USDA revises corn, soybean crop estimates dramatically lower
The U.S. Department of Agriculture on Friday slashed its estimate of corn production in the United States this year as the worst drought in 56 years devastated the crop and rallied prices to a record high.
The department pegged U.S. corn production in the 2012/13 marketing year (Sept/Aug) at 10.779 billion bushels, below trade estimates for 11.026 billion bushels and down from its July estimate of 12.97 billion. The average yield was pegged at 123.4 bushels per acre, below estimates for 127.3 bushels.
The soybean crop was estimated at 2.692 billion bushels, below trade estimates for 2.817 billion. USDA pegged the yield at 36.1 bushels per acre, below expectations for 37.8 bushels per acre.
Global wheat production for 2012/13 is lowered 2.5 million tons as cuts in Russia, Kazakhstan, and Argentina more than offset larger crops in Ukraine, Canada, and India. Despite lower global production, global trade is forecast up as high corn prices will encourage increased feed-quality wheat trade. Russian exports are cut significantly again this month due to continued dry
conditions. Most other exporters are raised this month to make up for this supply shortfall and higher demand for wheat for feeding. U.S. exports, however, are unchanged this month as U.S. supplies remain uncompetitive at current prices.
Global corn trade for 2012/13 is cut sharply again this month because of drastically tighter exportable supplies in the United States outweighing record exportable supplies in South America. Unfavorable conditions also reduce Ukrainian, Serbian, and EU corn production and trade. U.S. corn exports are expected to be the lowest in almost two decades. The 2012/13 season-average farm price is projected sharply higher (nearly 40 percent) at a record. U.S. exports are also lowered for 2011/12.
Global 2012/13 soybean production is reduced mostly due to the smaller U.S. crop as a result of excessive heat and drought conditions. Global trade is down significantly as a large drop in U.S. exports is partially offset by increases in Argentina and Brazil. Global import demand for soybean meal and oil in both 2011/12 and 2012/13 is partially reduced in response to higher prices.