What is in this article?:
• The consumption projections for both crops reflect judgment about the size of the market under conditions of ample supplies and much lower prices.
• These projections are valuable because they provide context for evaluating the price implications of production potential as it unfolds over the next few months.
“Corn exports are projected at 1.3 billion bushels, well above the revised projection of 750 million bushels for the current year, but well below the 1.8 to 2.0 billion bushels that was common before the 2011-12 marketing year. Lower prices may help to stimulate exports, but competition from South American corn is expected to limit demand growth,” he said.
Feed and residual use of corn is projected at 5.325 billion bushels, well above the 4.4 billion bushels projected for the current year. The projection represents the highest level of consumption in six years, but is well below the peak consumption of 6.15 billion bushels in 2004-05 and 2005-06 when distillers’ grain supplies were still small.
Consumption for all uses, including non-ethanol domestic processing, is projected at 12.92 billion bushels,1.785 billion more than projected for the current year, but about 140 million bushels below the record consumption in 2009-10 and 2010-11. Good said that, for the most part, the projection reflects a very mature market for U.S. corn.
For soybeans, the domestic crush is projected at 1.695 billion bushels, 60 million bushels above the projection for the current year but well below the peak of just over 1.8 billion bushels in 2006-07 and 2007-08.
Exports are projected at 1.45 billion bushels, 100 million above the projection for the current year and just below the peak of 1.5 billion bushels reached in 2009-10 and 2010-11.
Good reported that the total consumption, including seed and residual use, is projected at 3.264 billion bushels, 184 million bushels above use during the current year that was limited by small supplies but about 100 million below the peak in 2009-10.
Projections reflect expectations of a sharp increase in Chinese imports but continued strong competition from South American supplies.
“Stocks of U.S. corn at the end of the 2013-14 marketing year are projected at a nine-year high of 2.004 billion bushels, implying that the 2013 U.S. crop would need to be about 1.25 billion bushels (9 percent) below the current projection to require consumption to be less than currently projected,” Good said.
“Similarly, the U.S. soybean crop would need to be 140 million bushels (4 percent) below the current projection to require consumption to be less than currently projected.
“The 2013-14 marketing-year average farm price of corn is projected in a range of $4.30 to $5.10,” Good added.
“Even though current bids for harvest delivery in much of the Corn Belt are near the upper end of that range, the market has not had a substantial response to planting delays.
“Slow progress through mid-May, along with prospects of widespread rain later this week, may well escalate production concerns and a stronger price response.
“The 2013-14 marketing-year average price for soybeans is projected in a range of $9.50 to $11.50, with harvest bids in much of the Corn Belt currently above the upper end of the range.
“It is still too early for significant production concerns for soybeans,” Good said.
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