Record US corn crop equals lower prices says USDA

The U.S. is on track for a record 14.27 billion bushels of corn and 3.25 billion bushels of soybeans in the 2012-13 year, with the effect being lower prices for corn, soybeans and wheat, the U.S. Department of Agriculture says.

The output projections are above the USDA's baseline forecasts issued this month, which projected corn output of 14.235 billion bushels and soybean output of 3.215 billion bushels in the year from September 2012 to August 2013. In the 2011-12 marketing year, corn output was 12.358 billion bushels and soybean production was 3.056 billion bushels.

Farmers are likely to plant so much corn this year--about 94 million acres, the most since 1944--that production will sharply overshoot demand, pushing up stocks and pulling down prices, the USDA says. Recent high corn prices have also made farmers more likely than usual to plant that crop instead of soy in the next year. 

Another global staple, rice, is also being grown in increasing volumes, the International Grains Council says. Global rice inventories should rise for the seventh consecutive year to a nine-year high of 99.3 million tons in 2011-12, up 4% compared with the previous year, as major exporting countries, especially Thailand, are maintaining larger inventories. (The IGC tabulates its data over an aggregate marketing year covering all major producing and trading countries).

It revised upward its forecast for Thailand's rice stocks at the end of 2012 by 4% to 7.7 million tons, up 43% on year. Thailand's exports have been falling sharply in recent months, after the government started purchasing unmilled rice from farmers at prices that are higher than most export prices from competing countries. The IGC lowered its 2012 rice export forecast for Thailand by 7% to 6.7 million tons, down 37% year on year. 

India's rice stocks will likely total 21 million tons by end-September, up 5.5% on year, the IGC said.

Record global rice output of 463 million tons, up 3% on year, is helping to push prices higher, the IGC said.

"Exceptional production in India and China will more than offset the fall in Brazilian and U.S. output," it said, putting China's rice output in 2012 at 140.5 million tons, up 2.5% on year.

India's government has forecast rice output in 2011-12 at a record 102.8 million tons, a 7% increase from last year. Inventories are more than comfortable, as the government had a stockpile of 31.8 million tons rice at the beginning of this month--more than double the country's mandatory minimum buffer requirement and almost equal to the total global annual trade in rice.