United States corn supply grows as record crop is forecast.

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Record U.S. Corn Supply Grows Even Bigger

Economic pause due to the pandemic has slowed demand for corn as U.S. farmers plant a robust crop.

By Kirk Maltais

June 11, 2020

A strong planting season for U.S. corn is expected to lead to a record-high supply, as demand for the crop remains muted thanks to the fallout from the coronavirus pandemic.

Ending stocks of corn—unsold corn left over after the marketing year is done—are expected to total 3.32 billion bushels in 2020-21, the U.S. Department of Agriculture said in its monthly supply and demand estimate report Thursday. That figure is 58% higher than last year’s ending stocks, according to USDA data.

In the report, a reduction in demand for corn to make ethanol is the key factor driving stockpiles higher. “Corn used for ethanol is lowered reflecting a slower-than-expected rebound in ethanol production,” the USDA said.

Production is also at a record high, with the USDA maintaining its forecast from last month at 15.99 billion bushels. That is up more than 2.3 billion bushels from last year’s total, the result of a record 97 million acres planted this year.

Following the release of the report, most-active corn futures trading on the Chicago Board of Trade rose 0.9% to nearly $3.30 a bushel, which analysts said was a reaction to the USDA’s new figures being less dramatic than expectations.

Big crops and reduced demand due to Covid-19 have been factors keeping grains futures down this year.

On the world stage, U.S. corn faces stiff competition from other nations like Brazil. World corn stockpiles are estimated at 339.6 million metric tons in 2020, up from projections of 337.6 million metric tons by analysts surveyed by The Wall Street Journal.

Demand metrics for corn have been improving in recent weeks—U.S. ethanol production has been returning after sliding to a record low in late April. In the past six weeks, production of the corn-based biofuel rose 56% from April’s low to 837,000 barrels a day, according to data from the U.S. Energy Information Administration released Wednesday.

The recovery in ethanol is still tenuous, however—as a potential spike in Covid-19 cases nationwide could easily see production figures careening lower. “All of this depends on how fast people get back on the road,” said Dave Marshall, farm-marketing adviser with First Choice Commodities in Nashville, Ill.