In the June WASDE report, the USDA projected a U.S. average yield of 43.9 bushels and 2012-13 marketing year-ending stocks at what is generally considered to be a minimum level of 140 million bushels. Good said that the trend yield for 2012 is 43.4 bushels, 1.9 bushels above the 2011 average yield.
“Continuation of stressful weather in the central and eastern growing areas along with declining crop condition ratings suggest that the 2012 yield could be below trend again in 2012,” Good said. “A shortfall in production would require that consumption during the year ahead be reduced from the current USDA projection of 3.255 billion bushels. The recent price rally is in recognition of the rationing that may be required.
“Unless weather and crop conditions improve soon, which does not appear likely, additional price strength is expected,” Good said. “Talk of the 2008 futures price peak near $16.60 has surfaced. While prices at that level are not yet justified, they are within the range that we have projected for the ‘new era’ of prices that began in 2007.”