10 September 2010 17:12 [Source: ICIS news]
HOUSTON (ICIS)--Commodities markets reacted calmly on Friday after the US Department of Agriculture (USDA) cut its forecast by 2% for the 2010 corn crop and increased its projection by 1% for soybean production.
Corn production was forecast at a record 13.2bn bushels, down 2% from the August forecast but up from the previous record of 13.1bn bushels set in 2009, USDA said.
In mid-morning trading at the Chicago Mercantile Exchange, September corn was trading 1-2 cents/bushel lower from the previous day, while soybeans traded about 14 cents/bushel higher.
Prior to the numbers release, US House agriculture committee chair Colin Peterson had said there would be plenty of corn available for ethanol production. In fact, Peterson on Thursday warned New York dairymen in Saratoga Springs that there could be too much corn this year.
“We’ve got a big problem in the ethanol industry," he said, according to local newspaper The Saratogan. "They’re worse off than dairy. About 4.7 billion bushels of corn go to ethanol each year. Say we don’t have that market, if we lose this industry, what’s going to happen?
"I’m very worried about where this ethanol thing is going and you folks should be, too. We’re the country that grows the most corn in the world. I think we’re going to have too much," he said.
Based on conditions as of 1 September, US corn yields were expected to average 162.5 bushels per acre, down 2.5 bushels from the previous month and 2.2 bushels below last year’s record of 164.7 bushels, USDA said.
Forecast yields decreased from last month throughout much of the US corn belt, Tennessee valley, and delta regions. Yields were up from August in the lower portions of the US southeast.
Meanwhile, soybean production was forecast at a record 3.48bn bushels, up 1% from August and 4% above last year, USDA said.
Soybean yields were also expected to average a record 44.7 bushels/acre, up 0.7 bushels/acre from both last month and last year.
Compared with August, yields were forecast higher or unchanged across the central and northern corn belt, with the exception of Michigan.
If realised, the forecast yield in Illinois, Minnesota, Nebraska, New York, and North Dakota would be a record high.
Area for harvest in the US was forecast at 78m acres, unchanged from June but up 2% from 2009, according to the USDA.
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