USDA’s projected average 2014 corn price of $4.20 looks too low, said Chris Hurt, Purdue University ag economist and marketing specialist. Friday’s USDA Crop Production and World Agricultural Supply and Demand Estimates (WASDE) reports had a bearish impact on corn futures. New-crop December 2014 corn futures closed at near $4.97 per bushel, down more than 13¢.
“The market took it seriously, didn’t it,” Hurt told Corn+Soybean Digest, adding, however, that he feels the report’s projections for corn feed usage, 5.25 billion bushels, are low. That, and the world’s view that “$4 corn is cheap, cheap corn,” should add strength to the overall price for this year’s crop, he said.
“We shouldn’t get quite as concerned with what the market was today (Friday),” he said. “They lowered the corn usage for feed. It’s hard to see that number to be the case. Hog numbers could be up a lot (following the drops caused by PEDV), and poultry numbers should be up.
“I think we’re looking at more of a $4.50-4.60 price. At $4.20, the world will be using corn like crazy.”
USDA projected the average 2014 corn yield at 165.3 bushels per acre. “I think that yield forecast was pretty aggressive,” Hurt said. “I see closer to 162-164 bushels. Of course, we could possibly end up with 170-bushel corn. That could push the price down to the low $4 level.
USDA projected U.S. corn planted acres at 91.7 million. Harvested acres are forecast at 84.3 million. Total production is forecast at 13.93 billion bushels. That, and a carryover of 1.14 billion bushels puts total supply at 15.11 billion, USDA projected.
The stocks to use ratio is forecast at 12.90%. The corn price range was pegged at $3.85-$4.55.
Hurt said delayed planting due to cool weather this spring could reduce that planted acres projection.
“The acreage numbers are probably subject to question,” he said. “We’ll probably see more prevented planting acres (crop insurance claims) in the upper Midwest (due to slow planting.”