The USDA said Aug. 12 that it expects 2008 U.S. corn production to be 12.3 billion bushels, up 573 million, or 4.9 percent from last month’s projection, with higher forecast yields and increased harvested area. “Nearly ideal growing season weather across much of the Corn Belt since late June has supported crop development and increases yield prospects,” said the report.
USDA now sees acres planted at 87 million acres, down from the 87.3 million acres assessed last month. In 2007, some 93.6 million acres were planted. USDA now predicts some 79.3 million acres will be harvested in 2008, up from July’s 78.9 million acres. Yield per acre is now 155 bushels, up from 148.4.
Industry veteran Dr. John Douglas of Douglas Associates was surprised by the USDA report. “I made a personal tour of Indiana, Illinois, Iowa, Missouri, Mississippi, Kentucky and Tennessee and north Alabama two weeks ago,” he told Green Markets. “And I’m astonished at their extreme optimism for the corn crop. In all the Corn Belt states we saw much evidence of lack of nitrogen showing up as scattered yellow patches throughout the field. Also in Illinois, Iowa and Missouri we saw many spots where pools of water had killed the corn. Some had not been replanted and were bare. Others had been replanted but were only knee-to-waist high and will need a very late frost in order to mature. As a result of the above I doubt seriously that we will see more than 11 billion bushels harvested this year, and thus will have carryover of well less than one billion bushels, (an S/U ratio of less than 8 percent).”
In the meantime, Deere & Co. Manager of Investor Relations Susan Karlix told analysts the USDA corn price is still extremely attractive to grain farmers while lessening the burden on livestock producers and consumers.
USDA raised corn feed and residual use estimates 100 million bushels with the larger crop and lower expected prices. Ethanol use is raised 150 million bushels, as increased supplies and lower prices are expected to improve plant operating margins and capacity utilization rates. Exports are unchanged as competition from wheat feeding limits prospects for U.S. shipments. Ending stocks for U.S. corn are projected at 1.1 billion bushels, up 301 million from last month. The season average farm price is forecast at $4.90-$5.90 per bushel, down 60 cents on both ends of the range.
USDA forecast soybean yields to be down to 40.5 bushels per acre, down 1.1 bushels from last month’s trend yield projection. The survey forecast U.S. production at 2.973 million bushels, down 27 million from the July projection, but 388 million bushels above last year’s crop. Soybean stocks are down 5 million from last month at 135 million bushels as reduced supplies are only partly offset by a lower crush. The U.S. season-average soybean price for 2008/09 is projected at $11.50-$13.00, down 50 cents on both ends of the range.
USDA increased its forecast for wheat by 2 million bushels. However, it said feed and residual use is projected 35 million bushels lower as increased supplies of feed grains and sharply lower projected feed grain prices reduce prospects for domestic wheat feeding. The all wheat season-average farm price is projected at $6.50-$8.00 per bushel, down 25 cents on each end from last month.