New production, consumption forecasts for corn and soybeans
For the current marketing year, the forecasts of consumption are unchanged from the August forecasts, resulting a projection of year ending stocks of 1.855 billion bushels, only 18 million larger than last month's projection. The marketing year average farm price is projected in a range of $4.40 to $5.20, $0.10 lower than the August forecast. We expect the average price to be in the lower end of that range (near the current level) and likely in a relatively narrow range, at least during the first half of the marketing year.
NASS now forecasts the U.S. average soybean yield at 41.2 bushels per acre, compared to the August forecast of 42.6 bushels. With the harvested acreage estimate unchanged at 76.378 million acres, the new forecast points to a crop of 3.149 billion bushels, 106 million smaller than the August forecast. The yield forecast is very near the average trade guess. State-by-state yield forecasts changed by 2 bushels or less except for declines of 3 bushels in Iowa and North Dakota and a 4 bushel decline in Missouri.
The U.S. average soybean yield will be below trend value for the third consecutive year. Late season dryness has reduced the average number of pods per acre in the 11 objective yield states well below the average number in the period from 2004 through 2011. Pod counts, however, were slightly higher than in 2012. The average yield estimate for those 11 states resulted in a derived average pod weight below that of 2012, but well above the 2004 to 2011 average. Hot dry conditions in early September suggest that the October yield forecast will be less than the September forecast.
The September WASDE report made only minor changes to the supply and consumption forecasts for the 2012-13 marketing year just ended, leaving the projection of September 1 stocks at 125 million bushels. For the current marketing year, the projection of the domestic crush was reduced by 20 million bushels and the projection of exports was reduced by 15 million bushels. The smaller projections reflected a combination of smaller supplies, higher prices, and competition from South America. Year-ending stocks are projected at only 150 million bushels, 70 million below last month's projection. The marketing year average farm price is projected in a range of $11.50 to $13.50, $1.15 higher than the August projection. We expect that the production forecast will be reduced in October and that the average price will be in the upper half of the price range. With a smaller crop forecast, prices would be expected to reach the highest level in October, followed by erratically lower prices during the remainder of the marketing year, assuming no substantial problems with the South American crops.