Unlike other years of small production and high corn prices, Good said that feed use of corn has remained large. “Such a high rate of use has been possible because corn used for ethanol production has declined about 10 percent year over year and because exports have been almost non-existent.

“Exports during the first quarter of the 2012-13 marketing year were at a 41-year low of 220 million bushels.

“For the year, the USDA now projects exports at a 43-year low of 950 million bushels. Year-ending stocks of corn are projected at a 17-year low of 602 million bushels, and the marketing-year average farm price is expected to be record high, in a range of $6.80 to $8.00 per bushel.

“Based on the average price received to date, it appears that the average for the year will be near the low end of that range,” Good said.

According to Good, the 2012 U.S. soybean crop is now estimated at 3.015 billion bushels, 44 million larger than the November forecast, reflecting an average yield of 39.6 bushels per acre, 0.3 bushel above the November forecast.

Stocks of soybeans on Dec. 1, 2012, were estimated at a nine-year low of 1.966 billion bushels, implying a larger-than-average “residual” disappearance during the first quarter of the marketing year.

The projection of marketing-year exports was unchanged at 1.345 billion bushels, reflecting the continuing expectations of a record South American crop in 2013, a larger domestic crush needed to meet export demand for meal and oil, and limited supplies of U.S. soybeans.

Year-ending stocks are projected at 135 million bushels, up only 5 million from last month’s projection, and the marketing-year average farm price is projected in a range of $13.50 to $15.00.

Based on the average selling price to date, the average for the year will likely be in the lower half of that range.

“The Dec. 1, 2012, inventory of U.S. wheat was reported at 1.66 billion bushels, slightly smaller than the average guess,” Good said.

“Feed and residual use of wheat during the first half of the marketing year was about 220 million bushels larger than use during the same period last year, prompting the USDA to raise the forecast for the year by 35 million bushels and to lower the projection of year-ending stocks by a similar amount.

“The projection of the marketing-year average farm price was lowered by $0.05 per bushel in recognition that much of the 2012 crop has already been sold.

Good said that winter wheat seeded for harvest in 2013 is estimated at 41.82 million acres, 496,000 more than were seeded for harvest in 2012. The increase was smaller than expected, with area seeded to soft red wheat up 16 percent and area seeded to hard red and white wheat down about 2 percent.

“Taken together, the information in last Friday’s reports may provide some short-term support for old-crop corn prices and for wheat prices,” Good said.

“With such large crop prospects in South America and the likelihood of a large rebound in U.S. corn and soybean production in 2013, new-crop corn and soybean prices may remain under pressure,” he said.