Agricultural News
USDA Reports Predict Record Corn and Soybean Crops, Smaller Wheat Crop for 2013
Fri, 10 May 2013 18:52:33 CDT
Grain markets reacted negatively Friday to a mix of numbers released in a pair of reports from the USDA. The World Agriculture Supply and Demand report and the Crop Production report forecast record production in corn and soybeans and a drop in overall wheat production.
The WASDE report projects a corn yield of 158 bushels per acre, implying a record crop of 14.14 billion bushels, up 3.36 billion bushels from 2012 when much of the nation was overtaken by severe drought. The current record corn crop was produced in 2009 at 13.09 billion bushels. The report also predicts higher ending stocks and reduced demand.
The USDA is forecasting a record year for the soybean crop, projecting 3.39 billion bushels, up 375 million bushels from 2012. Soybean stocks are expected to increase to 265 million bushels, up 140 million from 2012-13 marketing year, with the stocks-to-use ratio at 8.1 percent. The farm price for the crop is also down from the year before, from $14.30 per bushel in 2012-13 to $10.50 per bushel.
Analysts say that if the forecast corn yields are realized, corn stocks could increase to slightly more than 2 billion bushels, reducing forecast farm-level price to less than $5 per bushel. This is down from $6.90 per bushel for the 2012-13 marketing year.
"A harvest price of $4 per bushel for corn is very likely if the crop gets in with good weather," Brad Paulson, president of Northern Crops Marketing and Investments in Langdon, N.D., told Agweb.com. "There is a fair amount of corn out there. Corn is just in tight hands." He said he expects producers to clear out their bins in July and August.
Wheat numbers in the Crop Production report were decidedly negative, with the USDA forecasting winter wheat production at 1.49 billion bushels, down 10 percent from 2012. The report forecasts a 114-million-bushel crop for Oklahoma. That's down from a 155-million-bushel crop the year before.
Even with a lowered estimate for Oklahoma, Oklahoma State University Small Grains Extension Specialist Dr. Jeff Edwards says the USDA analysts are seeing the state's wheat crop potential through rose-colored glasses.
"I think they're a group of optimists. I think that's really high. I believe the Oklahoma Grain and Feed number was probably closer at about 85 million bushels. I think that's much more realistic. If we have these cooler temperatures that allow us to have an extended grain fill, I think we'll make that 85 million, maybe push the 90-million-bushel range. If we get hot and dry in the next few weeks and have those hot winds, I don't think we'll make that 85. We're probably looking at about half of what we had last year if we turn hot and dry."
Commodities trader Tom Leffler also took the reports with a grain of salt. "Don't get overly concerned about these numbers, we have a whole growing season ahead of us. And just like we learned last year: things can change very quickly and very dramatically.
The NASS report is predicting the Kansas wheat crop will be down by roughly a fourth this year at nearly 299,700,000 bushels. That's a drop from last year's number of 382,200,000 bushels.
Texas production will be nearly cut in half from last year's figure if the USDA's predictions hold true. The state is expected to produce 54 million bushels compared with 96 million last year.
You can read the WASDE Report by clicking here.
Click here for the Crop Production Report.
You can hear more of Leffler's analysis by clicking on the LISTEN BAR below.
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