October 17, 2006

US corn forecast third largest in 2006/07

Corn production was forecast at 10.9 billion bushels, down 2 percent from last month's 11.1 billion.

Factors contributing to the fall included lower planted and harvested area, and a fall in yields with Illinois, Nebraska and Ohio having the greatest reduction.

The forecast 2006/07 average yield of 153.5 bushels per acre was down 1.2 bushels from last month, but up 5.6 bushels from last year.

Beginning stocks were lowered to 1.97 billion bushels, and total supply projected at 12.9 billion bushels, down from 13.2 billion a year earlier.

The October 1 corn objective yield forecast number of ears per acre for the combined 10 objective yield states recorded its second highest, up 2 percent from last year and a whisker from the record high set in 2004.

Illinois recorded the highest ear-count.

On the use side, feed and residual use was lowered 25 million bushels to 6.1 billion, since residual use falls with high prices and lower yields.

Ethanol production in July (latest numbers available) hit a new record, with 412 million gallons. Total utilisation was projected at 11.9 billion bushels, up 624 million from the 11.3 billion used in the previous marketing year.

Ending stocks were lowered this month by 225 million bushels to 996 million bushels. The strong projected demand and reduced supplies combined to raise the price forecast 25 cents on both the low and high ends of the range to US$2.40-$2.80 per bushel compared with US$2.00 in 2005/06.