Corn Prices Continue to be a Moving Target

USDA says corn prices have hit a new record after another drop in monthly yield and production estimates while soybean numbers were the reverse. World Ag Outlook Board Chair Gerald Bange says USDA increased its harvested corn acreage forecast – but that was more than offset by a reduced yield estimate…

“They reduced the bushels per acre by 8/10th of an bushel, so they are down to 122 bushels per acre. If you take the area being harvested going up and the yield going down, the production change is very small.”
 

Off 21-million bushels to 10.7-billion bushels for the 2012-2013 crop year. But combined with a projected 214-million bushel drop in beginning corn supplies – Bange says the season-average corn price is now a record…

“The current price forecast for corn is $7.80, down about ten cents from a previous forecast, but that would be a record for the 2012 year if it does come in as we expect.”
 

The previous record was 6-dollars and 22-cents this past crop year. The wheat price helped by corn is forecast at 8-10 and would also be a record for wheat. The soybean price forecast came down 75-cents to 15-dollars and 25-cents on higher area, production and yield – helped by later plant development and some rains…

“They are up to 37.8 bushels per acre now, that’s an increase of 2.5 bushels per acre. We are looking now at the production which is 226 million bushels higher than the previous estimate, 2.86 billion bushels now.”
 

Soybean exports were raised 210-million bushels on increased supplies and lower prices. Corn exports were forecast off 114-million bushels on slow sales to date and strong competition from Brazil. Meantime – Bange says a higher EPA biodiesel mandate for 2013 has boosted soybean oil use…
 

“We have increased our domestic use for soybean oil up to 18.1 billion pounds which is 500 million pounds above the previous forecast of 17.6.”
 

Reflecting EPA’s increase in the mandate from 1-billion gallons to nearly 1.3-billion

Photo courtesy of boston.com