Projections of a big new crop of corn
It shouldn’t be a surprise, but the USDA’s monthly supply/demand report projects a big crop for the 2012-’13 marketing year that starts once the new crop is harvested in the fall. Under normal conditions, with the early planting progress the yield should be around 166 bushels per acre. And, with the big acreages reported in planting intentions, it could be a crop of 17.79 billion bushels – almost 2 billion bushels higher than the 2009 record.
The RFA’s numbers man, Geoff Cooper, must have had the USDA historical records on his computer screen Thursday morning waiting for the report to come out, because not long after the WASDE report was released, the RFA sent out Cooper’s analysis, comparing the May 10 projections with historical numbers:
At 14.79 billion bushels, the 2012 corn crop would:
- -Be a record crop by far, beating the 2009 crop of 13.09 billion bushels by 11 percent.
- -Be 65 percent larger than the crop from 10 years ago (8.97 billion bushels in 2002).
- -Be more than twice as large as the average-sized annual corn crop in the decade of the 1980s (7.15 billion bushels on average).
The 2012 projected yield of 166 bushels per acre would:
- -Be a record yield, beating out the 2009 average yield of 164.7 bushels per acre.
- -Be only the third time in history yields have topped 160 bu/acre, the others being 2009 (164.7) and 2004 (160.4).
- -Be 35 percent higher than the average yield from the 1990s and 12 percent higher than the average yield since 2000.
2012-’13 projected carry-out of 1.88 billion bushels would:
- -Be more than double the 2011-’12 carry-out of 851 billion bushels.
- -Be the highest level of carry-out in seven years (2005-’06 carry-out was 1.97 billion bushels).
- -Be the fourth-largest carry-out in the last 20 years.
- -Be 26 percent larger than the average carry-out since 2000.
Cooper’s analysis underscores just how better corn prices stimulates productions. That’s happening not only in the U.S., but in good corn country around the world. The stage is set for new records globally according to the supply/demand report. The USDA projects global coarse grain supplies up 6 percent for new crop feed grains. “Global corn production for 2012-’13 is projected at a record 945.8 million tons, up 75.3 million from 2011-’12, and the sixth straight year that world corn output has set a new record,” the report said. “Foreign corn production is also projected to be a record at 570.1 million tons, up 13.6 million with the largest increases for Argentina, Mexico, Canada, South Africa, China, and Ukraine.” If all those projections come true, and the USDA cautions that these early projections are very tentative, world corn ending stocks when the 2012-’13 marketing year comes to a close in September 2013 could be the highest since 2000-’01.
This news is having predictable impacts on the corn market, and with it the ethanol market, with both sharply lower. There’s a different psychological impact when market volatility goes down than when it’s going up. Of course, that depends on whether one is a corn farmer or an ethanol producer. The reaction to a single report, though, could be a blip. We are about to enter the weather market period and the crazy weather that has brought early and balmy spring conditions can always turn to crop-threatening conditions.