As expected, the USDA report released on Nov. 8 increased the estimated total corn and soybean production in 2013. Crop production estimates were raised, despite many areas of Iowa, Minnesota and the Upper Midwest dealing with very late planting, along with some late-season drought conditions. However, overall 2013 crop conditions in the U.S. were better than expected, with many areas benefiting from some very favorable weather in late summer, and the extended growing season in the Upper Midwest enhanced some of the later-planted crops. The changes in the November crop production figures were a bit more dramatic than normal due to the fact that no October USDA reports were issued, as a result of the federal government shutdown in early October.
The latest USDA report increased the total expected U.S. corn production for 2013 by 1% from the last USDA report in September, with total corn production now estimated at record level of nearly 14.0 billion bushels. This compares to USDA corn production levels of 10.8 billion bushels in 2012, 12.36 billion bushels in 2011, and 12.45 billion bushels in 2010. The projected total 2013 U.S. corn production would be an increase of 29% compared to the drought year of 2012. USDA did lower the expected acres harvested for corn grain in 2013 by 1.9 million acres, to a new level of 87.2 million acres, recognizing the rather large level of prevented planted acres in Minnesota, Iowa and other states.
USDA is now estimating that the 2013 average corn yield in the U.S. will be 160.4 bushels per acre, which is up 5.1 bushels from the September yield estimate of 155.3 bushels per acre. The 2012 corn yield estimate compares to recent U.S. corn yield levels of 122.3 bushels per acre in the drought year of 2012, 147.2 bushels per acre in 2011, 152.8 bushels per acre in 2010, and the record U.S. average corn yield of 164.7 bushels per acre in 2009.
The Nov. 8 USDA report estimated total U.S. soybean production at 3.26 billion bushels, which is just over 3% above the September estimate of 3.149 billion bushels. The 2013 soybean estimate compares U.S. soybean production levels of 3.03 billion bushels in 2012, 3.09 billion bushels in 2011, and 3.33 billion bushels in 2010. USDA is now estimating the average U.S. soybean yield at 43.0 bushels per acre, which was an increase of 1.8 bushels from the September estimate of 41.2 bushels per acre. The 2013 expected national average soybean yield is well above the drought reduced average soybean yield of 39.6 bushels per acre in 2012, but is comparable other recent average yields of 41.9 bushels per acre in 2011, 43.5 bushels per acre in 2010, and the record U.S. soybean yield of 44.0 bushels per acre in 2009.
The monthly USDA Supply and Demand Report released on Nov. 8 was slightly bearishfor corn and soybean market prices in the coming months, but not as severe as some market analysts had projected prior to the report. The USDA report included the higher corn production estimates for 2013, which were somewhat offset by the reduction in harvested corn acres, and a projected increase in corn export volume in the coming year. USDA is now estimating 2013-2014 U.S. corn ending stocks at 1.89 billion bushels, which compares to 824 million bushels for 2012-13, and 989 million bushels for 2011-12. The rather large projected 2013-2014 corn carryover stocks are likely to prevent any significant rallies in the corn market during the next few months. The next big factor for the corn market will likely be the anticipated planted corn acres for the 2014 growing season.
Based on the November USDA Report, soybean ending stocks for 2013-2014 are expected to be 170 million bushels, which compares to 141 million bushels for 2012-2013, and 169 million bushels for 2011-2012. The increase in estimated ending stocks in the November report was not as high as expected, due to a projected increase in U.S. soybean exports for the coming year. Despite the projections for a slight increase in soybean ending stocks, soybean demand in the U.S. and abroad is expected to remain quite strong, which should result in fairly stable soybean market prices in the coming months.
USDA is currently estimating the U.S average on-farm cash corn price for 2013-2014 in a range of $4.10-4.90 per bushel, or an average of $4.50 per bushel, which is down 30¢ per bushel from the September estimated average price. USDA is projecting the U.S. average soybean price for 2013-2014 in a range of $11.15-13.15 per bushel, resulting in an average soybean price of $12.15 per bushel, which is a decrease of 35¢ per bushel compared to the September estimate. It is important to remember that the 2013-2014 USDA price estimates are the expected average prices from Sept. 1, 2013 to Aug. 31, 2014, for the 2013 crop year, and are not estimated prices for the 2014 crop year.
By comparison, USDA estimated average on-farm grain prices for the coming year in November of 2012 at $7.60 per bushel for corn, and $14.90 per bushel for soybeans. In November 2011, the USDA on-farm price estimates were $6.70 per bushel for corn, and $12.60 per bushel for soybeans. The increasing supplies of both corn and soybeans are expected to keep grain prices at more moderate levels in the coming year, as compared to recent years.