The highly anticipated August World Agricultural Supply and Demand Estimates report was released Monday by the Agriculture Department. This first report of the year to incorporate farmer survey and field plot measurements to projected yield and production potential indicates a record crop.
“Up to this point, USDA has been using a statistical model for corn that predicts yield based on planting date, rainfall and temperature during the growing season,” said Todd Davis, American Farm Bureau Federation economist. “The August report, through the rest of the year, will incorporate farm production information in the supply and demand estimates.”
August’s WASDE report projected the 2013 corn crop at 13.763 billion bushels, which would be a record crop, if realized, and a 2.98 billion bushel increase from 2012’s drought-stricken crop. The report estimates the 2013 corn yield at 154.4 bushels per acre, a reflection of the late planting season and cool, dry weather in the western Corn Belt, according to Davis.
The USDA report predicts 2013-14 corn ending stocks to drastically increase from 719 million bushels for 2012-13 to 1,837 million bushels, elevating the stocks-to-use ratio from 6.4 percent to 14.5 percent.
“This means that the U.S. corn market is likely to go from a 23-day supply to a 52-day supply of corn. This increase in stocks will cause prices to decline from a marketing-average price of $6.95 per bushel for 2012-13 to a projected $4.90 per bushel in 2013-14,” said Davis.
The 2013 U.S. soybean crop is projected at 42.6 bushels per acre, up 3 bushels per acre from the 2012 yield. The soybean crop is estimated at 3.225 billion bushels, up 240 million bushels from 2012 by 104 million less than the production record set in 2009.
The 2013-14 soybean ending stocks are also expected to increase, though not as sharply as corn, from 125 million bushels in 2012-13 to 220 million bushels in 2013-14. In turn, the stocks-to-use ratio also will see an increase from a threadbare 4 percent for 2012-13 to 6.9 percent for 2013-14. The projected marketing-year average prices are expected to decline from $14.40 per bushel for 2012-13 to $11.35 per bushel for 2013-14.
“Due to the late planting season for both corn and soybeans, especially in the western Corn Belt, farmers should expect future reports to provide more accurate estimates that may differ significantly from Monday’s estimate,” said Davis. “While the 2013 corn and soybean crops do not look excellent everywhere, the corn and soybean markets are anticipating much larger crops, which will lead to lower prices and tighter profitability margins for 2014.”