October 12, 2009

Higher-than-expected US corn yields prompted the US Department of Agriculture to raise its 2009 production forecast slightly to 13.018 billion bushels, an 8 percent increase over what was produced last year.

"Based on conditions as of Oct. 1, yields are expected to average 164.2 bushels per acre, up 2.3 bushels from [the USDA's September prediction] and 10.3 [bushels] above last year," the USDA said Friday in its Crop Production report. "If realized, this yield will be the highest on record and total production will be second only to the record set in 2007."

The USDA last month, in its World Agricultural Supply and Demand Estimates report, predicted corn production this year would reach 12.954 billion bushels, up from the 12.101-billion-bushel estimate for 2008. The latest 2009 forecast is now set at 13.018 billion bushels.

Along with the larger production forecast, the USDA also said corn ending stocks will be bigger than previously expected. The USDA said the corn carryout is now expected to total 1.672 billion bushels, up from last month's prediction of 1.635 billion bushels.

Domestic use of corn will be stronger than expected, but that's mostly offset by a new lower forecast for exports, the USDA said.

"Feed and residual use is projected 50 million bushels higher reflecting the higher forecast for yield and crop," the USDA said. "Food, seed and industrial use is also projected higher, up 5 million bushels on higher expected use for sweeteners with tight sugar supplies."

But the USDA lowered its 2009-10 marketing year forecast for corn exports to 2.15 billion bushels, a 50-million-bushel drop from last month's prediction of 2.2 billion bushels.