"U.S. corn stocks at the end of the 2005-06 marketing year are
projected at 1.9 billion bushels. Stocks at or above 1.2 billion are
considered adequate," said Darrel Good. "The combination of smaller
production or larger use would have to be about 700 million bushels,
or 6.7 percent of the current projection, to result in a tight
supply of corn.
"U.S. soybean inventories at the end of the
2005-06 marketing year are projected at 180 million bushels. Minimum
year-ending stocks are thought to be about 120 million bushels. The
combination of smaller production or larger use would have to be
about 60 million bushels, or 2 percent of the current projection, to
result in a tight supply of U.S. soybeans."
Good's comments came as he reviewed the USDA's August forecasts
for the 2005-06 marketing year for both commodities, which point to
declining, but adequate, supplies.
For corn, producers reported that they planted 81.592 million
acres and intend to harvest 74.368 million acres for grain. A
forecast of harvested acreage for silage was not reported. Harvested
acreage for silage over the past three years ranged from 6.1 million
(2004) to 7.1 million (2002).
"The difference between planted acreage and acreage intended to
be harvested for grain in 2005 is 7.224 million," said Good. "Some
argue that poor crop ratings in a number of areas point to more
acreage harvested for silage or abandoned than reported this month.
The September crop production report may contain additional
information on prospective acreage harvested for grain."
The USDA's August forecast of the U.S. average corn yield
potential was 139.2 bushels per acre. That forecast is based on
information from a survey of a large number of farmers and objective
yield surveys in predetermined locations in 10 states. The objective
yield surveys collect data relative to plant population, ear
numbers, and on kernel row length and ear diameter as maturity
"For the August yield forecast, incomplete data are available on
row length and ear diameter, and little or no data are available on
critical factors such as ear weight and weight of shelled grain,"
said Good. "As a result, yield forecasts tend to become more
accurate in later reports as those factors can be measured. The same
is likely true for the yields forecast by producers.
"In the meantime, debate about yield potential continues,
centered on the likely impact of high temperatures in late July and
In addition to debate about the size of the 2005 corn crop, there
are also differences of opinion about the likely level of corn
consumption during the 2005-06 marketing year, Good added.
The USDA's World Agricultural Outlook Board projects domestic
feed and residual use at 5.75 million bushels, 400 million below
projected use for the current year and about 50 million below use
during the 2003-04 marketing year.
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"Large use during the current year may be the result of an
overestimate of the 2004 crop, but the projection of use for the
upcoming year still appears to be conservative," said Good.
"Domestic processing use of corn is projected at 2.87 billion
bushels, 180 million more than expected use this year. Almost all of
the increase is projected in the ethanol category.
"Given the high prices of petroleum-based fuels, some argue that
ethanol production could exceed the early projections. Opinions
about the projected 125-million-bushel increase in exports are more
divided, with the level of Chinese corn exports as the critical
For soybeans, producers reported that they planted 73.103 million
acres and intend to harvest 72.184 million.
"The difference of 919,000 acres is at the low end of the
experience of the last five years, when unharvested acreage ranged
from 928,000 to 1.858 million acres," said Good. "There is some
expectation that harvested acreage will be a bit smaller than the
The National Agricultural Statistics Service of the USDA uses the
same procedure to forecast soybean yields as to forecast corn
yields. The forecast is based on information from producer surveys
and objective yield surveys in predetermined locations in selected
states. The objective yield surveys collect data on number of
plants, stem nodes, lateral branches, dried flowers and pods, and
pods with beans.
"Data on critical factors such as seed size and weight are not
available for the August survey," said Good. "Yield forecasts from
producers and from the objective yield surveys generally become
accurate in later reports as more data are available.
"The immaturity of the crop for the August forecast leaves
considerable room for debate about actual yield potential. Stressful
weather in late July and early August in many areas was replaced by
more widespread rainfall in mid-August. Expectations appear to be on
both sides of the USDA August yield forecast."
The World Agricultural Outlook Board projects a modest reduction
in use of U.S. soybeans during the 2005-06 marketing year, primarily
as the result of increased export competition for U.S. soybeans and
soybean meal from South America.
"There is little disagreement with the outlook for reduction in
consumption of U.S. soybeans if the South American crop is near the
projected level, but there are differences of opinion about the
magnitude of reduction," said Good. "In addition, there are
contrasting reports coming from Brazil about the likely planted area
of soybeans this year. Early reports suggested no change, while more
recent reports suggest a 5 percent reduction."
[News release from the
University of Illinois College
of Agricultural, Consumer and Environmental Sciences]