Corn

U.S. feed grain supplies for 2012-2013 are projected sharply lower again this month with corn production forecast 2.2 billion bushels lower. The forecast U.S. corn yield is reduced 22.6 bu./acre to 123.4 bu. as extreme heat and dryness continued, and in many areas worsened, during July across the Plains and Corn Belt. As forecast, the 2012-2013 corn yield would be the lowest since 1995-1996. Corn area harvested for grain is also lowered, down 1.5 million acres from the last month’s forecast that was based on the June Acreage report.

U.S. corn production for 2012-2013 is forecast at 10.8 billion bushels, the lowest since 2006-2007. Relatively small increases in carry-in and imports only partly offset this month’s substantial reduction in crop size. Ending stocks for 2011-2012 are projected 118 million bushels higher with lower expected exports, reduced corn use for ethanol and a small increase in imports. Imports for 2012-2013 are also raised, up 45 million bushels to 75 million, reflecting strong domestic corn prices and competitively priced foreign supplies. Total U.S. corn supplies for 2012-2013 are projected down 2.0 billion bushels and at a nine-year low.

This month’s large reduction in U.S. corn supplies and the sharply higher price outlook are expected to further reduce 2012-2013 corn usage. Total use is projected 1.5 billion bushels lower and at 11.2 billion would be a six-year low. The biggest reduction again this month is for feed and residual disappearance, projected down 725 million bushels. Food, seed, and industrial (FSI) use is also projected lower, down 470 million bushels, mostly reflecting a 400-million-bushel reduction in corn used to produce ethanol. Reductions in other food and industrial uses account for the remainder of the FSI decline. Ending stocks for 2012-2013 are projected at 650 million bushels, 533 million lower and the smallest carryout since 1995-1996. The 2012-2013 season-average farm price for corn is projected at a record $7.50-8.90/bu., up sharply from the $5.40-6.40 projected in July. Projected farm prices for the other feed grains are also raised.

Global coarse grain supplies for 2012-2013 are reduced 56.5 million tons mostly reflecting the forecast 55.7-million-ton reduction in the U.S. corn crop. Larger 2012-2013 corn beginning stocks in the United States and Brazil partly offset lower U.S. and foreign coarse grain production. Brazil corn beginning stocks are raised 2.8 million tons based on higher reported production for 2011-2012. Foreign corn production for 2012-2013 is mostly unchanged with increases for China, Argentina, Brazil, Mexico, and South Africa mostly offset by reductions for EU-27, Ukraine, India, Serbia, Russia, Croatia, Moldova, and Canada.

Global 2012-2013 corn trade is projected sharply lower this month in response to tighter U.S. supplies and higher prices. Corn imports are lowered for China, EU-27, Indonesia, Japan, South Korea, Mexico, Vietnam, Israel, Colombia, Peru, and Syria. In addition to the United States, corn exports are reduced for Ukraine, EU-27, and Serbia. Partly offsetting are export increases for Argentina, Brazil, South Africa, and Canada. Global corn consumption is projected 38.9 million tons lower with the United States accounting for more than three-fourths of the reduction. Foreign corn feeding drops 8.8 million tons with only part of the decline offset by higher wheat feeding. Corn feeding is lowered for EU-27, India, Canada, Japan, South Korea, Russia, Ukraine, Vietnam, Israel, and Indonesia. Global corn ending stocks are projected 10.8 million tons lower with increases for China, Brazil, and Argentina only partly making up for the large reduction in the United States and smaller reductions in a number of other countries.