Corn and Grain Sorghum Market Situation and 2013 Outlook (via AgManager)

An analysis of U.S. and World Corn and Grain Sorghum supply-demand factors and 2013 price prospects following the USDA’s December 11th World Agricultural Supply Demand Estimates (WASDE) reports has been placed up on the KSU AgManager website (http://www.agmanager.info/default.asp).

Following is a summary – with the full analysis-article for Corn and Grain Sorghum to be found here.

************************

Summary

Market Impact of December Reports: These USDA reports resulted in no major change in feedgrain market outlook for December-February 2013.  Continuing uncertainty about 2013 corn production prospects in South America, 2013 U.S. corn planted acreage and production prospects, the degree of price rationing of feedgrain use in the U.S. and foreign markets, and potential financial and energy market volatility are major factors affecting grain markets through the spring of 2013.

U.S. corn prices are likely to remain historically “high” through the early summer months – until 2013 U.S. corn acreage, yield and production prospects are known with more certainty.  With the likelihood of record large 2013 U.S. corn planted and harvested acreage, if either “trendline” or “above trendline” U.S. corn yields occur, a significant buildup in U.S. corn ending stocks and sharply lower U.S. corn prices would result by fall 2013.

Corn: In the December 11th World Agricultural Supply and Demand Estimates (WASDE) report the USDA made no changes in its projected supply-demand balances for “new crop” MY 2012/13, leaving  ending stocks at 647 million bushels (mb), with projected U.S. ending stocks-to-use (S/U) of 5.8%. This compares to 7.9% S/U in “old crop” MY 2011/12 and 8.6% S/U in MY 2010/11, and would be the smallest since the record low of 5.0% in MY 1995/96.  U.S. corn prices of $6.80-$8.00 /bu are forecast in “new crop” MY 2012/13 – down $0.20 – but still record high compared to $6.22 in “old crop” MY 2011/12 and $5.18 in MY 2010/11.

KSU projections of 2013 U.S. corn production and MY 2013/14 supply-demand and price scenarios are as follows.

A) “Short Yield” Scenario: 20% probability of 12.053 bb 2013 U.S. corn crop, 7.7% S/U, $5.75-$6.75 /bu prices;

B) “Trendline Yield” Scenario: 60% probability of 14.052 bb 2013 U.S. corn crop, 11.8% S/U, $4.00-$5.00 /bu prices; and

C) “Over Trendline Yield” Scenario: 20% probability of 14.704 bb 2013 U.S. corn crop, 13.4% S/U, $3.75-$4.75 /bu prices.

Grain Sorghum: The USDA made no changes in its projections of “new crop” MY 2012/13 U.S. grain sorghum supply-demand balances. The U.S. average farm price for grain sorghum is projected to be $6.50-$7.70 /bu for “new crop” MY 2012/13.

KSU projections of 2013 U.S. grain sorghum production and MY 2013/14 supply-demand and price scenarios are as follows:

A) “Short Yield” Scenario: 25% probability of 248 mb 2013 U.S. production, 6.7% S/U, $5.45-$6.35 /bu prices;

B) “Average Yield” Scenario: 60% probability of 381 mb 2013 U.S. crop, 11.0% S/U, $3.70-$4.70 /bu prices; and

C) “High Yield” Scenario: 15% probability of 420 mb 2013 U.S. crop, 12.4% S/U, $3.45-$4.45 /bu prices.

World Coarse Grains: World coarse grain supplies of 1,284 mmt in “new crop” MY 2012/13 are down from 1,317 mmt in “old crop” MY 2011/12, and from 1,295 mmt in MY 2010/11.  Projected World coarse grain ending stocks at 146.5 mmt (12.9% S/U) in “new crop” MY 2012/13 are down from 165 mmt (14.3% S/U) in “old crop” MY 2011/12, and from 165 mmt (14.6% S/U) in MY 2010/11.  Foreign coarse grain total supplies of 966 mmt for “new crop” MY 2012/13 are up from 958 mmt in “old crop” MY 2011/12, and 914 mmt in MY 2010/11.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s