2012 Crop Estimates Are Out
The USDA projects that the 2012 corn and soybean crops will be significantly bigger than the 2011 crops. But let’s start with the 2011 demand numbers. For corn, old crop feed demand was lowered 50 million bushels, based on alternative feed availability. That change put 2011/12 ending stocks at 851 million bushels, nearly 100 million bushels above trade expectations. USDA also lowered the 2011/12 season-average price midpoint by 10 cents to $6.10 per bushel. For soybeans, crush gained 15 million bushels and exports gained 25 million. These changes put 2011/12 ending stocks at 210 million bushels, 11 million below trade expectations. USDA estimates the 2011/12 season-average price for soybeans at $12.35 per bushel.
For the new crop, this report sticks with the planted acreage from the March Prospective Plantings report, but the yield for corn been adjusted by 2 bushels to reflect the rapid planting thus far. Corn production is projected at 14.79 billion bushels, another record crop projection. Feed, residual, and export demand are all expected to increase for the new crop. So we are looking at record demand as well. But the surge in supply is greater than the increase in demand and ending stocks are projected to increase by over 1 billion bushels. With higher stocks come lower prices and the midpoint of USDA’s 2012/13 season-average price range for corn is $4.60 per bushel, 40 cents lower than the unofficial estimates in February and $1.50 lower than the 2011/12 price.
While the corn market is staring at the potential for larger stocks, the soybean market is tightening back up again. Production is projected at 3.2 billion bushels, but overall demand is projected at nearly 3.3 billion bushels. Domestic and international demand are both expected to increase for the new crop. That brings 2012/13 ending stock estimates down to 145 million bushels, the tightest we have seen since 2008. The midpoint of the 2012/13 season-average price range is $13 per bushel. So soybeans are on pace to set another record as well as this would be the 3rd year in a row to set a record high price.
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