November 10, 2010

USDA cuts 2011 corn yield estimates

The USDA trimmed Tuesday (Nov 9) its US corn yield forecast for the 2010-11 marketing season by 1.5 bushels/acre to 154.3 million bushels/acre.

According to USDA's November World Agricultural Supply and Demand Estimates report, the figure comes in only slightly below analysts' forecast of 154.5 bushels/acre, and follows last month's higher than expected yield cut of 6.7 bushels/acre.

Projected corn production in the US was reduced by 124 million bushels to 12.540 billion bushels as yields were reduced.

Corn usage for ethanol production was raised by 100 million bushels to 4.8 billion bushels, "with record October ethanol production indicated by weekly Energy Information Administration data and favourable ethanol producer margins," the USDA said.

The USDA also said ethanol prices continued to follow price movements in corn, which in turn was benefiting producers.

"Although small relative to domestic usage, higher ethanol exports and lower imports are also expected to add to corn use for ethanol with high sugar prices limiting the availability of ethanol from Brazil," the USDA said.

US corn exports were lowered by 50 million bushels for the 2010-11 marketing season to 1.95 billion bushels as higher prices are expected to lead to reduced demand.

Corn ending stocks for the 2010-11 period are projected 75 million bushels lower to 827 million bushels, the lowest since the 1995-96 marketing season.

The season-average farm price was forecast at US$4.80 to US$5.60 per bushel, up US$0.20 on both ends of the range and "well above the previous record of US$4.20 per bushel in 2007-08," the USDA said.