USDA is projecting a large corn crop for the U.S. The latest estimate from the agency out May 10 put 2019 production at 15 billion bushels, with an average yield of 176 bushels per acre. New crop ending stocks are now pegged at 2.48 billion bushels.
Chip Nellinger of Blue Reef Agri-Marketing said the report threw out bearish numbers, but it also raises questions about if USDA’s trend line yield estimate is attainable with less than prime planting conditions across the Midwest. He said USDA’s new crop ending stocks number was definitely a surprise to many.
“That was 100 million bushels above the highest expectations,” said Nellinger. “It’s a little disappointing that USDA, as wet as it is, stuck with a 176 bushel (per acre) yield.”
He said the silver lining may be the markets are baking in a huge corn crop early, and any additional weather and production hiccups could fuel the market.
“It might be the friendliest thing that could happen, because we are going to bottom earlier and build the worst case in sooner, so longer-term if we continue to fight wet weather, that could actually end up being supportive,” he said.
Nellinger knows weather is currently taking a backseat to the uncertainty surround trade, and the escalating trade war between the U.S. and China. He said demand will be a factor moving forward with corn prices, but production is also key.
“We are 7 to 10 days away from a real problem, if the extended forecast pans out like it looks today,” he said.