USDA forecast the U.S. corn crop at 10.8 billion bushels, the lowest since 2006/07 and a big jump down from the 12.9 billion bushel forecast just a month ago, in its first report based on actual field surveys.
The agency predicted record average farm corn prices in a range of $7.50 to $8.90 per bushel, up sharply from the $5.40 to $6.40 per bushel projected in July.
Corn ending stocks for the 2011/12 marketing year ending in September are projected to be 118 million bushels higher at 1 billion bushels with lower expected exports, reduced corn use for ethanol, and a small increase in imports.
Corn ending stock in 2012/13, however, are expected to drop to just 650 million bushels, even as usage is expected to decline. That would be the lowest carryout since 1995/96.
Corn use for feed is expected to drop to 4 billion bushels from 4.8 billion predicted last month.
USDA dropped its forecast of corn use for ethanol by 400 million bushels to 4.5 billion bushels.
Soybean production for 2012/13 is projected at 2.7 billion bushels, down 358 million due to lower harvested area and yields.
Soybean supplies for 2012/13 are projected 12 percent below last month to a 9-year low on lower production and reduced beginning stocks.
Soybean crush is reduced as higher prices reduce domestic use and prospective exports for both soybean meal and oil. Soybean ending stocks are projected at 115 million bushels, down 15 million.
Soybean and product prices for 2012/13 are all raised to record levels this month, reflecting the impact of sharply reduced soybean and corn production.
The U.S. season-average soybean price is projected in a range of $15.00 to $17.00 per bushel, up $2.00 on both ends.
Soybean meal prices are projected in a range of $460 to $490 per short ton compared with $365 to $395 last month.