USDA lowered its estimate of U.S. corn production by a staggering 1.82 billion bushels from last month due to persistent and extreme June dryness across the central and eastern Corn Belt and extreme late June and early July heat from the central Plains to the Ohio River Valley.

Projected U.S. corn yield was lowered 20 bushels per acre to 146 bushels reflecting the rapid decline in crop conditions since early June and the latest weather data. Estimated production in USDA’s July 11 Crop Production report was lowered from 14.79 billion bushels to 12.97 billion bushels.

Reduced supplies and higher prices are expected to sharply lower 2012-13 corn usage with the biggest reduction for feed and residual disappearance, projected down 650 million bushels. Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol.

Corn exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments. Ending stocks for 2012-13 are projected at 1.2 billion bushels, down 698 million from last month’s projection.

Soybeans

Soybean production is projected at 3.050 billion bushels, down 155 million bushels as increased harvested area is more than offset by reduced yields. Harvested area, estimated at 75.3 million acres is 2.3 million above the June projection.

Projected soybean yield is projected at 40.5 bushels per acre, down 3.4 bushels from last month. The drop reflects sharply declining crop conditions resulting from limited rainfall since early April coupled with excessive heat across much of the producing area in late June and early July.

Projected soybean exports for 2012-13 are reduced 115 million bushels to 1.37 billion reflecting lower U.S. supplies. Soybean ending stocks are projected at 130 million bushels, down 10 million. Soybean exports for 2011-12 are projected at 1.34 billion bushels, up 5 million, reflecting strong late-season sales and increased imports for China.

Global soybean production is projected at 267.2 million tons, down 3.9 million mostly due to lower production in the United States.

Cotton

Estimated cotton production for 2012-13 is unchanged at 17 million bales, despite a 4-percent reduction in planted area since the June acreage forecast. Exports were raised due to higher projected global imports and slightly reduced foreign competition. Ending stocks are now projected at 4.8 million bales.

World production is reduced 1.5 million bales due to decreases for India, Pakistan, and others.

Rice

Estimated U.S. rice production in 2012-13 was raised 4 percent to 191 million hundredweight this month due mostly to an increase in harvested area, which was raised 107,000 acres to 2.64 million acres. It is still the lowest since 1987-88. Ending stocks for 2011-12 are projected at 29 million hundredweight, up 3.5 million, or 14 percent from a month ago.

Global 2012-13 rice production and ending stocks are reduced from last month, and consumption and trade are raised slightly. Global production is projected at 465.1 million tons, still a record despite decreases totaling 1.4 million mostly due to reductions for India and Ecuador.