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2018/19 Feed and Grain Outlook Summary

Core Content Overview

This report provides a comprehensive outlook on U.S. and global feed grain production, use, and trade for the 2018/19 marketing year. It includes updates on corn, sorghum, barley, and oats, along with international comparisons and projections.

Key Highlights

U.S. Corn Outlook

• Yield Forecast: The second survey-based yield forecast for the 2018/19 corn crop is 181.3 bushels per acre, a 2.9 bushel increase from the previous forecast, setting a new record.
• Production: With a forecasted harvested area of 81.8 million acres, the total corn production is expected to reach 14,827 million bushels, 240 million bushels higher than the previous month's estimate.
• Use:
  • Feed and Residual Use is projected at 5,575 million bushels, 50 million bushels over last month due to larger supplies and lower prices.
  • Ethanol Use is raised to 5,650 million bushels, up 25 million bushels.
  • FSI Use is 7,130 million bushels, up 25 million bushels.
• Exports: Projected at 2,400 million bushels, up 50 million bushels from last month, driven by improved U.S. price competitiveness and reduced Brazilian and Argentine exports.
• Ending Stocks: Projected at 1,774 million bushels, up 90 million bushels from last month, with a stocks-to-use ratio of 11.7.
• Farm Price: The projected season-average price is $3.50 per bushel, down $0.10 from last month.

U.S. Sorghum Outlook

• Production: Increased by 1.05 million bushels to 376.4 million bushels, due to a 0.2 bushel per acre yield increase.
• Use:
  • Feed and Residual Use is 145.3 million bushels, up 1.2 million bushels from last month.
  • Total Use is 149.2 million metric tons, up 5.9 million from the previous year.
• Exports: Revised down to 205.0 million bushels, due to slower export pace.
• Ending Stocks: Increased to 45.7 million bushels, up 6.1 million bushels from last month.
• Price: Projected to be between $2.80 and $3.80 per bushel, with an average of $3.30 per bushel.

U.S. Barley Outlook

• Production: Unchanged at 156.0 million bushels.
• Use:
  • Feed and Residual Use is 10.0 million bushels, down 5.0 million bushels from last month.
  • Total Use is 165.0 million bushels, down 5.0 million bushels.
• Imports: Reduced by 5.0 million bushels to 15.0 million bushels, leading to a lower total supply.
• Ending Stocks: Unchanged at 95.9 million bushels.
• Price: Projected to range from $4.10 to $5.30 per bushel, with an average of $4.70 per bushel.

U.S. Oats Outlook

• Production: Unchanged at 1.0 million tons.
• Use:
  • Feed and Residual Use is 145.3 million bushels, up 1.2 million bushels from last month.
  • Total Use is 149.2 million metric tons, up 5.9 million from the previous year.
• Ending Stocks: Increased to 45.7 million bushels, up 6.1 million bushels from last month.
• Price: Projected to range from $2.50 to $3.10 per bushel, with an average of $2.80 per bushel.

International Outlook

Global Corn Production and Use

• World Corn Production: Projected to increase by 8.0 million tons to 1,069 million tons, with U.S. corn production up 6.1 million tons to 376.6 million tons.
• Foreign Corn Production: Reduced by 1.1 million tons, mainly due to declines in EU barley, Australian barley, Canadian corn, and South African corn.
• World Corn Use: Increased by 4.3 million tons to 1,386 million tons, with the largest increase in EU corn use (up 3.5 million tons) due to higher production and imports.
• Global Corn Exports: Increased by 0.7 million tons to 61.0 million tons, with U.S. exports capturing a larger share due to reduced Brazilian and Argentine exports.
• Global Ending Stocks: Increased by 1.6 million tons to 184.8 million tons, still the lowest since 2012.

Global Sorghum Outlook

• World Sorghum Production: Minimal change at 59.3 million tons.
• Sorghum Exports:
  • U.S. exports are expected to shift from China to EU and Japan, with Japan receiving more due to increased EU demand.
  • Australia is expected to increase its sorghum exports to China by 5 times compared to last year.
• EU Sorghum Imports: Increased by 0.6 million tons, partially offsetting the reduction in Japan.
• Japan Sorghum Imports: Reduced by 0.6 million tons due to more stable feed grain structures.

Key Trends and Drivers

• Supply Increases: Higher yields and production in the U.S. and other countries are driving up supplies.
• Price Competitiveness: Lower prices and improved competitiveness are increasing demand for U.S. corn.
• Export Shifts: The U.S. is gaining market share from Brazil, Argentina, and South Africa due to reduced exports and lower prices.
• Transportation and Policy Challenges: Brazil faces transportation and policy issues that are limiting its export capacity.
• Demand Shifts: The EU is increasing its demand for sorghum, while Japan is maintaining its corn import levels.

Conclusion

The 2018/19 corn and feed grain outlook shows a record yield for U.S. corn, leading to increased supply and lower prices, which in turn boost feed and residual use and exports. The stocks-to-use ratio is also rising due to increased supply. Sorghum and barley show more moderate changes, with sorghum exports shifting to the EU and barley prices increasing slightly. Globally, the U.S. continues to dominate the corn export market, while Brazil, Argentina, and South Africa face reduced export prospects.