January 13, 2006

USDA ups 2005/06 corn production forecast

US farmers will be producing 80 million more bushels of corn than expected a month ago, the USDA predicted Thursday in its latest supply and demand report.

An increased estimate for harvested area is behind the larger production forecast, even though yields are lower than expected, the USDA said.

The 2005/06 US corn production forecast is now 11.112 billion bushels, up from the 11.032 billion bushels predicted in December. That would make it the second largest US crop ever behind the 11.807 billion bushels produced the previous year.

The USDA also lowered its forecast for exports.

"Projected 2005/06 exports are down 50 million bushels from last month based on the slow pace of sales, increased competition and reduced imports from Canada," the USDA said. The export forecast is now 1.85 billion bushels, down from the USDA December prediction of 1.9 billion.

The USDA also lowered its corn export forecast in the December edition of its monthly supply and demand report, mainly because of increased competition with China and the Ukraine.

The USDA raised its 2005/06 carryout prediction by 7 million bushels.