"For corn, the 2012 U.S. crop is estimated at 10.78 billion
bushels, 55 million larger than the November forecast," Good
said. "The estimate of planted acreage of corn for all purposes
was increased by 209,000 acres; the estimate of acreage
harvested for grain was reduced by 346,000 acres; and the yield
estimate was increased by 1.1 bushel per acre. The production
estimate was larger than the pre-report average trade guess of
just over 10.6 billion bushels, but the estimate of Dec. 1,
2012, stocks of corn was actually much smaller than the average
guess. Stocks were estimated at a nine-year low of 8.03 billion
bushels, compared to the average guess of about 8.2 billion.
"The stocks estimate implies that feed and residual use of corn
has not slowed as a result of the small crop and high prices
that began in June of last year. Because of the harvest of a
large quantity of corn before the marketing year began on
Sept.1, 2012, feed and residual use should be evaluated over the
six-month period from June through November 2012. For that
period, feed and residual use of corn totaled about 2.39 billion
bushels, about 110 million more than use during the period from
June through November 2011. Such an increase is a little
surprising, but only because feed and residual use of wheat
during that period was 125 million bushels larger than use in
the previous year. As we have pointed out before, total grain
feeding has been supported by only a very modest cut in
livestock numbers and a sharp decline in the production of
distillers' grain," Good said.
Unlike other years of small production and high corn prices,
Good said that feed use of corn has remained large.
"Such a high rate of use has been possible because corn used
for ethanol production has declined about 10 percent
year-over-year and because exports have been almost nonexistent.
Exports during the first quarter of the 2012-13 marketing year
were at a 41-year low of 220 million bushels. For the year, the
USDA now projects exports at a 43-year low of 950 million
bushels. Year-ending stocks of corn are projected at a 17-year
low of 602 million bushels, and the marketing-year average farm
price is expected to be record-high, in a range of $6.80 to $8
per bushel. Based on the average price received to date, it
appears that the average for the year will be near the low end
of that range," Good said.
According to Good, the 2012 U.S. soybean
crop is now estimated at 3.015 billion bushels, 44 million
larger than the November forecast, reflecting an average yield
of 39.6 bushels per acre, 0.3 bushel above the November
forecast. Stocks of soybeans on Dec. 1, 2012, were estimated at
a nine-year low of 1.966 billion bushels, implying a
larger-than-average "residual" disappearance during the first
quarter of the marketing year.
[to top of second column]
The projection of marketing-year exports was unchanged at 1.345
billion bushels, reflecting the continuing expectations of a record
South American crop in 2013, a larger domestic crush needed to meet
export demand for meal and oil, and limited supplies of U.S.
soybeans. Year-ending stocks are projected at 135 million bushels,
up only 5 million from last month's projection, and the
marketing-year average farm price is projected in a range of $13.50
to $15. Based on the average selling price to date, the average for
the year will likely be in the lower half of that range.
"The Dec. 1, 2012, inventory of U.S. wheat was reported at 1.66
billion bushels, slightly smaller than the average guess," Good
said. "Feed and residual use of wheat during the first half of the
marketing year was about 220 million bushels larger than use during
the same period last year, prompting the USDA to raise the forecast
for the year by 35 million bushels and to lower the projection of
year-ending stocks by a similar amount. The projection of the
marketing-year average farm price was lowered by 5 cents per bushel
in recognition that much of the 2012 crop has already been sold.
Good said that winter wheat seeded for harvest in 2013 is
estimated at 41.82 million acres, 496,000 more than seeded for
harvest in 2012. The increase was smaller than expected, with area
seeded to soft red wheat up 16 percent and area seeded to hard red
and white wheat down about 2 percent.
"Taken together, the information in last Friday's reports may
provide some short-term support for old-crop corn prices and for
wheat prices," Good said. "With such large crop prospects in South
America and the likelihood of a large rebound in U.S. corn and
soybean production in 2013, new-crop corn and soybean prices may
remain under pressure," he said.
[Text from file received from the
University of Illinois College of Agricultural, Consumer and