US corn production to be lowest since 2006

12 September 2012 16:32  [Source: ICIS news]

HOUSTON (ICIS)--The US corn harvest this year is expected to be the smallest since 2006 because of a severe drought in major crop production areas, the US Department of Agriculture (USDA) said on Wednesday.

Corn production is forecast at 10.7bn bushels, down less than 1% from the August USDA forecast and down 13% from 2011, the federal agency said in its monthly crop production report.

The USDA said that based on conditions as of 1 September, corn yields were expected to average 122.8 bushels/acre, down by 0.6 bushel from the August forecast and 24.4 bushels below the 2011 average.

If realised, the 2012 crop would have the lowest average yield since 1995, the USDA said. The area harvested for grain is forecast at 87.4m acres, up 4% from 2011.

Lower corn yields and production in the US corn belt and central plains were partly offset by increases elsewhere, particularly across the south where an early harvest is boosting available supplies, the USDA said.

Because of the US Renewable Fuels mandate, 5bn bushels of corn would be used to produce ethanol during the 2012-2013 corn marketing year (1 September-31 August), representing about 47% of the 2012 crop.

The Renewable Fuels Association (RFA), a trade group for corn ethanol producers, sought to put the crop projections in an optimistic light, saying the estimated yield would result in the eighth largest corn crop on record.

“This report should bring some calm and increased certainty to the markets,” said RFA president Bob Dinneen. The trade group opposes efforts to waive the renewable fuels standard in light of the drought.

production was forecast at 2.63bn bushels, down 2% from the USDA's August estimate and down 14% from last year.

Soybean yields were expected to average 35.3 bushels/acre, down by 0.8 bushel from last month and down 6.2 bushels from last year.

Compared with last month's estimates, soybean yield forecasts were lower or unchanged across the great plains and most of the corn belt as lingering drought conditions continued to hamper yield expectations.

The soybean area for harvest in the US was forecast at 74.6m acres, unchanged from August but up 1% from last year.

Commodity traders had mixed reactions to the new USDA crop estimates.

In early trading at the Chicago Mercantile Exchange Wednesday corn was trading lower while soybeans moved higher.

Additional reporting by Brian Ford

By: Frank Zaworski
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