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USDA Forecasts Bumper Corn and Soybean Crops

 

Aug 15 - U.S. corn growers are expected to produce a record-high 13.8 billion bushels of corn in 2013, according to the Crop Production report issued Aug. 12 by the U.S. Department of Agriculture's National Agricultural Statistics Service. The forecast production is up 28 percent from drought-hit 2012.

U.S. growers wrapped up planting corn by mid-June, with 97.4 million acres planted to the crop. Also, with 64 percent of U.S. corn crop rated in good to excellent condition as of Aug. 4, corn crop condition remained significantly higher than at this time last year. Based on these conditions, NASS forecasts this year's corn yield at 154.4 bushels per acre, the third-highest yield on record.

U.S. soybean production is forecast at 3.26 billion bushels in 2013, up 8 percent from last year. NASS forecasts 76.4 million acres of soybeans for harvest this year. If realized, this will be the second-largest harvested acreage on record. Improved weather in June allowed soybean growers to speed up their planting, and by June 30, growers had 96 percent of the crop in the ground. Based on Aug. 1 conditions, soybean yields are expected to average 42.6 bushels per acre, up three bushels from 2012.

"Despite planting delays and somewhat cool, wet conditions across much of the Corn Belt, farmers have worked diligently to grow the best crop possible," said National Corn Growers Association First Vice President Martin Barbre, a farmer from Carmi, III. "We are pleased to see that this work is coming to fruition in many of the fields surveyed by the USDA in order to produce this forecast.

Farmers merge cutting-edge technology and ever-improving practices to create a dynamic industry capable of operating at a level unthinkable only a few decades prior. As harvest slowly approaches, we hope that conditions hold strong and look forward to getting the crop out of the field and into the bins."

Corn beginning stocks projections were lowered by 10 million bushels based on a 15-million bushel increase in the previous crop year's exports. A 5 million-bushel increase in imports partially offset the decline in beginning stocks.

U.S. corn ending stocks for 2013–2014 are projected at 1.8 billion bushels, 122 million bushels lower than a month prior. The season-average farm price, now projected 10 cents higher at each end to $4.50 to $5.30 per bushel, remains down sharply from the record $6.70 to $7.10 the prior year.

USDA's August Crop Production report contained smaller than expected forecasts of the size of the 2013 U.S. corn and soybean crops, noted Darrel Good, professor emeritus in the Department of Agricultural Economics at the University of Illinois, in a news release. At 13.8 billion bushels, the corn crop forecast is 242 million bushels smaller than the average trade guess. At 3.3 billion bushels, the soybean crop forecast is 81 million bushels smaller than the average trade guess.

The forecast of corn area to be harvested for grain was unchanged from the June forecast of 89.1 million acres, but the average yield forecast of 154.4 bushels was 3.3 bushels lower than expected, Good pointed out.

The projection of corn used for ethanol production was unchanged at 4.9 billion bushels, implying little growth in consumption of ethanol blends above 10 percent during the year ahead, according to Good. The estimate of area planted to soybeans was reduced by 550,000 acres from the June forecast. The U.S. average soybean yield is forecast at 42.6 bushels, about one bushel below the average trade guess, according to the University of Illinois news release.

The marketing year average farm price is projected in a range of $10.35 to $12.35, 60 cents above last month's projection. For soybean oil, the forecast of consumption for biodiesel was increased by 200 million pounds, to a total of 5.7 billion pounds. That compares to expected consumption this year of only 4.6 billion pounds, Good reported. The increase reflects the likely need to increase biodiesel production to meet the Renewable Fuels Standards for 2014, although the preliminary rules for 2014 have not yet been announced by the Environmental Protection Agency. The forecast of domestic soybean oil consumption for other purposes was reduced by 200 million pounds.

Todd Davis, American Farm Bureau Federation economist, noted that the USDA report predicted 2013–2014 corn ending stocks to drastically increase from 719 million bushels for 2012–2013 to 1.8 million bushels, elevating the stocks-to-use ratio from 6.4 percent to 14.5 percent. “This means that the U.S. corn market is likely to go from a 23-day supply to a 52-day supply of corn,” Davis said. “This increase in stocks will cause prices to decline from a marketing-average price of $6.95 per bushel for 2012–2013 to a projected $4.90 per bushel in 2013-2014,” said Davis.

The 2013–2014 soybean ending stocks are also expected to increase, though not as sharply as corn, from 125 million bushels in 2012–2013 to 220 million bushels in 2013–2014. In turn, the stocks-to-use ratio also will see an increase from a threadbare 4 percent for 2012–2013 to 6.9 percent for 2013–2014. The projected marketing-year average prices are expected to decline from $14.40 per bushel for 2012–2013 to $11.35 per bushel for 2013–2014.

“Due to the late planting season for both corn and soybeans, especially in the western Corn Belt, farmers should expect future reports to provide more accurate estimates that may differ significantly from Monday’s estimate,” said Davis. “While the 2013 corn and soybean crops do not look excellent everywhere, the corn and soybean markets are anticipating much larger crops, which will lead to lower prices and tighter profitability margins for 2014.”


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