KSU Corn and Grain Sorghum Market Outlook – June 2013

An analysis of U.S. and World Corn and Grain Sorghum supply-demand factors and 2013 price prospects following the USDA’s June 12th 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 is now available on the KSU AgManager website – to be found at http://www.agmanager.info/marketing/outlook/newletters/Corn.asp

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

Summary

On June 12, 2013 the USDA released its Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports.  Although a number of changes were made in projected corn and sorghum supply-demand  balances, the market is now focusing on the June 28th Acreage and Quarter Stocks report for guidance in determination of “new crop” 2013/14 marketing year (i.e., MY 2013/14) price prospects.

USDA Corn Forecast: The USDA projected that 2013 U.S. corn production would be a record high 14.005 billion bushels (bb) – down 135 mb – but up from 10.780 bb in 2012.  This forecast was based on record high planted and harvested acreage of 97.3 and 89.5 million acres (ma), respectively, and U.S. corn yields of 156.5 bu/ac – down 1.5 bu – but up from 123.4 bu/ac in 2012.  The USDA lowered its forecast of “new crop” MY 2013/14 total supplies (14.799 billion bushels, ‘bb’ – down 125 million bushles, ‘mb’) and use (12.850 bb – down 70 mb), leading to lower new crop projected ending stocks (1.949 bb – down 55 mb from May) and down from 769 mb last year).  Projected % ending stocks-to-use of 15.2% are down from 15.5% in May, but up from 6.9% for “old crop” MY 2012/13.  The USDA projected U.S. average corn prices for “new crop” MY 2013/14 of $4.40-$5.40 bu/ac, down considerably from $6.75-$7.15 in “old crop” MY 2012/13.

KSU Corn Forecast: KSU projections of 2013 U.S. corn production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Low Yield-Production” Scenario: 15% prob. of 92.4 ma planted, 82.3 ma harvested, 135.0 bu/ac yields, a 11.104 bb U.S. corn crop, 5.9% S/U, & $6.75-$7.75 /bu;  b) “Likely Yield-Production” Scenario: 70% prob. of 93.5 ma planted, 84.6 ma harvested, 147.5 bu/ac yields, a 12.481 bb U.S. corn crop, 8.5% S/U, & $5.40-$6.40 /bu; and c) “Trend Yield-Production” Scenario: 15% prob. of 97.3 ma planted, 89.5 ma harvested, 157.4 bu/ac yields, a 14.087 bb 2013 U.S. corn crop, 14.5% S/U, & $3.50-$4.50 /bu.

USDA Sorghum Forecast: The USDA maintained its projection from the previous month 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” MY 2013/14 supply-demand balances – 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 $4.00-$4.80 bu/ac, down considerably from $6.70-$7.10 in “old crop” MY 2012/13.

KSU Sorghum Forecast: Projected KSU U.S. Grain Sorghum forecast scenarios are closely tied to those for U.S. corn.  U.S. 2013 grain sorghum production and “new crop” MY 2013/14 supply-demand and price scenarios are:  a) “Low Yield-Production” Scenario: 20% prob. of 52.5 bu/ac yields, a 287 mb U.S. sorghum crop, 10.4% S/U, & $6.35-$7.5 /bu;  b) “Likely Yield-Production” Scenario: 70% prob. of 64.0 bu/ac yields, a 427 mb U.S. sorghum crop, 15.1% S/U, & $5.00-$6.00 /bu; and c) “Trend Yield-Production” Scenario: 15% prob. of 72.0 bu/ac yields, a 480 mb 2013 U.S. sorghum crop, 16.7% S/U, & $3.10-$4.10 /bu.

World Coarse Grains: World coarse grain total supplies of 1,403 mmt in “new crop” MY 2013/14 are up from 1,293 mmt in “old crop” MY 2012/13, and from 1,320 mmt in MY 2011/12.  Projected World coarse grain ending stocks at 184 mmt (15.1% S/U) in “new crop” MY 2013/14 are up from 153 mmt (13.5% S/U) in “old crop” MY 2012/13, and from 166 mmt (14.3% S/U) in MY 2011/12.

The June 28th USDA Acreage and Quarterly Stocks Reports will provide guidance for U.S. 2013 feedgrain production  prospects, the pace of March-May feedgrain use, and the final levels of “old crop” ending stocks.  If substantial declines occur in 2013 U.S. corn planted and harvested acres of as much as 3-5 million acres, the price outlook for U.S. feedgrains may increase significantly for the “new crop” 2013/14 marketing year.

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