The World Board reduced corn ending stocks for the 2019-20 growing season by 18 million bu., but it’s the boost to the carryover number from 2018 that caught the attention of Farm Journal Economist Chip Flory.
“Surprise, surprise, they went back and adjusted the 2018 corn crop down 80 million bu and then made some fairly dramatic cuts to the feed and residual estimate from 2018-19 which actually resulted in a 107 million bu. increase in beginning stocks for the 2019-20 marketing year beginning stocks,” Flory told AgDay Television’s Clinton Griffiths. “Yes, last year’s carryover. Yes, the Sept. 1, 2019 corn stocks estimate was adjusted up 107 million bu.”
The January World Agricultural Supply and Demand Estimates (WASDE) reduced feed and residual use estimates for corn in the 2018-19 growing season while raising the 2019-20 feed and residual use estimate.
“They added 250 million bushels to that feed and residual usage estimate for corn,” Flory said. “I think what all this is telling us is that USDA World Board has gone through a re-evaluation of the feed and residual category and are trying to give us more accurate numbers to reflect more animal feed consuming units out there.”
Flory noted that USDA did not make any adjustments to corn estimates relative to the pending Phase One trade agreement with China.
“They took 75 million bu. off the corn export estimate. I thought maybe even though the numbers are pointing in that direction, I thought maybe they might punt with the China trade team coming to the U.S. next week to sign phase one of the trade agreement,” Flory said. “I thought maybe they would just leave things alone. They didn’t”
See Chip Flory’s full analysis of Friday’s USDA reports in the video below.