What is in this article?:
- August weather altered corn, soybean market outlook
- Consumption forecast
• The average farm price for corn will likely be higher than expected a month ago, but a sharp increase in prices from current levels to discourage consumption is probably not needed.
• Unlike corn prices, soybean prices are expected to unfold in more of a short-crop pattern like that of last year.
• Under such a pattern, prices would be expected to peak very early in the marketing year in order to discourage consumption and decline as the year progresses, particularly if the South American crop is large again in 2014.
The average U.S. corn yield came in below trend value for three consecutive years from 2010 through last year.
The average soybean yield was below the trend value in 2011 and 2012.
The shortfall in corn yields resulted in declining year-ending stocks and higher prices in both the 2010-11 and 2011-12 marketing years. The small crop of 2012 required rationing of consumption and resulted in record high prices for the 2012-13 marketing year.
Consumption during that marketing year is currently estimated at 11.215 billion bushels, 1.312 billion bushels (10.5 percent) less than consumption in the previous year.
Year ending stocks are projected at 719 million bushels, only 6.4 percent of consumption during the year.
For soybeans, the shortfall in yields in 2011 resulted in higher prices and smaller year-ending stocks for the 2011-12 marketing year than those of the previous year.
The small crop of 2012 resulted in sharply higher prices, rationing of consumption, and a further draw down in year ending stocks.
Consumption for the year just ended is estimated at 3.094 billion bushels, 61 million (two percent) less than during the previous year. Year-ending stocks are projected at 125 million bushels, only four percent of consumption during the year.
While the 2013 production season got off to a rocky start due to late planting in many areas, expectations into early August were for larger crops than in 2012, increased consumption during the 2013-14 marketing year, a build-up in stocks by the end of the year, and much lower prices than during the previous year.
In the Aug. 12 WASDE report, the USDA forecast a record corn crop of 13.763 billion bushels, a 1.46 billion bushel increase in consumption, and year ending stocks of 1.837 billion bushels (14.5 percent of projected consumption).
The 2013-14 marketing year average farm price was projected in a range of $4.50 to $5.30 per bushel, compared to an average near $7.00 for the previous year.
For soybeans, production was forecast at 3.255 billion bushels, 240 million larger than the 2012 crop.