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US maize crop cut to 274Mt

The USDA today revised their US maize production figures down to 274Mt from the July estimate of 329Mt

This represents a 27% fall in production from their June figure of 375Mt. Analysts had been expecting a figure of below 300Mt, with individual estimates from IGC (300Mt), Informa Economics (262Mt), and FC Stone (279Mt) giving an idea of what the market had priced in.

Jack Watts, AHDB/HGCA Senior Analyst, said: “Early in the spring in response to the strongest plantings since the 1930s, the world was anticipating a recovery into global feed grain supplies, however the events of the grain situation is infact likely to get worse rather than better than last year.”

The maize production figure is being driven primarily by two factors:

Crop abandonment increased from 7.8% to 9.07%, below that seen in previous drought years.

The forecast average yield fell 15.5% from the July estimate to 123.4bu/ac (7.73t/ha).

If realised this would be the lowest level of US maize production since 2006/7 and lowest yield since 1995/96.

This year, 39Mha of maize was planted; the highest since the 1930’s and had given a prospect of a recovery in global feed grain stocks. End of season US maize stocks are forecast to be 16.51Mt, 13.54Mt below that forecast in July and represents just 5.8% of annual US total demand.

High prices are already having an impact on demand forecasts with US feed demand for maize now forecast at 103.51Mt, 12.07Mt below last season. Maize demand from US ethanol producers is forecast at 114.3Mt, 12.7Mt below last season.

US soyabean production was cut to 73.27mt from 83Mt. The yield was reduced from 40.5bu/ac (2.72t/ha) to 36.1bu/ac (2.42t/ha) while the abandonment area increased by 0.92% points to 1.97%. This would be the lowest production figure since 2007/08. Year ending stocks are forecast down to 3.13Mt, (4.2% of demand) the lowest since 1964/65

In other world markets, Russian wheat production was forecast down by 6Mt to 43Mt. Analysts had been anticipating an official reduction in figures on Wednesday but the Russian Government reiterated their belief that Russia would harvest 75-80Mt of grains in 2012.

Ukrainian wheat production was forecast up to 15Mt from 13Mt previously as harvest results beat expectations. Maize production was forecast at 21Mt, down 3Mt from the previous estimate. Ukraine is likely to be a key supplier of maize to the global market this season due to the lower US availability and until South American crops come on stream in early 2013.

Early Australian wheat forecasts were left unchanged at 26Mt, despite dry weather concerns in the country.


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