The National Agricultural Statistics Sesrvice (NASS) August 10 Crop Production report forecast U.S. 2012/13 corn yields 22.6 bushels per acre lower at 123.4 bushels, compared with last month’s forecast of 146 bushels.

As forecast, the 2012/13 corn yield would be the lowest since 1995/96. The yield reduction, combined with lower expected harvested acres, down 1.5 million acres from last month’s projection, results in a crop of 10,779 million bushels, 2,191 million bushels lower than July’s projection and 1,580 million below last season. This forecast would result in the lowest production since 2006/07. Harvested acreage for 2012/13 is forecast at 87.4 million acres for grain, up 3.4 million from the previous year.

Unusually high temperatures and well below-average precipitation across much of the Corn Belt in July sharply reduced yield prospects, despite the early planted crop. As of August 5, only 23 percent of the corn crop was rated in good-to-excellent condition in the 18 major corn-producing States, down 37 percentage points from a year ago. Fifty percent of the crop was in the very poor-to-poor range, compared with 48 percent the previous week and 16 percent at this point last season, a year when yields fell below trend. Corn conditions are extremely variable, with crops in close proximity having very different yield potential.

U.S. Corn Use Expected To Slip

According to USDA's Feed Outlook Report, tight supplies and higher prices are expected to force rationing among corn users. Total U.S. corn use for 2012/13 is forecast down 1,495 million bushels to 11,225 million this month as a result of decreased feed and residual use, FSI use, and exports. Total FSI is projected 470 million bushels lower with corn for ethanol lowered 400 million bushels, along with declines in most other FSI categories. Feed and residual use is projected 725 million bushels lower, one of the largest declines ever, reflecting livestock producers’ reactions to record-high corn prices and reduced residual disappearance with a smaller crop. U.S. exports are reduced by 300 million bushels as high prices dampen demand and foreign feeders shift to more competitively priced corn and wheat from foreign producers.

Total corn use for 2011/12 is forecast down 115 million  bushels to 12,490 million bushels this month. Food, seed, and industrial use (FSI) is reduced 65 million bushels to 6,390 million bushels. Lower use for ethanol, down 50 million bushels to 5,000 million, plus a 15-million-bushel reduction for corn used to produce glucose and dextrose, results in the lower FSI use projection. U.S. exports for 2011/12 are reduced 50 million bushels to 1,550 million. Reductions in use leave ending stocks for 2011/12 up 118 million bushels over last month’s projection.

Corn prices received by farmers for 2012/13 are projected at a record $7.50-$8.90 per bushel, up more than $2.00 on both ends of the range this month. The marketing year average reflects higher prices for corn, with tighter ending stocks and tight U.S. feed grain supplies. The 2011/12 corn price range is raised $0.10 cents on the low end for an estimated range of $6.20-$6.30 per bushel.