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"In the large crop year of 1994, the
corn crop was significantly larger than the August estimate," said
Darrel Good. "However, in the large crop year of 2000, the crop was
much smaller than the August estimate. For large crop years for
soybeans, the crop exceeded the August estimate in 1994, was smaller
than the August estimate in 2000 and about equaled the August
estimate in 2001."
Good's comments came as he reviewed the
USDA's August crop production report. It estimated the 2003 U.S.
corn crop potential at 10.064 billion bushels, 1.056 billion larger
than the 2002 crop but about 200 million less than generally
expected. The 2003 soybean crop is estimated at 2.862 billion
bushels, about 130 million larger than the 2002 crop but 80 million
below the average trade guess. The 2003 U.S. wheat crop estimate was
smaller than July's projections.
"Corn and soybean prices for harvest
delivery moved back above the loan rate following the
smaller-than-expected production estimates," said Good. "The price
increase provides an opportunity for producers to price more of the
2003 crop and reduces the odds of large loan deficiency payments for
that crop.
"At the midpoint of the USDA's price
projections, countercyclical payments would be made for both the
corn and soybean crops."
The corn crop estimate reflects a
national average yield of 139.9 bushels per acre, 1.3 bushels above
the previous record of 1994 and 9.9 bushels higher than the 2002
average. Of the major corn-producing states, the highest yields are
expected in Iowa (158), Minnesota (156) and Illinois (154). Large
year-over-year increases in average yields are expected in Indiana
and Ohio.
"The August production estimate is 13
million bushels larger than the record crop of 1994 and is expected
to be met with good demand," said Good. "Processing use of corn
during the 2003-04 marketing year is projected at 2.475 billion
bushels, 165 million larger than the estimate for the current year.
Feed and residual use is expected to be down 75 million bushels but
will be supported by a small sorghum crop. Exports are projected to
increase by 200 million bushels during the year ahead due to an
anticipation of smaller Chinese exports."
U.S. corn consumed for all purposes
during the 2003-04 marketing year is projected at 9.9 billion
bushels, leaving year-ending stocks of only 1.184 billion bushels.
The projection of year-ending (Sept. 1, 2004) stocks is only 175
million larger than the projection of stocks at the beginning of the
year.
The USDA projects the 2003-04 marketing
year average farm price in a range of $2 to $2.40, 10 cents higher
than last month's projection. The average for the current year
(ending Aug. 31, 2003) will be near $2.30.
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The August soybean production estimate
is about 30 million bushels less than the record crop of 2001. At
39.4 bushels per acre, the U.S. average yield projection is 1.6
bushels above the 2002 average, 0.2 bushels below the 2001 average
and two bushels below the 1994 record. The highest average yields
are expected in Iowa (46) and Wisconsin (45). Illinois, Indiana and
Minnesota are expected to average 43 bushels per acre.
"The USDA projects a 15-million-bushel
increase in the domestic crush of soybeans and a 40-million-bushel
reduction in exports during the 2003-04 marketing year," said Good.
"World trade of soybeans is expected to grow during the year ahead,
but South America is expected to get a larger share of the market,
as production is projected to expand another 6 percent in 2004.
"Stocks of U.S. soybeans are expected
to grow from 145 million on Sept. 1, 2003, to 220 million on Sept.
1, 2004. The USDA projects the 2003-04 marketing year average farm
price in a range of $4.55 to $5.55, 20 cents above last month's
projection. The average for the current year will be near $5.50."
The 2003 U.S. wheat crop is now
estimated at 2.292 billion bushels, 676 million larger than the 2002
crop but nearly 20 million smaller than the July projection.
"The big change from last month,
however, came in the export projection," said Good. "U.S. wheat
exports for the current year are projected at 1.05 billion bushels
-- 75 million above the July projection, nearly 200 million above
the 2002-03 exports and the largest since 2000-01. Large U.S.
exports are expected to be generated by smaller crops in Europe,
India, China and the former Soviet Union.
"Larger crops are expected in
Argentina, Australia and Canada. Wheat production outside of the
United States is expected to be 6.2 percent smaller than the 2002-03
crop, 2 percent smaller than projected last month and 10 percent
smaller than the record production of 1997-98."
The USDA, Good added, projects the
2003-04 marketing year average farm price of wheat in a range of
$3.10 to $3.70.
"That is 30
cents above last month's projection and compares to the $3.56
average of last year," he said.
[University
of Illinois news release]
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