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USDA predicts big corn crop and sharply lower prices
Story Date: 5/13/2013
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Source: Rita Jane Gabbett, MEATINGPLACE, 5/10/13
USDA expects a big bounce back in the U.S. corn crop that is largely still unplanted, predicting a 14.14 billion bushel crop compared to last year’s drought-reduced 10.78 billion bushels and pushing expected average corn prices below $5 a bushel.
In its first forecasts of this year’s crops in its World Supply and Demand Estimates report, USDA projected corn ending stocks (on Sept. 1, 2014) would rise to 2 billion bushels, a big jump from just 759 million bushels it expects to be available on Sept. 1, 2013.
USDA noted it factored in “the slow pace of planting progress as of early May” in the report, which forecast corn yields at 158 bushels per acre, compared to just 123 bushels per acre last year, due to severe drought.
The report forecast average corn prices in the 2013/14 marketing year that begins in September in a range of $4.30 to $5.10 per bushel, down from an average price range of $6.70 to $7.10 estimated for the current marketing year.
U.S. corn use for 2013/14 is projected up 16 percent from 2012/13 on higher feed and residual disappearance, increased use for ethanol, sweeteners, and starch, and a partial recovery in exports.
Feed and residual use for 2013/14 is projected up 925 million bushels, reflecting a sharp rebound in residual disappearance with the record crop and an increase in feeding poultry and livestock as corn prices decline.
USDA increased projected corn use for ethanol by 250 million bushels in 2013/14 to 4.85 billion bushels compared to this month’s projected 4.6 billion bushels for 2012/13. Lower corn prices and high prices for Renewable Identification Numbers (RINS) support profitability for ethanol producers.
Corn futures prices fell by about 15 cents per bushel in nearby delivery months on the Chicago Board of Trade after the report was issued at 12:00 EDT.
Soybeans
Soybean production is projected at a record 3.39 billion bushels, up 375 million from the drought-reduced 2012 crop on slightly higher harvested area and higher yields.
The season-average soybean price for 2013/14 is forecast at $9.50 to $11.50 per bushel compared with $14.30 per bushel in 2012/13.
Soybean meal prices are forecast at $280-$320 per short ton next year, compared to an estimated $425 this year.
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