September 12, 2008

Corn crop shrinks but still second-largest on record

The U.S. Department of Agriculture today cut corn yield estimates by 2.7 bushels from last month to 152.3 bushels per acre. This translates to a nationwide crop of 12.1 billion bushels – the second-largest crop on record. Yields would also be the second-largest on record. USDA’s estimate is just below the average trade guess.

In Nebraska, USDA dropped yields from 163 bushels per acre to 157 – a pretty significant change, although yields are still high. If realized, it would put the state’s production at 1.37 billion bushels.

With the lower production estimate, USDA reduced its 2008-09 ending stocks estimate 115 million bushels to 1.02 billion.

Corn for feed was also cut by 100 million bushels, which was attributed to increased sorghum feeding, lower expected residual loss with the smaller crop and higher expected prices. The season-average farm price was projected at $5-6 per bushel, up 10 cents on each end of the range.

Corn for ethanol was unchanged at 4.1 billion bushels, and exports were also unchanged at 2.0 billion.

When USDA came out with its report last month - and yield estimates of 155 bushels per acre - many analysts and farmers were unsure that was possible to achieve. With the August weather we had, they’ve been proven correct. Some analysts are already saying this crop will get smaller - but we need to remember that it’s still slated to be the second-largest crop on record, behind last year.

For the full crop production report, click here. For the supply and demand report, click here.

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