November 11, 2005

USDA raises 2005-06 US corn production forecast again

The USDA on Thursday again raised its forecast for US corn production.

The USDA, in its monthly supply and demand report, predicted corn production for 2005-06 would reach 11.032 billion bushels, a 175-million-bushel increase from 10.857 billion bushels last month. That, USDA said, would create "the second largest crop on record" behind the 11.807 billion bushels produced the previous year.

Last month, the USDA raised its 2005-06 corn production prediction by 218 million bushels for a forecast of 10.857 billion bushels.

The USDA, in its monthly crop production report, said corn yields are still behind last year, but are improving in unexpected areas.

Average US corn yields are now forecast at 148.4 bushels an acre, a 2.3-bushel increase from the October forecast, but 12 bushels less than last year.

"Of the major producing states, forecast yields are higher than last month in Iowa, Indiana, Minnesota, Ohio and Wisconsin as producers realised larger- than-expected yields and late planted fields matured under favourable fall conditions," USDA said. "Yield prospects are still below last year in all major corn states except Minnesota and Wisconsin where producers are experiencing record-high yields."

The USDA on Thursday also raised its 2005-06 carryout prediction. The new forecast is now for 2.319 billion bushels, up from the October prediction of 2.22 billion last month.

With renewed expectations for a larger corn crop and a higher carryout, USDA again lowered its forecast for corn prices. USDA lowered its forecasts for the price range "down five cents on each end" in November, the same as it did in October. The new projected price range is US$1.60 to US$2.00 a bushel.