July 15, 2010

Decreased US plantings have resulted in a decreased projection by 1% from last month for the 2010/11 corn production.

From the March target, producers have decreased plantings of 926,000 acres to 87.9 million acres. Plantings are up from 86.5 million in 2009. Forecast harvested area is decreased 754,000 acres month to 81.0 million acres. The largest year-to-year increases in planted area were recorded in Illinois and Kansas, both up 600,000 acres from last year. Other notable increases were shown in Indiana, up 400,000 acres; Missouri, up 300,000 acres; and Ohio, up 250,000 acres.

The largest declines occurred in Iowa, down 400,000, and Nebraska and South Dakota, both down 350,000 acres from last year. The national average yield projection remains unchanged from last month at 163.5 bushels per acre, down from 164.7 bushels per acre in 2009/10. As of July 4, 71% of the corn crop was rated in good to excellent condition, the same as on-year.

Projected corn use for 2010/11 is down 50 million bushels this month to 13.36 billion. Feed and residual use and food, seed, and industrial (FSI) use remain unchanged at 5.35 billion and 6.06 billion bushels, respectively. Expected corn use for ethanol also remains unchanged this month at 4.7 billion bushels. Exports for 2010/11 were decreased by 50 million bushels to 1.95 billion bushels, as tighter domestic supplies, strong demand from ethanol production, and rising prices reduce the export competitiveness of US corn. As a result, 2010/11 ending stocks were projected 200 million bushels lower at 1.373 billion.

Projected corn use for 2009/10 is up 125 million bushels from last month to 13.315 billion bushels. Feed and residual is raised 175 million bushels from last month to reflect higher-than-expected Q3 (March-May) disappearance as indicated in the June 30 Grain Stocks report. Although daily ethanol disappearance set another record in April, daily production slipped below March's record pace. The new weekly ethanol production data series of the Energy Information Administration (EIA), first reported for the week ending June 4, suggests June production, while up from April, will not reach the pace seen in March. Corn exports for 2009/10 remain unchanged this month at 1.95 billion bushels.

Prices are projected higher with 2010/11 ending stocks expected to be lower this month. The marketing-year average farm price for 2010/11 is projected at US$3.45 to US$4.05 per bushel. The 2009/10 marketing-year average price is expected to be US$3.50 to US$3.60 per bushel.