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Crop estimates friendly for corn, neutral for bean prices

     The U.S. corn crop in 2012 totaled 10.8 billion bushels, down 13 percent from last year, USDA reported. Farmers harvested 3.01 billion bushels of beans, down 3 percent from a year ago.

     The national average yields were projected at 123.4 bushels per acre for corn (up 1.1 bushel from the November forecast but down 23.8 bushels from last year) and 39.6 bushels per acre for beans (up 0.3 from November but down 2.3 bushels from a year ago).

     But the increase in corn yields was offset by a 300 million bushel boost in consumption of corn for feed and residual use. Feed and residual use of wheat also was raised by 35 million bushels.

     Ending stocks subsequently were lowered by 44 million bushels for corn, to a total of 602 million bushels, and by 38 million bushels for wheat. Soy stocks were raised 5 million bushels, but remained tight at 135 million bushels.

     “That (increased corn feeding and lower stocks numbers) was the bullish catalyst of the report,” Mike Krueger, market analyst with The Money Farm, said during a teleconference hosted by the Minneapolis Grain Exchange.

     Prices for corn and wheat rallied significantly on Friday while soybean prices leveled off.

     “If corn and wheat can trend higher the next few weeks, it may be enough to give soybeans a lift over time,” Dale Durchholz, AgriVisor senior market analyst, told FarmWeek.

     “Corn stocks and, to a lesser extent, wheat stocks, and (lower-than-expected) winter wheat plantings were the key numbers (in USDA’s Friday reports),” he continued. “There’s a potential for positive repercussions in the marketplace the next number of weeks.”

     USDA on Friday projected yield averages in Illinois of 105 bushels per acre for corn and 43 bushels per acre for beans. The corn yield is the lowest in the state since 1988 (73 bushels per acre) while the bean yield is the lowest statewide since 2003 (37 bushels per acre).

     Krueger projected near-term prices could approach or surpass $7.50 per bushel for corn and $14.50 for beans.

     “However, the new-crop (prices) will be reluctant to follow due to expectations of big acreages (this spring),” he said.

     Large crops in South America also are expected to compete with U.S. crops on the world market and possibly pressure prices.

     USDA projected total South American soy production this year will total 5.4 billion bushels. The Ag Department on Friday raised bean production in Brazil by 55 million bushels and lowered it in Argentina by 36 million bushels.

     “South American crops are going to start flowing into the pipeline in the next few months,” Durchholz said.

     USDA left its soybean export forecast unchanged at 1.345 billion bushels and lowered corn exports by 200 million bushels to just 950 million bushels.

     If realized, this year would mark the first time since 1971/72 the U.S. exported less than 1 billion bushels of corn, Durchholz noted.

Crop Production report:  http://www.nass.usda.gov

Supply-Demand update:  http://www.usda.gov/oce/commodity/wasde/