8 percent to 208 million metric tons, according to the Chinese Academy for Social Sciences. Rice production increased 1.6 percent to 204 million metric tons.
China also imported 5.2 million metric tons of corn in 2012, up 197.1 percent from 2011, while rice imports grew 296.2 percent to 2.37 million metric tons. The report attributed the increase in corn demand to rapid development of husbandry and demand from industrial processing. “China's foodstuffs demand has expanded fast mainly because food has been used for purposes other than basic feeding,” said Guo Wei, director of the rural branch of the National Policy Research Office at the State Council.
While Chinese grain consumption has been reduced to 60 percent of 1990's level, meat consumption has risen 44.7 percent compared to 1990, poultry consumption has risen 209 percent and milk consumption by 296 percent. Corn has also been increasingly processed to starch, albumen powder and ethanol, boosting the demand for corn.

China feed mills double corn purchases in March

Chinese feed mills bought 600,000 metric tons of U.S. corn in March, in nine cargoes for delivery starting in October, twice as much corn as they purchased in February. The purchase brings total imports to roughly 900,000 metric tons of corn so far for 2013, according to industry experts.
Corn on the Dalian Commodity Exchange traded at 2,447 yuan per metric ton (about $10 per bushel) at 1:39 p.m. local time on March 13, while grain on the Chicago Board of Trade was at $7.1525 per bushel. Global demand will exceed supply by 13.7 million metric tons in the 2012–2013 season, according to the U.S. Department of Agriculture.
China bought a record 5.23 million metric tons of corn from overseas in the marketing year ended September 30, 2012, and shipments for 2013 are forecast to fall to 2.5 million metric tons, according to the USDA.

US corn surplus estimate up 5 percent on demand drop

The U.S. corn surplus estimate is up 5 percent on slowing global demand, with current U.S. Department of Agriculture numbers at 632 million bushels on August 31, according to the latest reports. The inventory increase, up from January's 602 million bushel estimate, is still significantly less than 2012's 989 million bushels.
The average estimate of 31 analysts in a Bloomberg survey was 616 million bushels. Corn futures have dropped 16 percent since reaching a record in August 2012 as global supplies improved and high prices slowed demand for U.S. exports and ethanol.
U.S. exporters will sell 900 million bushels of corn in the year that ends August 31, down from 950 million forecast in January and the lowest since 1972, according to reports. In 2012, exporters shipped 1.543 billion bushels. Sales since September 1 are 52 percent behind a year earlier, say USDA data.
An estimated 4.5 billion bushels of corn will be used to produce ethanol, unchanged from the January forecast and less than 5.011 billion in 2012, according to the USDA. Feed demand was forecast at 4.45 billion bushels, also unchanged from January and down from 4.548 billion bushels in 2012.
World output in the crop year that began October 1, 2012, will be 854.38 million tons, up from 852.3 million tons forecast in January and down from 882.47 million in 2012. Global consumption is forecast to fall to 867.34 million tons from 879.39 million tons in 2012.
Worldwide inventories at the end of the marketing year will be 118.04 million tons, up from 115.99 million predicted in January and down from 131.01 million tons in 2012, according to the USDA. 

Argentina corn-planting area to drop 10 percent

Argentina's total corn-planting area is forecast to drop 10 percent in the 2012–2013 season, to just over 4 million hectares, according to the Rosario Grain Exchange. The Buenos Aires Cereals Exchange has forecast it even lower, at 3.4 million hectares, down 12 percent.
In many areas yields could set new records, but some of the lower fields may be too wet, said the Rosario Exchange. High global corn prices due to the U.S. drought have made the crop an attractive one to Argentina farmers, and the country is already the world's number two corn exporter behind the U.S.

China may buy Argentina corn as demand increases

China may begin purchasing corn from Argentina as China's demand increases and Argentina's genetically modified varieties gain approval, according to Norberto Yauhar, Argentina's agriculture minister.
Argentina has already been listed as an approved supplier, but must demonstrate to China that its genetically modified corn is source from approved varieties. A second challenge may involve Argentina's supplies, as the country's output has been reduced by drought, according to Yauhar. Argentina’s corn harvest may shrink to about 21.5 million metric tons in the year that ends Sept. 30, from 23.6 million metric tons in the previous year, while exports will drop to 14 million metric tons from 16 million metric tons, according to the U.S. Department of Agriculture.
Corn imports by China may advance 35 percent as an increase in meat demand boosts consumption of grains to feed chickens and pigs. Corn consumption rose 53 percent in the past decade as demand grew 41 percent for poultry and 27 percent for pig meat, according to the USDA.

China corn purchases from US increase to 4 million metric tons

China has purchased 120,000 metric tons of U.S. corn for shipment by the end of August, bringing the country's total confirmed purchases this season to nearly 4 million metric tons, according to reports.
Another 120,000 metric tons were sold to an unknown purchaser for delivery in the next September-to-August marketing year, and is believed to be to China, as well, said analysts and traders. China has bought 1 million metric tons of corn from the U.S. in the last two marketing years as the country's demand has outpaced its domestic production, and the U.S. Department of Agriculture predicted that it would import a 17-year high of 4 million metric tons in the 2011–2012 marketing year. That number may now be revised, to 4.287 million metric tons, said analysts.
Confirmed sales to China for the 2011–2012 year currently stand at 3.92 million metric tons, but the number could be higher if any of the "unknown" sales are to China.

