August 6, 2012

US corn harvest outlook down due to drought

Due to the historic drought, outlook for the US corn harvest has been slashed by private analytical firm Informa Economics on Friday (Aug 3).

Informa lowered its estimate for the harvest to 10.338 billion bushels from its July estimate of 12.49 billion bushels, traders said. The firm cut its yield estimates for the crop to 120.7 bushels an acre from its previous estimate of 142.5 bushels an acre, they said.

Private analysts have cut their forecasts for the corn and soy harvests due to expectations that the worst US drought in decades will substantially reduce crop yields. Drought worries pushed corn and soy futures to record levels in recent weeks.

Informa's corn-yield estimate was lower than forecasts issued by other private firms this week. On Wednesday (Aug 1), brokerage firm INTL FCStone predicted US farmers will harvest 11.043 billion bushels of corn, with an average yield of 124.3 bushels an acre.

Grain users are uncertain about the size of the upcoming corn harvest after hot, dry weather stressed the crop in June and July. Farmers were counted on to harvest big crops in 2012 to replenish tight inventories.

Informa lowered its estimate for the soy harvest to 2.791 billion bushels from 3.161 billion bushels last month, traders said. Informa pegged the average yield at 37.2 bushels an acre, compared with its July estimate of 42 bushels an acre.

The nation's soy crop is going through its critical reproductive stage over the next few weeks, giving the crop time to offset some of the drought's impact if rainfall is adequate. During the key growing phase, soy plants set their pods and fill them out with beans.

By contrast, the USDA in July estimated the US corn crop at 12.970 billion bushels, using a yield of 146 bushels an acre, and soy output at 3.050 billion, using a yield of 40.5 bushels an acre. The USDA is scheduled to release updated figures soon.