With USDA corn statistics painting a picture of bountiful Chinese supplies and domestic corn prices trading nearly three times above CBOT futures, something has to give. On one hand, the USDA shows a bountiful China harvest of 222 million tonnes perfectly balanced with demand of 222 million tonnes. In case a perfectly balanced corn supply and demand, were not enough, the projected 80 million tonne closing inventory gives the country a whopping 2014-15 stocks to use ratio of 36.2%.
Late summer USDA reports low-ball crop yield estimates to prevent volatile market shifts. We examine how this year's real yield and harvest numbers will impact prices. Although the USDA boosted its estimated corn crop yield to a record high 167.5 bushels/acre it surprised everyone with its new-found conservatism. With the upward revision in yields, this year's record harvest size was upped 1.2% from the previous 352.1 million tonnes to 356.4 million tonnes.