November 10, 2006

USDA lowers US corn production forecast by 160 million bushels

The US Department of Agriculture Thursday (Nov 9) lowered its US corn production forecast by 160 million bushels, a steeper drop than market analysts were expecting to see in USDA's monthly World Agricultural Supply and Demand Estimates report.

The new USDA 2006/07 marketing year forecast is for 10.745 billion bushels, down from the October prediction of 10.905 billion bushels.

The predicted decline in production is accompanied Thursday with a new, smaller estimate of yields. The USDA is now predicting a US average of 151.2 bushels per acre, down from 153.5 bushels/acre reported a month ago.

"The national average yield is lowered 2.3 bushels per acre this month largely reflecting declines in Illinois, Indiana, Iowa and Nebraska," USDA said in the report.

The USDA was expected by analysts to slash the government production forecast, but not as deeply as it did. A Dow Jones survey earlier this week showed USDA was, on average, expected to lower its corn production forecast by 67 million bushels.

Corn harvesting suffered delays in some states in October, the USDA said in its Crop Production report, also released Thursday.

The USDA said that after the first week in October 95 percent of the corn crop "was rated mature or beyond, the same as last year, but four percentage points ahead of normal". But rain "and below normal temperatures hindered harvest progress in the eastern half of the (US) during October".