US on track to deliver second-largest corn crop

12 September 2008 19:05  [Source: ICIS news]

(ICIS news)--The US remained on track to deliver its second-largest ever corn crop in 2008/09 despite a small reduction in yield projections, the US Department of Agriculture (USDA) said on Friday.

The USDA said in its monthly report it expects 12.07bn bushels of corn in the 2008/09 crop year. That projection compares with a crop of 13.1bn bushels in 2007/08, the record harvest by US farmers.

However, the latest 2008/09 USDA production forecast is down from a projection of 12.3bn bushels a month ago, due to the lower yield projections.

The government now expects farmers to produce 152.3 bushels of corn per acre, down from 155.0 bushels/acre as projected in August.

The yield drop was largely expected in the market. In addition, the USDA cut its feed-residual corn use projection by 100m bushels for 2008/09, offsetting about half of the drop resulting from the yield reduction.

USDA expects ethanol producers to consume 4.1bn bushels of corn in 2008/09. That projection is unchanged from a month ago. In 2007/08, the US used about 3bn bushels of corn to produce ethanol.

US corn futures were up on Friday, but gains stemmed mostly from buying triggered after a softening in recent sessions.

US corn for December delivery traded at $5.55/bushel, up by 22 cents/bushel from Thursday, but down from $5.69/bushel on 2 September.

The USDA raised its 2008/09 average corn price forecast by 10 cents/bushel to a range of $5.00-6.00/bushel (€3.60-4.32/bushel) in its latest report. US corn prices as assessed by the USDA averaged $4.25/bushel in 2007/08.

($1 = €0.72)

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By: William Lemos
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