October 11, 2011
US corn harvest forecast expected to remain constant
Federal forecasters are anticipated to maintain their forecast for the US corn harvest almost unchanged for two straight months due to damaging hot, dry weather.
The US Department of Agriculture in its monthly crop report will forecast the corn harvest at 12.492 billion bushels, down 0.05% from its September estimate, according to analysts surveyed by Dow Jones Newswires. Estimates ranged from 12.342 billion bushels to 12.69 billion bushels. If the average prediction of analysts is correct, the crop will be just 0.4% larger than last year's harvest.
The USDA is scheduled to release the monthly report at 8:30 a.m. EDT Wednesday (1230 GMT).
The Department also is expected to raise its estimate for inventories as of August 31, 2012, when the crop year ends. Analysts predict supplies at 795 million bushels, up 18.3% from the USDA's September estimate. Estimates ranged from 646 million to 989 million bushels.
The jump in expected inventories would be driven by sizable supplies left over from the last harvest. The USDA surprised traders two weeks ago by estimating farmers and grain elevators had more corn than expected in storage before the latest harvest began at the beginning of September.
Grain users are paying close attention to production and inventories after the most actively traded December corn contract set a new high in late August as analysts slashed their output forecasts. Prices have since pulled back 22% on jitters about the global economy and concerns the earlier supply cuts were too severe. The contract traded around US$6.05 a bushel Monday on the Chicago Board of Trade.
The USDA is expected to forecast the corn yield at 148.9 bushels an acre, up 0.5% from its September estimate, according to analysts surveyed by Dow Jones Newswires. Estimates ranged from 147.2 bushels to 150.9 bushels an acre.
The ongoing corn harvest has uncovered yields that were better than previously expected, said Rich Nelson, director of research for Allendale. Harvest is thought to be about one-third complete.
Nelson said that it's very clear that corn and certainly soy yields are a little better than expected.
Traders also will be looking to see whether the USDA trims its estimate for how many acres will be harvested. They expect more farmers than usual may give up on land they planted because of damage from summer heat and from flooding in the northern Plains and along the Mississippi and Missouri rivers.
The department in September estimated 84.4 million acres will be harvested, but Nelson estimated that number could drop by 500,000 acres. Other analysts projected deeper cuts, with the decline in acres offsetting their forecasts for larger-than-expected yields.