USDA lowers projected corn yield by 20 bushels

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According to the USDA's World Agricultural Supply and Demand Estimates report, 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.

Global coarse grain supplies for 2012/13 are lowered 47.6 million tons mostly reflecting the 46.2- million-ton projected reduction in the U.S. corn crop.

Partly offsetting is a 1.3-million-ton increase in EU-27 corn production, mostly reflecting higher reported area, and a 0.4-million-ton increase in Canada corn, also on higher reported area. Other important 2012/13 coarse grain production changes include a 1.5-million-ton reduction for Ukraine barley, a 1.0-million-ton reduction for Russia barley, a 0.5-million-ton reduction for Canada barley, and a 0.3-million-ton reduction for Canada oats. Brazil 2011/12 corn production is raised again this month, up 1.0 million tons, based on the latest reports from national and state statistical agencies.

Global 2012/13 coarse grain trade is projected lower this month mostly reflecting lower corn exports from the United States. Corn imports are lowered 2.0 million tons each for China and EU-27, 0.5 million tons each for Japan and South Korea, and 0.3 million tons for Mexico. Global barley trade is also lowered with Ukraine exports down 0.5 million tons and Russia and Canada exports each down 0.2 million tons.

Barley exports for Australia and Argentina are raised 0.3 million tons and 0.2 million tons, respectively. Global corn consumption drops 22.9 million tons with most of the decline in the United States. Corn consumption is also lowered 0.8 million tons for India and 0.5 million tons each for Japan and South Korea. Global corn ending stocks are projected 21.7 million tons lower with the United States accounting for 17.7



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