USDA makes marginal changes to corn outlook in June WASDE report

12 June 2013 22:19  [Source: ICIS news]

HOUSTON (ICIS)--While the United States Department of Agriculture (USDA) is aware of the delayed planting season, and the possibility of lower yields and total acreage due to weather issues, the federal agency only made marginal changes to its outlook on the current corn crop in Wednesday's release of the June World Agricultural Supply and Demand Estimates (WASDE) report.

The USDA report did not change the number of acres committed to corn as it remains firm in its estimate that 97.3m acres will eventually be planted and reduced the yield estimates by 135m bushels to a total 14bn bushels of total production.

The most recent weekly crop progress report stated 95% of the corn intended to be planted was in the ground with 85% of the crop having emerged with 63% rated as being in good to excellent condition.

One segment where weather is being at least considered to some extent against the prospects for this year’s harvest is the eventual yields. Average yield is now predicted at 156.5 bushels per acre, which is a decline from the May report which forecasted 158 bushels, and considerable lower than the 163.6 bushels first offered in the initial 2013 WASDE reporting.

“Despite rapid planting progress during mid-May across the Corn Belt, rains and cool temperatures since have delayed the completion of plantings in the western Corn Belt and raised the likelihood that seasonally warmer temperatures and drier conditions in late July will adversely affect pollination and kernel set in a larger share of this year’s crop,” said the USDA.

Another contrast from month-to-month WASDE reporting was that the season average farm price for corn was slightly raised and is now calculated at $4.40 to $5.20 per bushel versus May’s level of $4.30 to $5.10.

The release of the report, and the subsequent examination of the numbers, sent future corn pricing backwards on Wednesday as the July contract closed down 8.6 cents to end the day at $6.50 per bushel.

For soybeans, the USDA did not change planted acreage, 77.1m acres, or the forecasted yields from last month’s estimate of 44.5 bushels per acre. This comes despite the fact that soybeans are lagging behind just like corn with only 71% of the crop planted as of Monday. This is behind the 2012 rate of 97% and the five year average of 84% completed.

Emergence is at 48% versus an 88% mark in 2012 and 67% for the five year average. Total production was left the same at 3.39bn bushels.

The season average farm price for soybeans was raised 25 cents on both ends of the range compared to May with the latest forecast being $9.75 to $11.75 per bushel. The agency said this increase was due to improved forward pricing opportunities and higher corn prices.

As the report left soybeans rather untouched, future pricing for the commodity did not retreat like corn. On Wednesday, the July contract closed up 0.2 cents to $15.40 per bushel.

The next WASDE report will be released on 11 July.

By: Mark Milam
+1 713 525 2653

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