Corn prices may decline in next decade

Corn prices, which averaged $6 per bushel in 2011, may decline in the next decade as U.S. production begins to catch up with demand, according to reports.
The average cash price is predicted to fall to $4.54 in the 2013 marketing year beginning September 1, then rise to $4.82 by 2022, according to analysts from the U.S. Congressional Budget Office. Corn futures closed at $6.3175 per bushel on January 30 on the Chicago Board of Trade.
Slower growth in the use of corn for ethanol is “giving trend corn production a chance to catch up and surpass demand growth,” said Keith Collins, a former U.S. Department of Agriculture chief economist. Yield gains may not keep up with Congressional Budget Office predictions, and year-to-year variations in supply and demand may be greater than forecast, said Collins.
Corn use is expected to rise by 14 percent to 15.198 billion bushels by 2022. Production is predicted to rise 8.6 percent, to 15.19 billion bushels, as a 12 percent gain in yields absorbs a 42 percent hike in exports (to 2.63 billion bushels) and an 8.5 percent gain in ethanol use (to 5.425 billion bushels) by 2022, according to analysts. 

China corn production may fall short of consumption

China, the world’s second-biggest corn consumer, will not be able to produce enough corn to meet rising domestic demand even as farmers harvest a record corn crop, the U.S. Grains Council said after completing its fifteenth annual field tour.
Consumption may total 170.1 million metric tons, a record 6.7 billion bushels, in the year that began on October 1, according to Thomas C. Dorr, the Council’s president and CEO. However, according to Kevin Rempp, a member of the Council's Asian advisory team, China farmers may produce 166.6 million tons during the same period, an increase of 5.6% over the previous season — but not enough to eliminate China's need to import corn. Dorr said China may still need to import 5 million to 10 million tons from global suppliers before the end of 2012.
Farmers will harvest an average of 85.9 bushels of corn per acre from an estimated 76.35 million acres in the next year, up from an average yield of 84.7 bushels from 73.82 million acres, Rempp said after sampling fields in September with U.S. and Chinese grain traders, government officials and other council members.

China corn imports may more than double in 2011

China imported 540,000 metric tons of U.S. corn in the year beginning September 1.

China's corn imports may reach 5 million metric tons by the end of 2011, more than doubling the 2 million metric tons the country imported in 2010, according to Abdolreza Abbassian, senior economist with the United Nations' Food & Agriculture Organization.
The country is attempting to boost stockpiles and slow the country's fastest inflation in three years, which currently sits at 6.4%, according to reports. China bought 540,000 metric tons of U.S. corn for delivery in the year starting September 1 and an additional 300,000 metric tons was sold to unknown destinations. This brings the amount of corn sold by exporters without declaring a destination to about 2.5 million metric tons, initiating speculation that the product was bought by China and suggesting that the country is already at roughly 3 million metric tons of imported corn for the year.
Corn traded at $6.5575 a bushel at 4:40 p.m. in Singapore on June 12 after rising 4% when the U.S. Department of Agriculture lowered their estimates on global stockpiles.

Rising Japan corn costs may mean profits for US meat exporters

Rising Japan corn prices may provide an opportunity for larger profits for U.S. meat importers.

Japan's corn prices, rising since the Fukushima power plant nuclear accident on fears that import vessels might be tainted with radiation, may lead to greater profits for U.S. meat exporters as Japan's domestic market becomes more expensive, according to reports.
Higher shipping costs are leading to higher feed prices, which spill into higher domestic meat prices. This chain reaction may lead to U.S. companies like Tyson Foods seeing an increase in their exports to Japan.
Pork and beef orders from Japan increased 20% each in April from March, according to Takamichi Tawara, head of Tyson’s Tokyo office. Its meat exports to Japan reached $400 million in 2010 — 60% pork, 20% beef and the rest chicken and processed food. “The export demand out of Japan has remained very strong,” said James V. Lochner, Tyson’s CEO. “We’ve certainly seen no pullback, and if anything we continue to see strong interest up front.”
Right now, Japanese corn importers are paying 5% more to ship corn from the U.S. Gulf to ports in eastern Japan compared to those in western Japan. “Freight operators are still showing an aversion for eastern Japan,” said Hideo Harada, director for livestock-policy planning at the Ministry of Agriculture, Forestry and Fisheries. “It’s very costly to deliver grains to eastern regions after unloading them at ports in other areas.”

China to limit use of corn in non-feed projects

Corn processing industries are expected to consume 50 million tons of corn in the current marketing year — roughly 29% of the country's total corn output in 2010, said the CNGOIC.

China is making plans to limit the use of corn and edible oils in non-animal-feed projects to secure the country's grain supplies, according to a report by China's top economic planner.
Corn is a particular focus, as ethanol, starch and sweeteners consume roughly one-third of China's corn output, leading to concerns about shortages for feed millers. Corn processing industries in China currently have an annual capacity of 70 million tons, according to Shang Qiangmin, director of the China National Grain and Oils Information Center. The industries are expected to consume 50 million tons of corn in the current marketing year — roughly 29% of the country's total corn output in 2010, said the CNGOIC.
Beijing has ordered banks to stop lending to corn purchasers and has canceled tax breaks for corn processors to limit their expansion, according to reports.