June 11, 2008

 

US corn may drop 10 percent, larger than early forecasts

 

The US 2008-09 corn harvest may drop by 10 percent, even lower than the previous USDA forecast of 8-percent reduction, due to excessive Midwest rains.

 

The USDA stated in its June edition of World Agriculture Supply and Demand Estimates report that corn production forecast for the 2008-09 marketing is 11.7 billion bushels, down from 13.074 billion last year and from May's forecast of 12.125 billion.

 

The new expected average yield is 148.9 bushels per acre, down from 153.9 bushels per acre.

 

The US is experiencing severe weather problems, Mark E. Keenum, US undersecretary of agriculture told the International Grain Conference in London Tuesday (June 10, 2008).

 

Rainfall across the Midwest was as much as four times normal during the past 60 days, according to National Weather Service.

 

In some areas, storms dumped 15 inches more than average, the data showed. The increase is equal to the typical rainfall some fields receive in a year, said Roger Elmore, an agronomist at Iowa State University in Ames.

 

Farms in Iowa were drenched with 5.8 inches of rain last month, or 37 percent more than normal, according to Harry Hillaker, the climatologist for the biggest corn-growing state.

 

The 22.2 inches that fell on Illinois from January through May was 45 percent above normal and the third-wettest on record, the data indicated.

 

The USDA said that this month's reduction of the corn crop reflects slow planting progress and slow crop emergence.

 

The latest rounds of torrential rainfall are expected to reduce plant populations and nitrogen availability, particularly for corn planted after mid-May, the USDA added.

 

However, USDA deputy secretary, Chuck Conner, said it is still too early to hit the panic button. He said that further assessment of the situation is needed.

 

Meanwhile, US farmers are now predicted to get more money for their corn. The USDA said the average predicted farm-gate price for corn is up 30 cents on both ends of the newly forecasted range, which is US$5.30 to US$6.30 per bushel.

 

Corn futures for July delivery rose 2.75 cents, or 0.4 percent, to US$6.57 a bushel in overnight trading on the CBOT. The price has rallied on surging demand for feed and biofuels, which the government said will cut global inventories before the harvest to a 24-year low.