January 14, 2002
REPORTS SUPPORT CORN AND SOYBEAN PRICES
final production estimates for the 2001 U.S. corn and soybean
crops, released on January 11, were smaller than the November
forecast even through the average yield estimates were larger
for both crops. The decline reflected smaller acreage estimates.
The 2001 corn crop is now estimated at 9.507 billion bushels,
39 million smaller than the November forecast. The U.S. average
yield is estimated at 138.2 bushels per acre, up 0.2 bushels
from the November forecast. Planted acreage of corn in 2001
totaled 75.752 million acres, 257,000 below the previous estimate
and 3.8 million less than planted in 2000. The estimated size
of the 2000 U.S. corn crop was reduced by 53 million bushels,
reflecting a 0.2 bushel reduction in the estimated average yield
and a smaller harvested acreage estimate.
soybean crop is now estimated at 2.891 billion bushels, 32 million
below the November forecast. The U.S. average yield is estimated
at 39.6 bushels per acre, 0.2 bushels above the November forecast.
Harvested acreage of soybeans in 2001 totaled 73 million, 1.137
million below the previous estimate and only 592,000 more than
harvested in 2000. Harvested acreage of principal crops in 2001
was down by 3.7 million acres from area harvested in 2000. Excluding
hay, harvested acreage declined by nearly 7.4 million acres
(about 3 percent).
of corn in the U.S. on December 1, 2001 totaled an estimated
8.264 billion bushels, 265.4 million less than on the same date
last year. The stocks were surprisingly small, suggesting that
the pace of domestic use of corn during the first quarter of
the 2001-02 marketing year was above expectations. As a result,
the USDA increased the forecast of domestic feed and residual
use of corn for the year by 50 million bushels and the forecast
of food and industrial use by 15 million bushels. These increases,
however, were more than offset by a 75 million bushel reduction
in the projection of exports. Year ending stocks of corn in
the U.S. are now projected at 1.546 billion bushels, 28 million
smaller than last month's projection and 353 million bushels
less than the inventory at the beginning of the year. The marketing
year average price of corn is projected in a range of $1.85
to $2.15, the same as projected last month.
of soybeans in the U.S. on December 1, 2001 totaled 2.276 billion
bushels, about 36 million more than on the same date last year.
The USDA increased the forecast of the domestic soybean crush
(5 million) and exports (10 million) for the 2001-02 marketing
year. Year ending stocks of soybeans are now projected at 285
million bushels, 45 million below last month's projection, but
37 million more than the inventory at the start of the year.
The marketing year average price is projected in a range of
$3.90 to $4.70 per bushel, $.10 below last month's projection.
production estimates and carryover projections for corn and
soybeans were very supportive to prices, which had been struggling
to hold post-harvest gains. For soybeans, market attention will
increasingly focus on the prospective size of the South American
crop. In last week's report, the USDA projected that crop at
2.743 billion bushels, 36.7 million above the previous projection
and 193 million larger than last year's crop. Increasingly,
however, there are concerns about dry areas in parts of Argentina
and southern Brazil that may have the potential to reduce average
yields. For corn, attention will focus primarily on the rate
of exports and export sales.
spring, markets will once again be influenced by prospective
crop size in the U.S. The USDA's March Prospective Plantings
report will be of special interest this year. Following the
reduction in corn acreage last year, and the resulting decline
in corn stocks, there is a general feeling that acreage needs
to expand in 2002. The Prospective Plantings report will give
some indication of whether such an increase is planned. In the
bigger picture, the report will also shed some light on whether
the decline in total crop acres will continue in 2002.
the prospects are for the modest price recovery to continue.
March soybean futures appear to have the potential to move into
the $4.60 to $4.75 range and March corn futures have a target
of about $2.25.