WASHINGTON — U.S. corn growers remain on track for a record high 14.0 billion bushel production year, according to the Crop Production report, released today (Nov. 8) by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).
In addition to corn numbers, the report also included updated forecasts for U.S. citrus production, and major field crops, such as soybeans and cotton.
160 bushel average
NASS revised the acreage planted to corn this season to 95.3 million acres, down 2 percent from the previous estimate.
Despite the decrease, however, production forecast remained high due to high forecasted yields.
This season’s yields are expected to average 160.4 bushels per acre, with corn growers in 18 states forecast to reach record yields this year.
The weather also remains good for harvest so far this year, allowing growers to harvest 73 percent of the corn crop by Nov. 3, which is 2 percentage points ahead of the five-year average harvest rate.
In Ohio, the USDA estimates 3.63 million acres will be harvested, down from 3.65 million in 2012. Yield is expected to average 174 bushels per acre, up from 123 bushels last year.
Total corn production will be an estimated 631.6 million bushels in Ohio, up from 448.9 million in 2012.
Soybeans
NASS also reduced the planted area for soybeans to 76.5 million acres, down 1 percent from the previous forecast.
Just as with corn, however, favorable weather conditions account for higher pod counts compared with the 2012 yield.
Soybean yields are expected to average 43.0 bushels per acre, with the final production forecast at 3.26 billion bushels. If realized, this will be the third largest production year on record.
Ohio soybean acres harvested will be an estimated 4.43 million acres, down from last year’s 4.59 million. Average yield is an estimated 49 bpa.
Total soybean production in Ohio is forecast at 217 million bushels, up from 206.5 million in 2012.
Cotton
U.S. cotton growers are forecast to produce 13.1 million 480-pound bales this year. This forecast is an increase of 2 percent from the September report, but is down 24 percent from last year’s production.
Cotton yield is expected to average 808 pounds per harvested acre, up 79 pound from 2012.
Citrus
On the citrus front, U.S. all orange production for the 2013-2014 seasons is forecast at 7.96 million tons, down 5 percent from the previous season’s final utilization.
Grapefruit growers are forecast to produce 1.13 million tons this year, down 5 percent from last season.
In contrast, tangerine and mandarin crop is forecast to increase 6 percent from last season’s production to 726,000 tons in 2013-2014 growing season.
Supply and demand
The USDA also released updated forecasts of the supply and consumption of those crops for the 2013-14 marketing year, suggesting prospects for larger year ending stocks and lower prices.
The forecast of corn production in the rest of the world was increased by 97 million bushels, with lower projections for Brazil and Mexico and a larger estimate for Russia.
The forecast of current marketing year feed and residual use of corn was increased by 100 million bushels to a six year high of 5.2 billion bushels. The projection is 867 million bushels (20 percent) larger than use of a year ago.
The large increase reflects the lower price of corn, some increase in poultry and perhaps hog production, and an expected large increase in residual use associated with a large crop.
Outlook positive
The projection is optimistic, according to Darrel Good, ag economist at the University of Illinois.
The first indication of the pace of consumption will come with the estimate of Dec. 1 stocks to be released in the second week of January.
The projection of marketing year exports was increased by 175 million bushels, to a total of 1.4 billion bushels.
That projection is nearly double exports of the past year which were at a 42-year low.
Good said the larger projection this month reflects the competitiveness of U.S. corn prices in the world market and the pace of exports and export sales to date.
Stocks of corn at the end of the marketing year are projected at an eight-year high of 1.887 billion bushels, 32 million larger than projected in September and 1.063 billion larger than stocks at the beginning of the year.
The marketing year farm price is projected in a range of $4.10 to $4.90, the lowest in four years and 30 cents lower than projected in September.
World soybean market
The forecast of soybean production in the rest of the world was reduced by 40 million bushels, although the forecast for South American production was unchanged.
The projection of 2013-14 marketing year exports were increased by 80 million bushels, to a total of 1.45 billion bushels, reflecting the large export sales already made and the rapid pace of export shipments.
In addition, the projection of the marketing year crush was increased by 30 million bushels, reflecting expectations of larger exports.
In contrast to the large projection for feed and residual use of corn, the projection of domestic meal consumption was unchanged from September and is only 850,000 tons (three percent) larger than consumption of last year.
Year-ending stocks of soybeans are projected at 170 million bushels, only 20 million bushels larger than the September projection and only 29 million larger than stocks at the beginning of the year.
The marketing year average price is projected in a range of $11.15 to $13.15, 35 cents lower than the September projection.
Implications
Good said the new forecasts for corn are generally within the range of expectations, although the market may have been expecting slightly larger production and year-ending stocks estimates.
That suggests that this report may serve to stop the decline in corn prices.
However, he added, prospects of surplus supplies will likely limit the extent of any price recovery.
Unforeseen problems with the South American crop and/or a more rapid consumption pace will likely be needed for any substantial price rally to occur.
Longer term, the market seems to think reduced acreage and a smaller U.S. crop in 2014 will provide for some modestly higher prices next year, but Good doesn’t necessarily agree.
“Expectations of a smaller crop in 2014 seem premature and prices for the 2014 crop may be too high if a decline in production does not occur,” he said in a statement after the report came out Nov. 8.
The new forecasts for soybeans point to continued tight domestic supplies.
“With continued strong Chinese demand for soybeans, it is still questionable if South American production will be large enough in 2014 to supply total world needs.
“If not, an increase in production may be needed in the U.S. in 2014, pointing to higher prices than now being offered for the 2014 crop in order to attract more acreage.”
