US Corn Balance Sheet Tightens Despite Huge Harvest

The US corn balance sheet is getting tighter, even though farmers are on track to harvest a massive 15.8 billion-bushel crop. The September World Agricultural Supply and Demand Estimates from the USDA shows that the stocks-to-use ratio has fallen below 10%, indicating a smaller supply cushion relative to demand.

The reduced yield estimate of 178.5 bushels per acre, down 2.2 bushels from August, led to a lower projected production of 15.8 billion bushels, a decrease of 213 million bushels. The agency also lowered ending stocks to 1.567 billion bushels, down 86 million bushels from the previous forecast.

The tighter balance means that even with a huge crop, America can still run out of corn if demand absorbs too much of available supplies. The USDA has already reduced projected feed and residual use by 150 million bushels, which will be crucial in determining how tight the balance ultimately becomes.