USDA lowered corn production to 12.914 billion bushels for this year’s crop, down 556 million bushels or 4.1 percent from the July prediction of 13.470 billion bushels, according to the latest “World Agricultural Supply and Demand Estimates” (WASDE) report published this week. Despite the Department’s upbeat spin on the “Corn Crop” report: “U.S. farmers are on track to produce the third largest corn crop in history,” ending stocks are expected to be 714 million bushels–“the lowest in 16 years,” according to Reuters.
The season-average farm price is projected at $6.20 to $7.20 per bushel, up 70 cents on each end of the range from July’s forecast of $5.50-$6.50. If realized, the projected increase would add $1.00 on the lower end and $1.90 on the top from the estimated 2010-11 price range of $5.20-$5.30. The average farm price of corn for 2009-2010 was $3.55, according to the WASDE report.
U.S. feed grain supplies for 2011-12 were projected lower in August with sharp drops in forecasts of both corn and sorghum production. According to the WASDE report, the reduced forecast for 2011-12 corn production was due to a reduction in harvested area (down 0.6 percent to 84.4 million acres) and lower expected yields (down 3.6 percent to 153.0 bushels per acre from July’s forecast). USDA attributed the yield reductions to unusually high temperatures and below average precipitation during July across much of the Corn Belt sharply reduced yield prospects.
USDA now sees total projected corn use for 2011-12 at 13.160 billion bushels, down 340 million or 2.5 percent from July’s forecast. Feed and residual use is projected at 4.900 billion bushels, down 150 million, reflecting the smaller crop and higher expected prices. The WASDE report now puts corn use for ethanol at 5.100 billion bushels, down 50 million because of tighter corn supplies and lower forecast gasoline consumption for 2011 and 2012. Projected corn exports for 2011-12 are reduced 150 million bushels with wheat feeding expected to increase, the report said.
USDA projected ending stocks down 156 million bushels or 17.9 percent from last month’s forecast. If this proves correct, the 2011-12 ending stocks of 714 million bushels will be 24.0 percent lower than 2010-11 estimated ending stocks of 940 million bushels and 58.2 percent lower from 2009-10 levels of 1.708 billion bushels, according to the WASDE report.
