USDA lowered the projected U.S. corn yield to 146 bushels/acres in its July 11 World Agricultural Supply and Demand Estimates (WASDE) report, down 20 bushels from last month, reflecting the rapid decline in crop conditions since early June and the latest weather data.
The season average 2012/13 farm price for corn is projected at $5.40-$6.40 per bushel, up sharply from $4.20-$5.00 per bushel in June.
“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 region,” the report said. Harvested area is also reduced slightly based on USDA’s June 29 Acreage report (GM July 2, p. 11).
USDA said 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. U.S. feed grain supplies for 2012/13 are projected sharply lower, with corn production prospects reduced 1.8 billion bushels from last month. 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.
USDA said corn exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments.
Ending corn stocks for 2012/13 are projected at 1.2 billion bushels, down 698 million from last month’s projection.
The U.S. soybean crop was also feeling the pinch from drought, USDA said. Soybean production is projected at 3.050 billion bushels, down 155 million, as increased harvested area is more than offset by reduced yields. The soybean yield is projected at 40.5 bushels/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,” USDA said.
The U.S. season average soybean price is projected at $13.00-$15.00 per bushel, up $1.00 on both ends of the range.
Soybean supplies are 160 million bushels below last month’s forecast due to lower beginning stocks and reduced production. Soybean exports for 2012/13 are reduced 115 million bushels to 1.37 billion, reflecting lower U.S. supplies, although 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.
USDA’s projected U.S. wheat supplies for 2012/13 were raised 5 million bushels, with higher estimated beginning stocks more than offsetting lower forecast production. Wheat production for 2012/13 was reduced 10 million bushels, with lower production of hard red winter wheat projected in Texas, Colorado, Oklahoma, and Montana. USDA said a 14-million-bushel reduction in winter wheat production is only partly offset by a higher spring wheat forecast.
The projected range for the 2012/13 season average farm price for all wheat was raised 60 cents on both ends to $6.20-$7.40 per bushel, supported by the sharply higher corn and soybean prices. This compares with the record $7.24 per bushel reported for 2011/12, USDA said.
Total U.S. wheat use for 2012/13 is projected 35 million bushels higher, while ending stocks are projected 30 million bushels lower.
U.S. rice production for 2012/13 was raised 4 percent to 191.0 million cwt, USDA said, due mostly to an increase in harvested area as indicated by USDA’s June 29 Acreage report. Harvested rice area for 2012/13 was raised 107,000 acres to 2.64 million, but USDA said this acreage figure is still the lowest since 1987/88.
The 2012/13 season