USDA projects record corn crop, record supply

By Susanne Retka Schill | November 08, 2013

Bushels being binned in the corn harvest now well underway are forecast to hit a record 13.989 billion bushels, up 146 million bushels higher than the last report. Total corn supplies are also projected to hit a record. With a one-month gap due to the government shutdown, the USDA resumed its monthly World Agriculture Supply and Demand report on Nov. 8.

A 1.9-million-acre reduction in harvested area is more than offset by a 5.1-bushel-per-acre increase in the forecast yield, the report said, although at 160.4 bushels per acre the national average yield did not make a new record, remaining 4.3 bushels per acre below the 2009/10 record. Sorghum production is also higher, up 20 million bushels from the September forecast as higher area boosts production despite a lower yield.

Despite a late planted crop and July and August dryness across much of the Corn Belt, cooler-than-normal summer temperatures and an extended growing season have supported higher-than-expected yields for most producers, the report said. Higher yields are forecast in this month’s WASDE report across the Plains, Corn Belt and South.

U.S. corn supplies for 2013/14 are projected 307 million bushels higher at a record 14,837 million bushels as this month’s increase in production combines with higher beginning stocks from the Sept. 30 Grain Stocks report. Total corn use is raised 275 million bushels, offsetting much of the supply increase. Feed and residual use is raised 100 million bushels with the larger crop.

Corn exports are projected 175 million bushels higher with larger supplies and lower prices that have increased the competitiveness of U.S. corn as indicated by strong outstanding export sales and rising export shipments in recent weeks. Ending stocks for 2013/14 are projected 32 million bushels higher at 1.887 billion.

The projected season-average farm price range for corn is lowered 30 cents at both ends to $4.10 to $4.90 per bushel. Cash and futures prices have responded to rising yield prospects over the past 2 months, sharply reducing the outlook for 2013/14 farm prices. Other notable feed grain changes this month include higher projected 2013/14 exports for sorghum and small revisions to 2012/13 corn and sorghum use. Corn and sorghum trade changes for 2012/13 are based on final August export data reported by the U.S. Census Bureau.

Corn use for ethanol production is lowered 17 million bushels for 2012/13 and 9 million bushels for 2011/12 based on revisions to calendar year 2012 ethanol production by the Energy Information Administration. Sorghum food, seed, and industrial use for 2012/13 is also reduced based on lower 2012 ethanol production.

Global coarse grain supplies for 2013/14 are projected 20.6 million tons higher compared with the September projection. A combination of higher 2012/13 and 2013/14 production and reduced consumption for 2012/13, mostly for corn, boost 2013/14 coarse grain supplies. Global 2013/14 coarse grain production is raised with a 6.2-million-ton increase in corn production. More than half of the increase is for the United States. Corn production is also raised for Russia, India, and the European Union. Corn production for Brazil is reduced with lower expected area as declines in interior corn prices push expected returns into negative territory for the safrinha crop, which will not be planted until January. Mexico production is also lowered.

Global 2013/14 corn consumption is raised 5.5 million tons with foreign consumption up 3.0 million. Corn feeding is raised for Mexico, Russia, Ukraine, Egypt, India, Colombia and Turkey. Industrial use is raised for Brazil, but a larger reduction for China leaves foreign food, seed, and industrial use lower, partly offsetting the global increase in feed use.

World corn exports for 2013/14 are raised 7.7 million tons as lower prices are expected to boost demand. Corn imports are raised for Mexico as sorghum imports are reduced. Sorghum imports, however, are raised for China. Corn imports are also raised for Egypt, the European Union, Colombia, and Turkey; all driven by higher expected feeding. Corn imports are lowered for South Korea with an increase in wheat feeding.

In addition to the increase in U.S. corn exports, 2013/14 exports are also raised for Brazil, the European Union, and Russia. Global corn ending stocks for 2013/14 are projected 12.9 million tons higher with most of the increase in China where consumption has been lowered for both 2012/13 and 2013/14. Corn stock changes elsewhere are mostly offsetting.