Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.
USDA’s first official report for the 2013 crops came out today and production adjustments are already being worked in for corn. Normally, USDA starts with their February trend yield estimate. This time, USDA took 5.6 bushels off that trend, given the delays in planting progress and the soil moisture concerns. While the 2013 corn crop is still projected to be a record, that record is a bit smaller now.
Corn demand also was adjusted. Feed and export demand lost bushels, while ethanol gained. For 2012 corn, the ethanol increase offset the export decline. For 2013 corn, the feed and export reductions exceeded the ethanol boost by 100 million bushels. If the projections hold, corn ending stocks would grow to over 2 billion bushels.
For soybeans, the changes in the numbers were much more modest. There were no changes for the 2012 crop. For the 2013 soybean crop, the supply numbers were steady, but demand switched between sectors. Domestic crush was raised 35 million bushels, while exports were lowered 50 million. Projected prices for the 2013 crops are $10.50 per bushel for soybeans and $4.70 per bushel for corn.
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Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.
Given the earlier March stocks report, the trade was looking for a sizable increase in 2012/13 ending stocks for corn from today’s USDA supply and demand report. And while USDA did show an increase, it is about 75 million bushels less than expected. Running through the demand changes, feed demand was lowered 150 million bushels and export demand dropped another 25 million. Ethanol demand, however, picked up 50 million bushels. Those changes point to ending stocks at 757 million bushels, up 125 million from last month. Given the smaller demand, the midpoint of the season-average price range dropped to $6.90 per bushel, down 20 cents from last month.
For soybeans, there was some reshuffling of the bushels, but the end result remains the same. Domestic crush was increased by 20 million bushels. Exports were raised 5 million. All of this was offset by a reduction in the residual. So ending stocks remain at 125 million bushels and the midpoint of the season-average price range stayed at $14.30 per bushel.
On the international side, Brazil’s corn crop estimate was raised 1.5 million metric tons. The other estimates from South America remained the same as last month. Brazil is still projected to pass the U.S. as the top producer of soybeans. So for both crops, the South American crops are slightly bigger than expected.
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Crop Outlook
Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the latest USDA report.
The stocks report hit the market like a torpedo, taking old crop prices down quickly. While crop stocks are well below last year’s levels, they are also well above trade expectations. And again, as usual, confusion reigns as we try to reconcile the livestock numbers with calculated feed demand. Feed rations must be much more fluid now than they have been in the past. Now the markets are working on rebuilding some demand. The 80 cent drop for corn and the 55 cent drop for soybeans should create some buying opportunities.
On the new crop side, intended plantings for corn and soybeans mirror last year’s actual plantings. Given that much acreage, the potential is there for record corn and soybean crops. In fact, corn could still set a record even if yields are 10% below trend. That potential took about 25 cents out of both markets for the new crops. But profit margins still exist for both crops. In fact, I’d argue if the current price levels were to hold, both crop and livestock agriculture look profitable as we enter 2014. That’s something we haven’t seen in a while.
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Crop Outlook
Contributed by Steve Johnson, Extension Farm Management Field Specialist, sdjohns@iastate.edu.
Early planting dates in Iowa are April 11 for corn and April 21 for soybeans. Acres planted before these dates are no longer eligible for replant coverage payments should it be necessary to replant. The maximum replant payments each year are equal to 8 bushels of corn and 3 bushels of soybeans. Multiply these bushels times the RMA projected price for that year, which is the February average futures price for December corn and November soybeans used to establish the value of the insurance guarantees that the producer purchases. For 2013 the projected prices are $5.65 per bushel for corn and $12.87 for soybeans, so the maximum replant payments are $45.20 or $38.61 per acre, respectively.
Any acres planted before the early planting dates lose replant coverage, even if the entire farm or insurance unit hasn’t been planted. However, early planting doesn’t affect a farm’s actual production history (APH) yield or revenue insurance guarantee, as long as all other good management practices are followed throughout the growing season. Once the crop is planted, that revenue guarantee is still in effect, and any indemnity payments will depend on the final harvested yield and the harvest price.
More information on important crop insurance dates can be found on the Ag Decision Maker website.
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Crop Insurance, Crop Outlook
corn, Crop Insurance, planting dates, soybeans
Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the March USDA supply and demand report.
The March USDA supply and demand report ended up with the same ending stock levels as the February report, but there were some adjustments for the corn market. Starting with the soybean market, there were no changes in any of the supply or demand numbers. 2012/13 soybean ending stocks hold at 125 million bushels and the midpoint of the season-average price range stays at $14.30 per bushel. For the corn market, U.S. corn imports were raised by 25 million bushels and exports were lowered by 75 million bushels. With feed and residual demand increasing by 100 million bushels, 2012/13 corn ending stocks remain at 632 million bushels. The midpoint of the season-average price range moved down to $7.10 per bushel.
In the international markets, corn production estimates were lowered for Argentina and South Africa, by a half of million metric tons in each case. But overall world production only dropped by 310,000 metric tons. For soybeans, world production dropped by 1.5 million metric tons, based on the same size drop in Argentine soybean production. Brazil is still projected to produce a record 83.5 million metric ton soybean crop. On the export side, Chinese demand for soybeans was held steady, but the demand from Europe is projected to stay on the upswing.
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Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the December USDA grain reports.
