Corn production forecast strongly increases while soybean drops, USDA report says
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WASHINGTON, Sept. 12, 2013 - The latest USDA World Agricultural Supply and Demand Estimates report projected a record production forecast for corn and a significant decrease in soybean production.
The report said corn production is forecast at 80 million bushels higher at a record 13.8 billion bushels. The national average corn yield is forecast at 155.3 bushels per acre, up 0.9 bushels from last month. Higher yields for the Central Plains and across the South more than offset yield reductions for Iowa and North Dakota. Corn supplies for 2013/14 are projected 18 million bushels higher due to increased production; however, projected imports are reduced 5 million bushels and beginning stocks are down 58 million bushels on lower imports and higher use projections for 2012/13. The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $4.40 to $5.20 per bushel. Corn used in the production of ethanol is raised 15 million bushels based on stronger-than-expected August ethanol production.
Soybean production is projected at 3.149 billion bushels, down 106 million due to lower yield prospects, especially in the western Corn Belt. The soybean yield is forecast at 41.2 bushels per acre, down 1.4 from last month. Soybean exports are reduced 15 million bushels to 1.37 billion reflecting reduced supplies and increased competition from South America.
The U.S. season-average soybean price is projected at $11.50 to $13.50 per bushel, up $1.15 on both ends of the range. Soybean meal prices are projected at $360 to $400 per short ton, up $55.00 at the midpoint. Soybean oil prices are projected at 43 to 47 cents per pound, down 1 cent at the midpoint as large global vegetable oil supplies pressure prices. Soybean production for Brazil is forecast at a record 88 million tons, up 3 million on increased area.
Summarized information on prices, production, and exports from the report is below:
Wheat: Projected U.S. wheat supplies for 2013/14 are raised 10 million bushels with higher expected imports from a larger wheat crop in Canada. U.S. trade and food use changes by class largely reflect higher projected exports by Canada. Hard Red Spring (HRS) wheat imports are
raised 10 million bushels and Durum imports are raised 5 million bushels. Partly offsetting is a 5-million-bushel reduction in projected Soft Red Winter wheat imports. The projected range for the 2013/14 season-average farm price is narrowed 10 cents on each end of the range to $6.50 to $7.50 per bushel, well below the 2012/13 record of $7.77 per bushel. World wheat production is projected at a record 708.9 million tons, up 3.5 million this month.
Rice: U.S. 2013/14 rice supplies are increased 5.6 million cwt or 2 percent because of increases in beginning stocks and production. Imports are unchanged from a month ago. U.S. rice production in 2013/14 is forecast at 185.1 million cwt, up 3.7 million from last month due both to an increase in area harvested and yield. Harvested area is estimated at 2.46 million acres, up 15,000 acres from last month. Harvested area estimates are raised for all states except Mississippi and Missouri which are lowered. The average yield is estimated at a record 7,511 pounds per acre, up 105 pounds per acre from last month, with increases in all states except California and Texas. Long-grain rice production is forecast at 126.5 million cwt, up 1.8 million from last month.
Sugar: Projected U.S. sugar supply for fiscal year 2013/14 is increased 328,000 short tons, raw value, from last month, as higher production and imports more than offset lower beginning stocks. Projected sugar production is up 250,000 tons, based on higher forecast sugar crop yields. Total use is increased in line with the increase in 2012/13 use. Ending stocks for 2013/14 are increased to 19.5 percent of use, compared with 16.9 percent last month.
Livestock, Poultry, and Dairy: The 2013 forecast for total red meat and poultry production is raised from last month. Beef production is raised in 2013 on greater cow and bull slaughter. The pork production forecast for 2013 is raised as lower hog slaughter in the second half is more than offset by heavier average carcass weights. Both broiler and turkey production are raised for 2013 based on the strength of production and hatchery data to date. Egg production is unchanged. For 2014, the total red meat and poultry forecast is reduced. Pork production is unchanged for 2014.
Cotton: This month's 2013/14 U.S. cotton supply and demand estimates include marginally lower production and lower exports compared to last month, resulting in a slight increase in ending stocks. Beginning stocks are raised 100,000 bales to 3.9 million based on revised stocks data for July 31, 2013. Domestic mill use is unchanged, but exports are lowered 200,000 bales due to increased competition for market share, mainly from India. The forecast range for the marketing year average price received by producers is lowered 3 cents on each end to 69 to 85 cents per pound, reflecting recent market activity and prospects.
Todd Davis, economist for the American Farm Bureau said this is a later maturing crop than 2012 so the yield projections become more accurate as the crop becomes ready for harvest.
“The U.S. corn market will shift from a 21-day end-of-year supply to a 53-day end-of-year supply,” Davis said. “This increase in stocks will cause prices to decline from a marketing-average price of $6.90 per bushel for 2012-13 to a projected $4.80 per bushel in 2013-14.”
Soybean prices will be less connected to corn, in the coming year, according to Davis.
“Market dynamics are changing compared to what farmers have seen over the last three years or so,” Davis said. “Soybean prices have been following the corn market the last three years but are now poised to separate from corn.”
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