Extension Economist – Grain Marketing in the Department of Agricultural Economics
Texas A&M University
Mark Welch, Texas A&M AgriLife Extension economist, College Station, says the U.S. Department of Agriculture’s recently released report shows national corn supplies carried over from 2018 were lower than expected. The U.S. typically carries 15-20 percent of the national crop into the next growing season.
The report estimated the U.S. corn stock was at 12 percent, Welch says.
“The carryover corn stock has been going down the last three years,” he says. “At 12 percent, that’s tight. If we get to 10 percent, that’s tight, tight and an indication that without record yields we need more corn acres.”
Prices have moved lower despite the report of reduced supplies, Welch says. Domestic corn use estimates were lowered by USDA as well, which offsets some impact of the lower production numbers.
“Prices actually went down after the report came out,” he says. “We would think in the context of supply and demand there would be some degree of support for higher prices, but that hasn’t happened so far.”
Welch says uncertainty because of the ongoing trade talks with China, specifically soybean exports, could be dampening a positive reaction within the corn market. Soybeans and cotton remain competitive crops for growers to consider as corn lingers just below $4 per bushel.
Wet weather across much of Texas and the Corn Belt in the Midwest could further exacerbate the nation’s corn supply, he says.
“The short-term problem for producers is being able to do field work and prepare for planting,” he says. “We have a good moisture profile that could support above-normal yields, but they still have to get the crop in the ground.”
Welch says conditions have been cold and wet throughout much of the Midwest and producers are well behind on tillage and fertilizer schedules.