WASDE: Initial Report on 2013/14 Crops
May 10, 2013
The May WASDE marks the first report estimating the 2013/14 crops and usually packs a punch of surprises. 2013/14 corn yield was lowered from February's early projections, as expected, but was offset by increased planted acres. Soybean balance sheets for 2012/13 remain unchanged. Wheat decreased in almost every aspect of its balance sheet from year to year.
U.S. corn production for 2013/14 was estimated 3.4 billion bushels above 2012/13 to 14.1 billion bushels. Corn yields for the upcoming year were projected at 158.0 bushels per acre, a 5.6 bushel decrease from the USDA's Agriculture Outlook Forum in February. The decrease in yields is due to delays in planting in some of the highest producing corn states.
Planted acres was estimated at 97.3 million acres and harvested acres at 89.5 million. U.S. corn supplies for 2013/14 were estimated at 14.9 billion bushels, an increase of 3.0 billion from last year's drought stricken crop. The season average price for 2013/14 is projected at $4.30 to $5.10.
An increase of 16% was expected for U.S. corn use from 2012/13 to 2013/14. Feed and residual use was expected to increase 925 million bushels year over year. Corn use for ethanol was expected to elevate 250 million bushels through the end of 2013 due to a decrease in corn prices.
Exports for U.S. corn are projected at 1.3 billion bushels, an increase from last year's 750 million bushels which was the lowest level since 1970/71. Increased competition from South America and FSU-12 is expected. Ending stocks for 2013/14 was estimated at 2.0 billion bushels.
Global course grain supplies for 2013/14 were estimated to increase by 113.8 million tons from 2012/13 to 1,407.6 million tons. Large production increases are expected from EU-27, FSU-12, China, Brazil, and Argentina.
Many factors remain vulnerable to weather, especially planted acres and yield. We will keep a close eye on planted corn acreage because if it persists it will be converted to soybean and wheat acreage.
U.S. 2012/13 soybean balance sheets remain unchanged this month.
U.S. soybean yields in 2013/14 were estimated at 44.5 bushels per acre, a 4.9 bushel jump from 2012/13. Increased harvested area and yield for 2013/14 has soybean production at 3.390 billion bushels, a 375 million bushel increase from last year.
Due to increased supplies and competitive pricing U.S. soybean exports for 2013/14 were estimated at 1.450 billion bushels, a 100 million bushel increase from 2012/13. The projected season average price range for 2013/14 was $9.50 to $11.50 per bushel.
Global oilseed production in 2013/14 was increased by 4.7% compared to last year, to 491.3 million tons due mainly to increases in soybean production from South America.
U.S. wheat supplies in 2013/14 were estimated at 2.917 billion bushels, a 7.0% decrease from 2012/13. Wheat production was decreased by 9.0% compared to last year, to 2.057 billion bushels. Yields for the 2013/14 crop year were projected at 44.1 bushels per acre, a drop of 2.2 bushels from 2012/13. The season average wheat price for 2013/14 was estimated at $6.15 to $7.45 per bushel.
Total U.S. wheat use for 2013/14 was decreased year over year by 7.0% due to decreased exports (down 100 million bushels from 2012/13) and a decrease in domestic use.
While this report was slightly bearish, many factors can change due to weather within the next month to affect yield, total production, planted acres, harvested acres, etc. We will keep a close eye on the wet weather pattern in the corn belt and whether farmers will be able to plant the corn crop in time for optimal growing days.