The December USDA reports usually shift the numbers a little bit and today’s reports were no exception. For U.S. corn, the only number that moved was the season-average farm price. The midpoint of the price range is now $7.40 per bushel, down 20 cents from last month. For U.S. soybeans, the market got a little tighter, but the price range still was lowered. Soybean crush demand was raised 10 million bushels on stronger soybean oil export demand. This lowered the 2012/13 ending stocks to a projected 130 million bushels, but the season-average farm price was lowered to $14.55, down 35 cents from last month.
Looking at the global picture, world corn production was nearly 10 million metric tons based on increased production in China and Canada. Argentina’s corn crop was lowered by 0.5 million metric tons, while Brazil’s corn crop was held steady. For soybeans, world production was raised slightly with no changes in the Argentine and Brazilian crops.
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Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the September 28th Grain Stocks report.
The Grain Stocks report was released today. Corn stocks came in at 988 million bushels, sizably below the trade estimate of 1.145 billion and USDA’s previous estimate of 1.181 billion. But while stocks are down, so is corn disappearance. In the last quarter, corn disappearance is down 15 percent compared to last year. Corn supply and demand have both shrunk with the drought.
On the soybean side, the stocks numbers, in combination with demand data, forced USDA to update the 2011 soybean production numbers. Soybean planted area was raised 70,000 acres, while harvested area was increased 140,000 acres. The 2011 soybean yield was increased to 41.9 bushels per acre. These changes added 37.5 million bushels to the 2011 production total. Before this adjustment, USDA and the trade had expected 130 million bushels of soybeans in stocks. After the adjustment, the stock number sits at 169 million bushels.
So the corn stocks continue to get tighter, while soybeans gain a little more breathing room. Both crops are still at historically low stocks-to-use rates. This report will likely provide a temporary halt to corn’s recent downward slide.
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Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the September 12th report from USDA.
While the crop estimates continued to shrink this month, the shrinkage was not as bad as expected. Corn harvested area was held steady and corn yield moved down 0.6 bushels per acre. This points to production around 10.73 billion bushels, down only 0.5% from last month. Soybeans saw bigger changes with yields dropping 0.8 bushels per acre to 35.3 bushels. That lowered production estimates by 58 million bushels. Iowa yields came in at 140 bushels per acre for corn and 39 bushels per acre for soybeans. With the September objective yield survey, USDA officials found significant fewer ears and pods per acre than they found last year.
Demand continued to downshift for soybeans. Crush demand was lowered 15 million bushels and export demand was reduced 55 million bushels. In the soybean market, the shifts in demand matched the reduction in supply, so 2012/13 ending stocks are still at 115 million bushels. For corn, there were a lot of little shifts. Feed and residual demand for old crop corn was reduced by 150 million bushels, while new crop feed and residual demand was raised 75 million bushels as newly harvested corn is quickly entering the feed market. Ethanol demand was held steady. Export demand was lowered for both old and new crop corn. The end results is slightly higher ending stocks for 2012/13, at 733 million bushels.
While stocks remain tight, the picture is not as tight as the market expected. USDA adjusted 2012/13 season-average price projections by lowering the corn price range by 30 cents, to a midpoint of $7.90 per bushel, and holding soybeans steady, at a midpoint price of $16 per bushel.
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Chad Hart , ISU Extension Grain Marketing Economist, provides a summary of the August 10th report from USDA.
More Big Shifts
The markets expected big shifts in the USDA numbers and they got them. Yields, production, demand, stocks, and prices were all moved dramatically, based on the drought. Beginning with supply, the national corn yield projection was lowered 22.6 bushels to 123.4 bushels per acre. Harvested area was lowered 1.5 million acres, with most of those losses coming from the southern and western Corn Belt. Those shifts pulled 2.2 billion bushels out of production, dropping the total to 10.78 billion bushels. Soybeans suffered through a similar shift. Yields are set at 36.1 bushels per acre, down 4.4 bushels. Harvested area is off 700,000 acres. Production is down roughly 360 million bushels to 2.69 billion bushels.
Demand is also downshifting with the drought and the rationing has started in earnest. Old crop corn demand was lowered by 115 million bushels as ethanol, sweetener, and export have all slowed down. Projected new crop corn demand dropped by nearly 1.5 billion bushels. Feed and residual demand is set at 4.075 billion bushels, down 725 million from last month. Ethanol demand moves down 400 million to 4.5 billion bushels. Export demand is projected at a 28 year low. New crop soybean demand is projected to fall by over 350 million bushels, with exports pulling back the most.
2012/13 ending stocks are projected at “pipeline” levels, meaning stock projections are about as tight as you’ll ever see from USDA. Corn stocks are computed at 650 million bushels and soybean stocks are at 115 million bushels. With those tight stocks, 2012/13 season-average price projections are well above record levels. Corn jumped $2.30 per bushel to $8.20, while soybeans jumped $2 to $16 per bushel.
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Crop Outlook
Have questions regarding crop insurance, valuing corn silage, or the ACRE Program? Chad Hart, ISU extension and outreach economist has compiled answers to address many of the questions that have come to ISU Extension and Outreach in the last several weeks concerning the 2012 drought. The PDF publication is available through the ISU Extension and Outreach Frequently Asked Questions page. More resources are also available for crops, livestock, home & yard, and financial concerns.
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Crop Insurance, Crop Outlook, Farm Bill
