USDA September crop report more optimistic on corn yields; 2nd largest global crop set for harvest

In Washington, the Renewable Fuels Association reports that the USDA September WASDE and Crop Production reports project an average corn yield of 122.8 bushels per acre (bpa), above analysts’ pre-report expectation of 120.5 bpa. The projected total crop size of 10.73 billion bushels (bbu.) also came in above the average expectation of 10.4 bbu. and is down less than 0.5% from the August estimate. Total supply for 2012/13 is estimated at 11.98 bbu., up slightly from the August estimate due to an increase of 160 million bushels in carry-in.  Because approximately one-third of every bushel of corn used for ethanol returns to the feed market as distillers grains, feed use will account for approximately 5.5 bbu. in 2012/13 on a net basis, compared to net corn use for ethanol of 3.15 bbu. Thus, on a net basis, ethanol use will account for 26% of the total supply, while feed use accounts for 46%. Average prices were reduced 30 cents/bu to $7.90/bu.

Globally, USDA is still projecting the second-largest corn crop in history. Production in Argentina is up more than 30% over last year, while Mexico increased output 19%, South Africa 17%, Canada 9%, and China 4%.