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Agricultural News


USDA Sees Big Drop in Corn and Soybean Crop Potential in 2012 Growing Season

Wed, 11 Jul 2012 14:04:58 CDT

USDA Sees Big Drop in Corn and Soybean Crop Potential in 2012 Growing Season The USDA World Agricultural Outlook Board has starred straight at the face of the midwestern drought- and concluded the corn crop in the United States is in serious trouble. Corn yields have been revised downward as USDA lowered the projected corn yield 12% to a national average of 146 bushels per acre. Soybean yields also were reduced by the Outlook board in their July report by 3.4 bushels an acre from last month's estimates- using an assumption of 40.5 bushels per acre nationally.


Following are the summary comments offered in the report. Click here for the full report as released on July 11, 2012.


Corn- Coarse grains-


U.S. feed grain supplies for 2012/13 are projected sharply lower with corn production prospects reduced 1.8 billion bushels from last month. The projected U.S. corn yield is lowered 20 bushels per acre to 146 bushels reflecting the rapid decline in crop conditions since early June and the latest weather data. Persistent and extreme June dryness across the central and eastern Corn Belt and extreme late June and early July heat from the central Plains to the Ohio River Valley have substantially lowered yield prospects across most of the major growing regions. Harvested area is also reduced slightly based on the June 29 Acreage report.


Reduced supplies and higher prices are expected to sharply lower 2012/13 corn usage with the biggest reduction for feed and residual disappearance, projected down 650 million bushels. Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol. Exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments. A 52-million-bushel increase in beginning stocks and a 15- million-bushel increase in imports offset only a small portion of the expected reduction in this year's crop. Ending stocks for 2012/13 are projected at 1.2 billion bushels, down 698 million from last month's projection.


The season average 2012/13 farm price for corn is projected at $5.40 to $6.40 per bushel, up sharply from $4.20 to $5.00 per bushel in June. Trade changes to the 2011/12 corn balance sheet boost projected 2011/12 ending stocks. Imports are raised 2 million bushels based on the latest trade data. Exports are projected 50 million bushels lower reflecting the slowing pace of old-crop sales and shipments. The season average 2011/12 farm price for corn is projected at $6.10 to $6.30 per bushel, up from $5.95 to $6.25 per bushel last month, as cash and futures prices have soared since early June on intensifying drought and heat across the Midwest.


Soybeans- Oilseeds

U.S. oilseed production for 2012/13 is projected at 92.7 million tons, down 4.2 million from last month, with lower soybean production accounting for most of the change. Soybean production is projected at 3.050 billion bushels, down 155 million as increased harvested area is more than offset by reduced yields. Harvested area, estimated at 75.3 million acres in the June 29 Acreage report, is 2.3 million above the June projection. The soybean yield is projected at 40.5 bushels per acre, down 3.4 bushels from last month. The drop reflects sharply declining crop conditions resulting from limited rainfall since early April coupled with excessive heat across much of the producing area in late June and early July. Soybean supplies are 160 million bushels below last month's forecast due to lower beginning stocks and reduced production. Soybean crush is projected at 1.61 billion bushels, down 35 million reflecting the impact of higher soybean meal prices on meal exports and domestic disappearance. Soybean exports for 2012/13 are reduced 115 million bushels to 1.37 billion reflecting lower U.S. supplies. Increased exports from South America and Canada partly offset reduced U.S. exports. Soybean ending stocks are projected at 130 million bushels, down 10 million.


U.S. soybean crush for 2011/12 is raised 15 million bushels to 1.675 billion reflecting strongerthan- expected domestic soybean meal use. Soybean exports for 2011/12 are projected at 1.34 billion bushels, up 5 million, reflecting strong late-season sales and increased imports for China. Seed use is raised and residual is reduced based on indications from the June 29 Acreage and Grain Stocks reports, respectively. Soybean ending stocks for 2011/12 are projected at 170 million bushels, down 5 million.


Prices for soybeans and soybean meal for 2012/13 are raised this month. The U.S. season average soybean price is projected at $13.00 to $15.00 per bushel, up $1.00 on both ends of the range. Soybean meal prices are projected at $365 to $395 per short ton, up $30 on both ends of the range. The soybean oil price projection is unchanged at 52.5 to 56.5 cents per pound.


Wheat


Projected U.S. wheat supplies for 2012/13 are raised 5 million bushels with higher estimated beginning stocks more than offsetting lower forecast production. Beginning stocks were reported in the June 29 Grain Stocks report 15 million bushels above last month's projection. Feed and residual disappearance, seed use, and exports are all lowered slightly for 2011/12. Production for 2012/13 is reduced 10 million bushels as a 14-million-bushel reduction in winter wheat is only partly offset by higher forecast spring wheat. Among the Hard Red Winter wheat states, lower production for Texas, Colorado, Oklahoma, and Montana is only partly offset by increases for Kansas and Nebraska. For the Soft Red Winter (SRW) wheat states, increases for Ohio, Illinois, and Indiana are mostly offset by reductions in the southern SRW-producing states.


Total U.S. wheat use for 2012/13 is projected 35 million bushels higher. Domestic U.S. food use for 2012/13 is raised 5 million bushels on expectations of lower flour extraction rates for this year's crop. Projected feed and residual use is lowered 20 million bushels, with higher prices and stronger export demand. Exports are projected 50 million bushels higher with reduced competition from Black Sea exporters. Ending stocks for 2012/13 are projected 30 million bushels lower. The projected range for the 2012/13 season average farm price is raised 60 cents on both ends to $6.20 to $7.40 per bushel, supported by sharply higher corn and soybean prices. This compares with the record $7.24 per bushel reported for 2011/12.



   

 

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