Friday’s WASDE report noted some expected changes to the domestic corn balance sheet, including supply reductions that were partially offset by adjustments to demand projections.
Planted and harvested acreage for 2020/21 were both reduced by 1 million acres, with the latter now pegged at 82.5 million. Yield was also lowered minimally to 178.4 bushels per acre. Considering the adjustment to 2019/20 ending stocks, total supply for the current crop year fell by almost 450 million bushels. Stocks-to-use is now projected at 14.8 percent. Corn futures were up by as much as 8 cents at its release and bullishness in soybeans likely helped to pull values higher, as well.
The reduction in 2020/21 ending stocks—now pegged at 2.167 billion bushels—was limited by downward adjustments to two demand categories: feed and residual and food, seed, and industrial. Feed and residual usage dropped by 50 million bushels. Feed demand for 2019/20 had been understated by 227 million bushels, possibly providing insight as to which category caused the miscue in the Jun. 1 stocks number. As a whole, that category’s demand increased YOY by nearly 400 million bushels or 7.3 percent in 2019/20. Taking into account the issues with meat processing capacity between March and June, livestock producers being forced to continue feeding beyond typical slaughter dates likely was as impactful as livestock inventories remaining strong throughout the 2019/20 marketing year.