USDA increases corn supply by 80 million bushels for new record

By Susanne Retka Schill | September 12, 2013

The USDA surprised the trade in its Sept. 12 World Agriculture Supply and Demand Estimates report by increasing its projections for the current crop year. The national average corn yield is forecast at 155.3 bushels per acre, up 0.9 bushels from last month. Higher yields for the Central Plains and across the South more than offset yield reductions for Iowa and North Dakota.

Overall, U.S. feed grain supplies for 2013/14 are projected higher this month as forecast increases in corn and sorghum production more than offset declines in projected beginning stocks for the same crops, partly due to increased ethanol use. Sorghum production is forecast 37 million bushels higher with the national average yield raised 6.1 bushels per acre mostly with higher yields and production for Kansas and Texas.

Corn supplies for 2013/14 are projected 18 million bushels higher due to increased production; however, projected imports are reduced 5 million bushels and beginning stocks are down 58 million bushels on lower imports and higher use projections for 2012/13. Projected corn use for 2013/14 is unchanged. Ending stocks for 2013/14 are projected 18 million bushels higher. The projected season-average farm price for corn is lowered 10 cents at both ends of the range to $4.40 to $5.20 per bushel.

Total corn use for 2012/13 is projected 55 million bushels higher. Corn used in the production of ethanol is raised 15 million bushels based on stronger-than-expected August ethanol production as indicated by weekly ethanol production data from the Energy Information Administration. Partly offsetting is a 5-million-bushel reduction in corn used for sweeteners. Corn exports are raised 20 million bushels based on the latest information from the U.S. Bureau of Census and August grain inspections. Projected feed and residual use is raised 25 million bushels reflecting the limited amount of new-crop corn available for use before Sept. 1 due to delayed 2013 crop maturity. The 2012/13 season-average farm price for corn is lowered 5 cents per bushel from the midpoint of last month’s projected range with the lower prices reported for July and August. At $6.90 per bushel, the 2012/13 price remains a record and well above the previous record of $6.22 per bushel in 2011/12.

Global coarse grain supplies for 2013/14 are projected 0.5 million tons lower mostly reflecting lower foreign corn production. Foreign 2013/14 corn production is lowered 2.5 million tons with reductions for Argentina, Canada, Serbia and Paraguay. Reductions for Argentina and Paraguay reflect smaller expected areas for crops that have yet to be planted. Foreign corn beginning stocks for 2013/14 are raised 1.0 million tons mostly with an increase in 2012/13 Brazil production.

Global 2013/14 corn consumption is lowered with reductions in corn feeding in Argentina, Canada, and Serbia more than offsetting an increase for South Korea where wheat feeding is reduced this month. South Korea corn imports are raised accordingly. Corn exports for 2013/14 are lowered for Argentina, Paraguay, and Serbia. Global corn ending stocks for 2013/14 are projected 1.3 million tons higher with larger stocks in Brazil and the United States.