WASHINGTON, May 2, 2012 -Agriculture Department Chief Economist Joe Glauber said the fast start to U.S. corn planting suggests a bin-busting fall harvest and doubling of 2012-13 ending stocks.
Assuming a return to trend yields and planting of 96 million acres, Glauber told a group of farm broadcasters last week, “we should see a very, very big crop and, particularly with demand starting to flatten a bit – at least on the ethanol side, we should see some rebuilding of corn stocks” to levels last seen two years ago, when year-end supplies totaled 1.7 billion bushels.
“That means, obviously, lower prices,” he said, reiterating USDA’s preliminary outlook for season-average cash corn prices to fall to the $5-per bushel range.
USDA will issue its initial forecasts for new-crop supply, demand and prices on May 10.
Corn was 53% planted as of Sunday, USDA said in its weekly crop progress report, up from 12% at the same time last year and the 27% five-year average.
“The start of the crop year looks really good,” Glauber said. Currently, futures prices favor soybeans over corn, and the economist said he wouldn’t be surprised if soy planting ends up higher than the 73.9 million acres farmers said they intend to plant.
Nationwide, soybeans were 12% planted, up from 6% a year ago.
With South America harvesting a drought-reduced crop and China planting fewer acres, “there’s no sign that (China’s) need for protein meal is abating at all,” Glauber observed.
“That means continuing strong trade, and so I think the U.S. soybean picture continues to be quite bright,” he said.
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Original story printed in May 2nd, 2012 Agri-Pulse Newsletter.
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