In its reports this morning, the U.S. Department of Agriculture bumped yields by a tenth of a bushel to 153.9 bushels per acre and increased harvested acres by 400,000 to 78.6 million. The result is a bigger crop: 12.101 billion bushels. That’s an increase from 12.02 billion in December.
The yield estimate is 3.2 bushels more than last year (when 13.074 billion bushels was harvested on 86.5 million acres) and 4.8 bushels more than 2006-07 (when 10.531 billion bushels was produced on 70.6 million acres).
Besides raising the supply figure, USDA lowered estimates for corn demand. It dropped another 100 million bushels off corn use for ethanol, making that figure 3.6 billion bushels. It also cut food/seed/industrial use by 135 million bushels and corn exports 50 million.
That bumps ending stocks to a healthy 1.79 billion bushels. That’s 670 million more than November's estimate and 316 million more than December's. It's also 166 million more than last year and 486 million more than two years ago.
The average price estimate was dropped a dime on each end of the range to $3.55-4.25 for the 2008-09 marketing year. Last year’s average price was set at $4.20, and two years ago was $3.04.
On ethanol: USDA said an increase in the value of Renewable Identification Numbers (RINs) indicates ethanol demand has slowed, and we already know production is down. RINs are used in lieu of ethanol to meet mandated use levels, essentially allowing last year’s "extra" use of ethanol to be carried into this year. Should most RINs be used up this year, corn for ethanol may bump up considerably again next year. If gas prices move up - say bumbing $3 this spring - ethanol production and demand could jump more quickly.
On yields: This year's average yield is the second-largest on record. Would you have guessed that in April or May? Or even June?
Nebraska's totals: Harvested acres in Nebraska came in at 8.55 million. An average yield of 163 bushels per acre pushed the state's total production to 1.394 billion bushels. A year ago, growers saw an average yield of 160 bushels per acre and a total production figure of 1.472 billion.
Global: USDA pushed 2008-09 global corn ending stocks to 136 million metric tons. This is up from December's estimate of 123.8 mmt and November's 110.1 mmt. Ending stocks in 2007-08 were 128.2 mmt, while 2006-07 global ending stocks stood at 108.9 mmt.
For USDA's supply and demand report, click here.
For its annual crop production report, click here.
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