The Agriculture Department released its final crop report for 2012 Friday, offering a glimpse of what last year's drought cost the nation's row crop producers.
At one point last spring, U.S. farmers were forecast to harvest a record crop of 14.8 billion bushels.
But the same weather pattern that enabled growers to plant at one of the fastest rates in history eventually became the worst drought in five decades.
USDA lowered its guess on the corn harvest steadily throughout the growing season and Friday’s report reflects a 27 percent reduction from last spring’s production estimate. Combine that with strong demand and you have a recipe for higher prices.
U.S. farmers are projected to produce 10.78 billion bushels of corn in 2012. While nearly 13 percent lower than last year, it would still be recorded as the 8th largest corn harvest in U.S. history.
Corn carryout for 2012 was lowered 602 million bushels - down 40 percent from 2011.
Despite lower numbers coming in from the field, USDA officials left their corn price range estimate unchanged at $6.80 to $8.00 per bushel.
Private analysts believe price has been the most effective means of rationing the remaining supply but they say there is little room for a weather shortfall this growing season.
USDA officials lowered their guess on domestic wheat ending stocks by 38 million bushels to 716 million bushels. While down fractionally from the previous report, the carryout is 4 percent lower than last year.
The projected farm price was lowered slightly to a range of $7.65 to $8.15 per bushel.
Soybeans were estimated at 3.01 billion bushels – down nearly 2 percent from last year.
U.S. carryout for soybeans is estimated at 135 million bushels which is 20 percent below last year.
USDA reduced its estimate on prices 30 cents to a range of $13.50 to $15.
Traders on LaSalle Street waited in anticipation of the report which was released at its new time midway through the trading day. News of lower harvest numbers and tighter ending stocks pushed corn and wheat higher but the potential of increased global supplies of soybeans pushed the market slightly lower.