The government estimated that farmers will harvest 10.71bn bushels

The government estimated that farmers will harvest 10.71bn bushels

The price of corn soared yesterday (11 October) after the US government lowered its estimate for the size of this season's yield.

In its monthly crop report, the government estimated that farmers will harvest 10.71bn bushels, down from last month's forecast of 10.73bn bushels and 13% lower than last year.

As a result, corn futures for December delivery gained as much as 5% yesterday, to finish at US$7.7325 per bushel.

The drop in forecast follows the worst drought in the country for 50 years.

The USDA, however, raised its projections for soybean demand on the back of "record" sales to China.

The report forecast soybean inventories of 2.86bn bushels, up 226m based on a higher harvested area and yield. The soybean yield is projected at 37.8 bushels per acre, up 2.5. Supplies for 2012/13 are projected 10% above last month.

Show the press release

WHEAT: Projected U.S. wheat ending stocks for 2012/13 are lowered 44 million bushels as higher feed and residual disappearance more than offsets a reduction in projected exports.

Production for 2012/13 is raised 1 million bushels based on the latest estimate from the September 30 Small Grains report. Feed and residual use is projected 95 million bushels higher reflecting the September 1 stocks that indicated higher-than-expected June-August disappearance. Exports are lowered 50 million bushels on the pace of shipments and sales to date and stronger expected competition. Export projections are lowered for Hard Red Winter and Soft Red Winter wheat. The projected range for the 2012/13 season-average farm price is narrowed 15 cents on both ends to $7.65 to $8.55 per bushel. Small revisions to 2011/12 feed
and residual disappearance and seed use reflect recent updates to stocks and acreage.

Global wheat supplies for 2012/13 are projected 6.2 million tons lower mostly reflecting lower production for Australia, Russia, and EU-27. Production for Australia is lowered 3.0 million tons as a continuation of dryness through September during critical flowering and grain fill stages has reduced yield potential for this year's crop. Production for Russia is lowered 1.0 million tons reflecting the latest harvest reports that indicate lower yields and harvested area for spring wheat. Production is lowered 0.8 million tons for EU-27 mostly reflecting a reduction for the
United Kingdom where excessive harvest-time rainfall has reduced production. Other EU-27 country changes were smaller and mostly offsetting. Production is also reduced for Uruguay, Canada, Algeria, and Kyrgyzstan, each down 0.3 million tons based on the latest indications from government sources. Also reducing 2012/13 supplies this month is a 0.5-million-ton reduction in global beginning stocks mostly on higher 2011/12 exports for Australia. Upward revisions for 2010/11 and 2011/12 Argentina production partly offset the Australia reduction.

Original source: USDA