The 2013 planting season is quickly approaching and it appears to be an “about face” from 2012. We have witnessed record high corn and soybean prices from strong fundamentals, including tight supplies from reduced production due to the 2012 drought and strong global demand. Unfortunately, the cure for high prices is high prices and we have slashed export and domestic demand for the balance of 2013.
The upcoming USDA March Planting Intentions Report is expected to show 99 million acres of planted corn for 2013, compared to 97.2 million acres in 2012, which was the largest corn crop since 1937. As the industry talks about planting mixes (corn, soybeans, wheat and cotton), we have to throw in the possibility of gaining another 1 -2 million acres over last year. The corn/soybean ratio still leans to planting corn and, although regionally there may be differences, we expect Nebraska irrigated producers to plant corn. The expected increase in corn acreage and the likelihood of improved U.S. corn yields in 2013 will put a strain on the 2013-14 Supply/Demand tables. There are 3 different production scenarios in the table below and you can see the effect of 99 million planted acres, assuming last year’s yield, trendline yield, a record yield, and the residual effect of usage cuts due to $7.50 corn for 2012. When 99 million acres of corn are planted, you can see that even with a yield close to 2012, carryout will put some significant downward pressure on the corn market later in 2013.The table below shows the USDA’s Supply/Demand Report data for the last four years and projected data for 2013/14.
For more information on the 2013-14 Planting Intentions or Supply/Demand information, you can contact the UFC origination team: Grain: 402.362.8414, Allen Zumfe: 402.362.8450, Lori Wyman: 402.362.8449, Maxine Goelz: 402.527.5511, Rusty Morehead: 402.362.8458, Josh Gartner: 402.362.8459, Amanda Lemburg: 402.362.8421, or Tyler Kester: 402.362.8426
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