USDA lowers corn price forecast

In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.

In Friday’s monthly WASDE report, the USDA raised its estimate for 2013 broiler production from 37.30 billion lbs. to 37.93 billion lbs., now 2.4 percent above 2012 levels.

The USDA lowered its 2012-2013 corn price forecast by $0.20, to $7.10 per bushel. The futures market reacted bullishly, jumping from $7.08 on Wednesday to $7.25 post-report on Friday.

Moderating corn prices have improved producer margins. In January and February 2013 chicken slaughter rose 1.2 percent; bird weights increased 2.3 percent; eggs rose 1.7 percent and chicken output increased an impressive 4.9 percent higher than a year ago.

The USDA is forecasting 2013 broiler prices at $95.00/cwt, 9.7 percent above 2012 levels. In addition, the USDA increased 2012-2013 corn feed usage by 100 million bushels because of higher anticipated poultry output, but that was offset by a decrease in expected exports, leaving 2012-2013 ending stocks unchanged at 632 million bushels.

Contact John T. Barone at [email protected] [3].