Lower corn yield forecast for 2013/14 reduces supply

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The first survey-based corn yield forecast for 2013/14 in the USDA, National Agricultural Statistics Service (NASS) August 12 Crop Production report forecast U.S. corn yields at 154.4 bushels per acre, 2.1 bushels lower than last month’s projection. As forecast, the 2013/14 corn yield would result in a record corn crop of 13.8 billion bushels but also be down 187.0 million bushels from last month’s projection. Planting delays have resulted in a late crop in the Corn Belt, raising concerns that early frost could reduce yields. However, to date, the crop has progressed well with silking in the 18 major corn-producing States at 94 percent as of August 11, compared with the 5-year average of 95 percent. Combined with lower carryin and steady import forecast this month, the resulting corn supply for 2013/14 is projected at 14.5 billion bushels, down 197 million from July but 22 percent higher than 2012/13.

Total corn use for 2013/14 is forecast at 12.6 billion bushels, down 75 million from last month’s forecast. Feed and residual is cut 50 million bushels from last month’s projection and exports are reduced 25 million bushels. Feed and residual use is lowered as the smaller crop reduces expected residual disappearance, while higher prices and lower projected inventories put downward pressure on feed use. Exports are reduced in response to tighter supplies, higher expected domestic prices, and increased competition from larger foreign corn supplies.

Projected ending stocks for 2013/14 slip 122 million bushels to 1,837 million as lower supplies more than offset reduced use. Ending stocks in 2012/13 are forecast at 719 million bushels, down 10 million this month with an increase in 2012/13 exports more than offsetting a 5-million-bushel increase in imports.

Forecast corn prices received by farmers for 2013/14 are increased 10 cents per bushel on both the low and high end of the range, resulting in a midpoint price of $4.90, compared with $4.80 last month. The price increase stems from tighter supplies due to lower forecast production. The projected stocks-to-use ratio for 2013/14 is 14.5 percent, compared with 15.4 percent last month. The 2012/13 stocks to use is forecast at 6.4 percent.

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