USDA Slightly Reduces US Maize Production to 272.5Mt

The USDA US maize yield estimates were slightly lower compared with their August report but this is offset by higher carry-in stock leaving overall supplies forecast higher. The early maturing crop means US farmers had harvested more of the US maize crop than normal before the new-crop season began on 1 September.

13 Sep 2012 --- The USDA has revised its US maize production figure down to 272.5Mt from the August estimate of 273.8Mt due to a reduction in yield. This is within analyst expectations stated ahead of the report with individual estimates from IGC (275Mt), Informa Economics (262Mt), and FC Stone (269Mt) giving an idea of what the market had priced in previously.

The maize production figure is being driven by two factors:

1. Crop abandonment which was unchanged from the August report and remains at 9.07% - still below that seen in previous  drought years.

2. The forecast average yield fell only 0.05% from the August estimate to 122.8bu/ac (7.71t/ha).

The USDA US maize yield estimates were slightly lower compared with their August report but this is offset by higher carry-in stock leaving overall supplies forecast higher. The early maturing crop means US farmers had harvested more of the US maize crop than normal before the new-crop season began on 1 September. As a result the USDA have reduced the 2011/12 feed demand figure which allows more maize to be carried over for use in the 2012/13 season.

This year, 39Mha of maize was planted; the highest since the 1930’s and had given the prospect of a recovery in global feed grain stocks. These estimates put end of season 2012/13 US maize stocks at 18.62Mt, 2.11Mt above that forecast in August but still 11.4Mt lower than 2011/12. This represents 6.5% of annual US total demand.

The impact of high prices on demand is more difficult to forecast. The USDA cut feed demand forecasts by 18.42Mt in the August report to 103.51Mt but the September forecasts have increased this slightly to 105.42Mt based on higher usage in the next few months due to the early harvest. Maize demand from US ethanol producers is forecast at 114.3Mt, 12.7Mt below last season but unchanged from August’s estimate.

US soyabean production was cut to 71.69Mt from 73.27Mt. The yield was reduced from 36.1bu/ac (2.42t/ha) to 35.3bu/ac (2.37t/ha) while the abandonment area was unchanged from August. Year ending stocks are forecast unchanged at 3.13Mt. While lower demand  means that this represents a slightly higher proportion of use at 4.3%, it is still the lowest since 1964/65.

In other world markets, the main revisions for wheat were in Russia where production was forecast down by 4Mt to 39Mt in line with other independent analysts. At the end of August the Russian Government reduced their total grain harvest expectations to 70-75Mt in 2012 from a previous estimate of 75Mt.

EU-27 maize production forecasts were revised lower to 57.14Mt from 61.54Mt in August, in recognition of dry conditions in central and southern EU countries. Only minor reductions of 0.5Mt were made to the EU-27 wheat crop, which has fared better.

Southern hemisphere crops start to become a focus at this time of year as planting progresses in South America and crops develop in Australia. Australian wheat forecasts were unchanged at 26Mt in August, while Argentine and Brazilian soyabean estimates were also kept at the same level as August.