KSU Corn and Grain Sorghum Market Outlook – May 2013

An analysis of U.S. and World Corn and Grain Sorghum supply-demand factors and 2013 price prospects following the USDA’s May 10th World Agricultural Supply Demand Estimates (WASDE) report can be found on the KSU AgManager website  (http://www.agmanager.info/default.asp).

Following is a summary of the article on Corn and Grain Sorghum market outlook – with the full analysis-article to be available on the KSU AgManager website – to be found at http://www.agmanager.info/marketing/outlook/newletters/Corn.asp

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

Summary

On May 10, 2013 the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports – providing its first projection of 2013 U.S. corn, grain sorghum, wheat and soybean production with associated supply-demand balance sheets and prices for the “new crop” 2013/14 marketing year (i.e., MY 2013/14).

USDA Corn Forecast: The USDA projected that 2013 U.S. corn production would climb to a record high 14.140 billion bushels (bb) – based on record high planted and harvested acreage of 97.3 and 89.5 million acres (ma), respectively, and an average U.S. corn yield of 158.0 bushels per acre (bu/ac). Following from this projection of larger 2013 U.S. corn production (14.140 bb – up from 10.780 bb last year) the USDA forecast sizable increases in “new crop” MY 2013/14 total supplies and use – also resulting in a sharp increase in both U.S. corn ending stocks (up to 2.000 bb from 759 million bu. or ‘mb’ last year), and % ending stocks-to-use (up to 15.5% – up from 6.8% a year ago).  The USDA projected U.S. average corn prices for “new crop” MY 2013/14 of $4.30-$5.10 bu/ac, down considerably from $6.70-$7.10 in “old crop” MY 2012/13.

https://i0.wp.com/www.ksgrains.com/planting.jpg

Kansas Corn Fields being Planted (Source: http://www.ksgrains.com/planting.jpg)

KSU Corn Forecast: KSU projections of 2013 U.S. corn production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Short Yield” Scenario: 20% prob. of 135.0 bu/ac yields, a 11.820 bb U.S. corn crop, 6.5% S/U, & $6.60-$7.60 /bu;  b) “Trendline Yield” Scenario: 70% prob. of 157.4 bu/ac yields, a 14.087 bb U.S. corn crop, 14.2% S/U, & $3.70-$4.70 /bu; and c) “Over Trendline Yield” Scenario: 10% prob. of 164.7 bu/ac yields, a 14.740 bb 2013 U.S. corn crop, 16.1% S/U, & $3.40-$4.40 /bu.

https://ksugrains.files.wordpress.com/2013/05/0ffca-halloween2009173.jpg

Kansas Milo Fields in 2009 (Source: http://warrenfromkansas.blogspot.com/2009)

USDA Sorghum Forecast: The USDA projected that 2013 U.S. grain sorghum production would be 425 mb –based on planted acreage of 7.62 ma, 6.59 ma harvested, and an average U.S. sorghum yield of 64.4 bu/ac.   Larger 2013 U.S. production (425 mb, up from 247 mb in 2012) caused the USDA to project sizable increases in “new crop” 2013/14 marketing year total supplies and use – and resulting in higher U.S. grain sorghum ending stocks (up to 57 mb from 22 mb last year), and % ending stocks-to-use (up to 14.6% – up from 8.5% the previous year).  The USDA projected U.S. average grain sorghum prices for “new crop” MY 2013/14 of $3.90-$4.70 bu/ac, down considerably from $6.65-$7.05 in “old crop” MY 2012/13.

KSU Sorghum Forecast: KSU projections of 2013 U.S. grain sorghum production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Short Yield” Scenario: 25% prob. of 52.5 bu/ac yields, a 287 mb U.S. sorghum crop, 15.1% S/U, & $5.65-$6.65 /bu;  b) “Average Yield” Scenario: 60% prob. of 68.0 bu/ac yields, a 453 mb U.S. sorghum crop, 17.8% S/U, & $3.65-$4.65 /bu; and c) “High Yield” Scenario: 15% prob. of 75.0 bu/ac yields, a 500 mb 2013 U.S. sorghum crop, 20.5% S/U, & $3.40-$4.40 /bu.

World Coarse Grains: World coarse grain total supplies of 1,408 mmt in “new crop” MY 2013/14 are up from 1,128 mmt in “old crop” MY 2012/13, and from 1,154 mmt in MY 2011/12.  Projected World coarse grain ending stocks at 186 mmt (15.2% S/U) in “new crop” MY 2013/14 are up from 154 mmt (13.5% S/U) in “old crop” MY 2012/13, and from 166 mmt (14.3% S/U) in MY 2011/12.  Foreign coarse grain supplies of 1,007 mmt for “new crop” MY 2013/14 are up from 974 mmt in “old crop” MY 2012/13, and 961 mmt in MY 2011/12.

With a) the near record tightness of U.S. corn supplies in “old crop” MY 2012/13, b) potential concerns about late planting and declining 2013 U.S. corn production prospects, and c) the historic predominance of U.S. corn production in World feedgrain export markets, U.S. feedgrain prices are likely to remain high from now through the early summer months of 2013.  Both the anticipated tightness of U.S. corn supplies during June-August 2013 and concerns about potential 2013 U.S. corn production problems are likely to be support U.S. corn prices through the summer months, and lead to increasingly volatile markets through fall 2013.

http://www.world-grain.com/News/News%20Home/Features/2011/5/~/media/Images/WG%20Images/Features/Feature_0511_GrainReserves.ashx

World Grain Reserves at Issue (Source of image: http://www.world-grain.com/News/)

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