Fundamentally Speaking

Corn Yields & Stocks Estimates

Joel Karlin
By  Joel Karlin , DTN Contributing Analyst

The USDA released its long-term agricultural baselines recently with twelve years' worth of balance sheet data including the actual figures from the prior two years and then ten years of forward projections starting with the 2015/16 season and going out to the 2024/25 marketing year.

Usually the market does not pay much attention to these figures as the macroeconomic assumptions used in this report were formulated back in October.

Furthermore, the report assumes that there are no domestic or external shocks that would affect global agricultural supply and demand while normal weather is also assumed.

The trade pays far more attention to the balance sheet estimates released at the USDA's annual Agricultural Outlook Forum in late February.

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In this regard, the accompanying graphic shows the USDA baseline assumptions for U.S. corn yields in bushels per acre and ending stocks in million bushels compared with the estimates for each of those categories given at the Feb Ag Outlook Forum usually two weeks later.

Using data from 1999 to 2014 the two yields tend to be very close with the corn yield issued at the Agricultural Outlook (AO) averaging just 0.0375 bpa below the yield forecast made in the Baseline (BL).

The range over that period has been as high as the AO 0.5 bpa above BL in 2010 to the AO 0.4 bpa below the BL in 2008.

When the projected U.S. corn yield is issued at this year's Forum it should be very close to the 167.2 bpa yield estimated in this week's Baseline forecast.

As for ending stocks, the 15 year average difference is quite small with the AO stocks figure averaging 13 million bushels below the ending stocks figure estimated by the BL.

The range is quite large however with last year's BL stocks 496 million bushels greater than the AO stocks estimate while in 2009 the AO stocks number was 716 million bushels greater than the BL figure.

Using the average 13 million difference results in an expected AO figure next week for 2015/16, U.S. corn ending stocks to come in at 1.720 billion bushels.

This may be higher than what the average trade guess is for next year's carryout which we feel is closer to 1.50 billion bushels based on lower corn plantings this spring and a more buoyant export picture.

(KA)

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