Corn, soybean prices projected to increase, USDA says

By Agri-Pulse staff

© Copyright Agri-Pulse Communications, Inc.



WASHINGTON, Aug. 12, 2013 - The projected season-average farm prices for wheat and rice are reduced, but soybean and corn prices are increased, in this month's World Agricultural Supply and Demand Estimates report released by USDA today.

In its first survey-based crop report, USDA projected that farmers will harvest a record corn crop of 13.76 billion bushels in 2013, up 28 percent from last year and five percent larger than the previous record crop.

USDA's corn production projection, although a record high, was lower than analysts' expectation of 13.89 billion bushels, causing the short-term increase in price.

USDA said it expects farmers will achieve a national average yield of 154.4 bushels per acre for the third-highest yield on record, despite farmers experiencing one of the slowest, wettest planting seasons on record.

“America's farmers have again risen to the challenge of producing abundant feed, food, and fuel for consumers around the world,” said Bob Dinneen, president and chief executive officer of the Renewable Fuels Association. “After the disappointment of last year's drought-stricken crop, farmers have responded by producing what is likely to be the largest crop of all time.”

Summarized information on prices, production, and exports from the report is below:

Globally Positioned Agriculture

Wheat: U.S. wheat supplies for 2013/14 are projected slightly higher this month as small increases for Soft Red Winter wheat and Durum are mostly offset by decreases for White, Hard Red Spring and Hard Red Winter wheat. U.S. wheat exports for 2013/14 are raised 25 million bushels reflecting continued strong early season sales and an increased outlook for China imports. Despite larger expected crops in several major exporting countries, strong early season demand and higher projected world imports and consumption also boost prospects for U.S. shipments. Ending stocks are projected 25 million bushels lower. The projected range for the 2013/14 season-average farm price is lowered 10 cents per bushel at the midpoint to $6.40 to $7.60 per bushel. Despite the tighter domestic balance sheet, larger world wheat supplies and lower-than-expected prices reported to date reduce prospects for the weighted average farm price. Global wheat supplies for 2013/14 are raised 7.5 million tons with increases in production for several of the world's largest exporters pushing world production to a record 705.4 million tons. Global wheat consumption for 2013/14 is raised 6.9 million tons with increases in wheat feeding projected for a number of countries and higher food use expected for India and Iran.

Coarse Grains: Projected 2013/14 U.S. feed grain supplies are reduced this month with lower forecast production for corn and sorghum. Corn production for 2013/14 is lowered 187 million bushels to 13.8 billion. The first survey-based corn yield forecast, at 154.4 bushels per acre, is down 2.1 bushels from last month's projection. Sorghum production is forecast 36 million bushels lower with the forecast yield 5.9 bushels per acre below last month's projection. Corn beginning stocks for 2013/14 are projected 10 million bushels lower with a 15-million-bushel increase in 2012/13 exports only partly offset by a 5-million-bushel increase in imports. Feed and residual use for 2013/14 is lowered 50 million bushels this month with the smaller crop. Exports are projected 25 million bushels lower with reduced domestic supplies and increased foreign competition. Ending stocks for 2013/14 are projected 122 million bushels lower. The projected season-average farm price for corn is raised 10 cents at both ends of the range to $4.50 to $5.30 per bushel. Prices received by farmers are expected to remain above cash bid levels through the fall as producers who forward-priced corn earlier in the year support the weighted average farm-gate price. Global 2013/14 corn production is lowered 2.7 million tons. Global corn consumption for 2013/14 is projected 2.3 million tons lower.

Rice: U.S. total rice supplies for 2013/14 are projected at 238.4 million cwt, up 2.9 million from last month. Projected beginning stocks and production are each raised from a month ago, while imports are lowered. USDA's first survey-based forecast of the 2013/14 U.S. rice crop is 181.4 million cwt, up 1.9 million from last month's projection, but down 9 percent from the previous year. Average all rice yield is forecast at 7,406 pounds per acre, up 76 pounds per acre from last month's projection, but down only slightly from last year's record. Area harvested is unchanged at 2.45 million acres. Long-grain production is forecast at 124.8 million cwt and combined medium- and short-grain production at 56.6 million, up 0.8 million and 1.1 million from a month ago, respectively. The all rice import projection is lowered 1.0 million cwt to 22.5 million due in part to an expected larger crop. All rice beginning stocks for 2013/14 are raised 2.0 million cwt to 34.6 million because of a decrease in the 2012/13 export estimate to 107.0 million. U.S. total rice use for 2013/14 is projected at 208.0 million cwt, up 1.0 million cwt from last month. The all rice export projection is raised 1.0 million cwt to 96.0 million cwt-all in medium/short grain. The all rice price is projected at $14.50 to $15.50 per cwt, down 40 cents per cwt on each end of the range. Global production is lowered 0.8 million tons to 477.9 million, still a record, due primarily to a forecast reduction for China, which is partially offset by increases for Pakistan and the United States. China's 2013/14 rice crop is lowered 1.0 million tons to 143.0 million nearly the same as 2012/13. Global trade is raised 0.7 million tons with increases in exports for India, Pakistan, the United States, and Vietnam.

