August 29, 2024

US coarse grain production forecast lowered, corn yields expected to reach record highs

The latest US Department of Agriculture (USDA) Feed Outlook report for August revealed that the US coarse grain production forecast for the 2024-25 season has been revised downward by 1.1 million tonnes, bringing the total to 396.4 million tonnes, despite a boost in corn production prospects driven by yield gains that offset a reduction in harvested corn area, Progressive Cattle reported.

Corn production for the 2024-25 season is now projected at 15.1 billion bushels, an increase of 47 million bushels compared to the July World Agricultural Supply and Demand Estimates (WASDE) report. This rise is attributed to a higher yield forecast of 183.1 bushels per acre, which, if realised, would set a record. The harvested corn area, however, is slightly reduced by 0.7 million acres.

Favourable weather conditions across the US Corn Belt during the growing season have contributed to these improved yield prospects. Early-season plantings in states such as Iowa and Kansas have allowed for deeper root development, enabling better access to subsoil moisture. As a result, Iowa's and Kansas' yield forecasts have increased by 8 and 9 bushels per acre, respectively, compared to last year.

Despite the reduction in corn acreage for 2024 relative to 2023, states like Illinois and Iowa are expected to surpass their previous output levels, with projected increases of 120 million bushels and 59 million bushels, respectively. Illinois and Iowa are both on track to achieve record yields if these projections are realised. Additionally, Nebraska's yield forecast has been raised to a potential record-high of 194 bushels per acre, supported by a slight increase in the harvested-to-planted area ratio and a year-on-year yield gain of 12 bushels per acre.

The projected increase in corn supply is anticipated to exert downward pressure on prices, potentially driving up demand. Corn cash prices in central Illinois have been around US$4 per bushel, while US Gulf export prices averaged US$185 per tonne (or US$4.70 per bushel) in July. For the 2024-25 season, US producers are expected to receive an average of US$4.20 per bushel of corn, a 10-cent decrease from the previous forecast.

-      Progressive Cattle