USDA PROSPECTIVE PLANTINGS
One of the reports markets watch is the upcoming Prospective Plantings Report. Expect a minimum of 97 million acres of corn planted. From this number (or the number given on the 28th) we will attempt to make projections of total production for corn in 2013. Most reports I am reading show optimism on per acre yields returning to normal driving the harvest prices below $5.00. Profitability of growing corn at today's prices are encouraging farmers world wide to do all that is possible to meet that demand. This is increasing the supply in the future.
Let's assume we are returning to a normal rainfall year. In a normal year some corn is grown under irrigation, some of those regions have lowered the water table or used their water allocations last year leaving the 2013 crop with less options. Some corn is grown for food contracts, corn chips, popcorn, and sweet corn. The companies doing that were hurt by low yields and need to increase acreage in 2013 to replace their supply shortage. The total corn acres will loose more than normal to both unharvested acres (running out of irrigation) and food , leaving less for feed grains. With that normal year we will produce a surplus of corn but I think that surplus will be absorbed into increased exports as countries rebuild stocks, ethanol used as oil remains high, and livestock feeding trying to rebuild for 2014 in pork and into 2016 in beef.
There are more unknowns it would be like choosing the basketball brackets entering rainfall, temperatures, acres planted, acres harvested, feed, ethanol, cotton acres, soybean acres, hail storms, and management. If all the right ones win then harvested production will be a record amount. If not I guess that is the upset. You pick your brackets and tell me the outcome in price for corn in October.
Serving together, Dean
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