The June World Agricultural Supply and Demand Estimates report released today by the Agriculture Department reflects the slow corn planting season across much of the Corn Belt due to snow, rain and cool weather, according to analysis by the American Farm Bureau Federation.
Ninety-five percent of this year’s corn crop was planted as of June 9 (only 92 percent in Iowa), but later-planted corn faces the risk of pollination during seasonally warmer temperatures and drier weather expected in late July, which could reduce the yield. June’s WASDE report projected 156.5 bushels per acre for 2013, down 1.5 bushels per acre from May.
Although reduced by 135 million bushels to slightly above 14 billion bushels, corn production, if realized, would still be record setting. The report also reduced projected corn use by 70 million bushels.
AFBF economist Todd Davis said the WASDE report still predicts ending stocks to build significantly over the 2012-13 marketing year levels.
“June’s WASDE projects corn stocks are greater than the pre-report estimates, which reflects negatively on the corn market,” said Davis. “The projected increase in stocks will cause marketing-year prices to drastically fall to $4.80 per bushel for the 2013-14 marketing year compared to $6.95 per bushel in the 2012-13 year.”
The report showed no change in planted or harvested acres for corn or soybeans as the World Agricultural Outlook Board, who publishes the WASDE, waits for the release of the acreage survey, on June 28.
“Trade projections are that about 2 million acres will not be planted to corn this year due to the late season rains and unusually cold weather,” said Davis. “Instead, it is expected that soybean planted acres will increase as farmers plant the crop instead of late planted corn.”
U.S. soybean ending stocks are also still expected to more than double from 125 million bushels in the 2012-13 marketing year to 265 million bushels in 2013-14. The increase will drop the 2013-14 projected soybean price to $10.80 per bushel, down from $14.35 in the 2012-13 marketing year.
Davis said the weather will keep the market captivated during the next three months in an attempt to better understand what proportion of the corn crop was planted later than normal and is at risk of pollinating during adverse conditions.