The feed grain balance sheet released for January by the US Department of Agriculture (USDA) saw some cuts in feed use, price fluctuation and minor changes to stocks.
It tracked change to the expected US 2017/16 corn crop along with an uptick in sorghum production and drop for barley, said the department.
“Feed grain balance sheets for 2016/17 are nearly steady this month, with the most significant changes a 25-m bushel increase in corn used for ethanol, a 50-m bushel cut in feed and residual use, and minor changes resulting from [National Agricultural Statistics Service] NASS stocks data,” said the USDA.
Corn conditions
The amount of corn harvested and the acres planted for 2016/17 were reduced and corn yield was lowered by about 0.7 bushels an acre, the department said. “Planted area is reduced 486,000 acres to 94m, and harvested acreage dropped 88,000 acres to 86.7m,” it added.
However, production is still estimated to be a record 15.15bn bushels, the department said. The corn supply is also projected to be a record at 16.94bn bushels – even as the amount dropped from the previous expectation.
Disappearance for the 2016/17 crop is expected to be lower from the previous prediction, said the department. Feed and residual use for the month was dropped by 50m bushels based on the smaller crop, increased corn use in ethanol, potential for higher prices and bump to sorghum feeding.
But, feed and residual use for the first quarter, from September to November, was 2.28bn bushels – an improvement from 2.18bn the previous year, the department said. Food, seed and industrial corn use also is predicted to be up from the previous year based on ethanol use.
The forecast average price for corn producers for 2016/17 also was raised slightly, moving $0.05 on each end for a range of $3.10 to $3.70 per bushel, the department said. “The corn price increase reflects higher sales prices year-to-date and expectations of higher prices for the other major field crops such as soybeans and wheat,” it added.
Feed grain use
The feed and residual use of other feed grains and wheat, on a September to August basis for 2016/17, is predicted to be lower than last month, said the USDA. However, the total forecast for use is 155.6m tons, which remains above the amount used in 2015/16.
Corn is expected to account for 91% of feed and residual use for 2016/17 – a decline from the 94% set in 2015/16, the department said.
“The projected index of grain consuming animal units (GCAU) in 2016/17 is 95.80m units, up from 94.87 in December and up 1.64m units from 2015/16,” the department said. “Feed and residual per GCAU for 2016/17 is estimated at 1.62m tons, down from last month and up 0.15m tons from 2015/16.”
The amount of GCAUs has been increases based on a hog production report, the department added.
Sorghum, barley and oat predictions
The sorghum supply for 2016/17 was increased by 18.1m bushels from prior predictions, said the department, but it remains 16% behind last year’s supply. The increase also offset a slight drop to the carry-in.
However, feed and residual use is predicted to be up 15m bushels to 105m bushels as sorghum prices remain competitive, the department said.
Total use is set at 480m bushels, said the USDA. Ending stocks for 2016/17 are expected to increase to 37.9m bushels but are still close to last year’s carryout.
“The forecast average price received by producers for 2016/17 is lowered $0.15 on both the high and low ends of the range to $2.65 to $3.15 per bushel, for a midpoint of $2.90 per bushel,” said the department. “The large corn crop has weighed on prices for sorghum.”
US barley stocks have been lowered to about 317.4m bushels, said the department. But, feed and residual use was dropped by 5m bushels based on indicated disappearance for the first half of the marketing year.
Exports are anticipated to be down 2m bushels based on year-to-date shipments, however, ending stocks were raised by 5m from the last estimate, the department said. Price per bushel was increased $0.05 on each end for a range of $4.60 to $5.20.
Oats also saw an increase of $0.05 on each end for a price per bushel range of $1.80 to $2.10, the department said. “In both cases, the price response maintains the historical relationship between corn and other feed grains, while also reflecting recent price strength in the oats market,” it added.
The overall oat supply for 2016/17 saw a slight drop in ending stocks, the department said.
Global perspective
From a global perspective, production of feed grains for 2016/17 is predicted to be down by about 1.7m tons for a total of 1.33bn tons, said the USDA.
“Reduced estimated US production drives the drop, with foreign production forecast down 0.2m tons to 925.1m,” said the department. “Foreign corn production is slightly up by 0.2m tons this month with a number of offsetting changes, while foreign barley prospects are reduced 0.7m tons, millet is up 0.1m, sorghum is trimmed 0.1m, and rye is raised 0.2m tons.”
Global coarse grain use saw a slight increase, which is expected to offset the US decline in feed grain consumption, said the department.
“The largest increased corn use for feeding is projected for Brazil, up 0.5m tons this month,” said the department. “Brazilian livestock (pork and poultry) is expected to grow by about 2-3% this year, and the increase is setting corn feeding in line with this growth, while the massive recent imports of corn from Argentina and Paraguay support this increase.”