US corn crop to set record, but not by mega-margin

Lanworth forecast a rebound in US corn production to a record high, but urged caution over expectations of super-abundant supplies, warning that high temperatures could again curb yields.

The consultancy, renowned for its use of satellite data, said that historical data suggested the US corn yield should reach 163.1 bushels per acre this year "under normal weather conditions".

This is in line with figures from some other commentators including the US Congressional Budget Office, which in a report on Tuesday pencilled in a 161.5 bushels-per-acre yield figure, and a harvest of 14.5bn bushels up 35% year on year.

While the CBO report factored in sharp recoveries in corn consumption too, including a rebound of more than one-half in US corn exports, the increased harvest would see stocks at the close of 2013-14 to an eight-year high of 1.85bn bushels (47.0m tonnes).

Key temperature

However, Lanworth said that a lower yield looked likely, given the likelihood that average minimum temperatures in July and August would exceed a tipping point, of 68.8 degrees Fahrenheit, above which crop potential rapidly fades.

"US summertime temperatures have risen over the last three decades, with a simple linear trend projecting 2013 July and August night-time temperatures will exceed the threshold, and likely reduce corn yield 3% or more from trend," the consultancy said.

It rated with "only" an 11% probability the likelihood that August night-time temperatures will average below 66.2 degrees Fahrenheit, and likely to nurture yields well above the 163.1 bushels-per-acre level.

The group, in its first estimate for the 2013 US corn yield, pegged it at 155.6 bushels per acre, which would be a marked improvement on last year's result, of 123.4 bushels per acre, but fall well short of the trend figure, and the record 164.7 bushels per acre reached in 2009-10.

The harvest was estimated at 13.8bn bushels, enough to set a record, but not as comfortably as some other observers suggest. 

'Substantial uncertainty'

Indeed, Lanworth urged caution over accepting the sizeable yield figure that the US Department of Agriculture is likely to come out with later this month, when it unveils forecasts for 2013-14.

"Because it typically assumes average growing conditions, the USDA will likely set the 2013-14 US corn yield near 163 bushels per acre," the group said.

Factoring in expectations of large planting, which the CBO pegged at 97.0m acres and Lanworth at 97.5m acres, US corn stocks could end the season "near or above 2.0bn bushels" tripling over one season.

"In Lanworth's view, however, historically low 2012-13 ending stocks, combined with a wide range of potential 2013-14 corn production, imply substantial uncertainty to ending stocks and place great importance on summer growing conditions."

'Extreme conditions'

Separately, the group cut by 500,000 tonnes, to 25.1m tonnes, its forecast for Argentina's corn harvest, and by 1.5m tonnes to 51.6m tonnes its estimate of soybean production, citing "persistent and expected dry conditions".

"Weather models continue to predict extreme conditions over Argentina, southern Brazil and south east Paraguay over the next one to two weeks," Lanworth said.

It also trimmed by 200,000 tonnes to 75.6m tonnes its forecast for Brazil's corn harvest, and by 600,000 tonnes to 80.3m tonnes its estimates of the country's soybean crop citing "below normal precipitation" in southern areas.

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