Oilseeds: U.S. oilseed production for 2013/14 is projected at 96.2 million tons, down 4.7 million from last month mainly due to a lower soybean production forecast. Soybean production for 2013/14 is forecast at 3.255 billion bushels, down 165 million due to lower harvested area and yields. Harvested area is forecast at 76.4 million acres, down 0.5 million from the July projection. The first survey-based soybean yield forecast of 42.6 bushels per acre is 1.9 bushels below last month's projection but 3 bushels above last year's drought-reduced yield. Soybean supplies for 2013/14 are projected 5 percent below last month based on the lower production forecast. With reduced supplies and higher prices, U.S. soybean exports are reduced 65 million bushels to 1.385 billion. Lower U.S. exports will be mostly offset by increases for South America, especially Argentina. Soybean crush is also lowered as higher prices reduce prospective exports for soybean meal. Soybean ending stocks are projected at 220 million bushels, down 75 million from last month. U.S. soybean balance sheet changes for 2012/13 include increased imports, reduced exports, and

increased crush. Imports are raised 10 million bushels to 35 million based on strong shipments from South America. Exports are reduced 15 million to 1.315 billion bushels reflecting exceptionally low shipments in recent weeks and revised export data for September through December 2012 from the Department of Commerce. The U.S. season-average soybean price for 2013/14 is forecast at $10.35 to $12.35 per bushel, up 60 cents on both ends. Global oilseed production for 2013/14 is projected at 493.1 million tons, up 0.2 million tons from last month. Lower soybean production projected for the United States is partly offset by an increase for India where higher harvested area more than offsets reduced yields caused by excessive July rainfall.

Sugar: Projected U.S. sugar supply for fiscal year 2013/14 is increased slightly from last month, as higher beginning stocks and imports are nearly offset by lower production. The decline in production is due to lower forecast sugarbeet and sugarcane yields, compared with last month's trend-based projections. For Mexico, higher supplies are due to increased production more than offsetting lower carryin stocks. Harvest area of sugarcane is higher than initially projected, but slightly lower than Mexico's final estimate for 2012/13. With 2013/14 supplies up in Mexico, exports to the United States are increased. Ending stocks are raised slightly for both Mexico and the United States.

Livestock, Poultry, and Dairy: The total red meat and poultry production forecast for 2013 is raised from last month as higher beef production more than offsets lower pork, broiler, and turkey production. Beef production is raised as greater fed cattle and cow slaughter combine with heavier average carcass weights to push output higher. Moderate feed prices and recent placement of heavy animals are expected to support higher average carcass weights in the second half of the year. Pork production is reduced largely reflecting lower slaughter in the third quarter. Broiler production is reduced as the increase in second-quarter production was smaller than expected. The forecast for second-half production is unchanged. Turkey production is lowered as hatchery data portends sharper production declines in the third and fourth quarters. Egg production is raised from last month as greater table egg production more than offsets a marginal decline in second quarter hatching egg production. For 2014, beef production is raised slightly on larger expected marketings of cattle placed in 2013. Forecasts for other meats are unchanged. Beef exports are raised for 2013 on stronger shipments to several markets, while the forecast for 2014 is unchanged from last month. Beef imports for 2013 are reduced based on second-quarter data, but are unchanged for 2014. The 2013 pork export forecast is down fractionally reflecting second-quarter data, with 2014 unchanged.

Cotton: This month's U.S. cotton estimates for 2013/14 reflect lower production as indicated by USDA's first crop survey, resulting in lower ending stocks. Production is reduced 447,000 bales to 13.1 million, the smallest since 2009. The abandonment rate is estimated virtually the same as last season, but yields are down, due mainly to a 17-percent reduction in the Southeast from the 2012 record. Relative to last month, the 2013/14 balance sheet also includes marginally lower beginning stocks and a decrease of 400,000 bales in the export projection. Domestic mill use is unchanged. Ending stocks are now forecast at 2.8 million bales, the equivalent of 20 percent of total disappearance. The forecast range of 72 to 88 cents for the marketing-year average price received by producers is narrowed 2 cents on each end. The U.S. 2012/13 balance sheet is revised this month to reflect exports as reported in USDA's U.S. Export Sales end-of-season report, and also includes a first estimate of final ending stocks. The 2013/14 world cotton forecasts show higher beginning stocks, lower production, and marginally lower ending stocks relative to last month. Production is reduced for China, the United States, Uzbekistan, and Zimbabwe, but is raised for Pakistan.

View the complete report here.

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