US on track to deliver second biggest ever corn crop

The US is on track to deliver the country’s second biggest ever corn crop, according to numbers from the US department of agriculture and reported on ICIS news.

(Disclosure: I work for ICIS: About ICIS)

My pal William Lemos’ report says:

The USDA said in its monthly report itexpects 12.07bn bushels of corn in the 2008/09 crop year. Thatprojection compares with a crop of 13.1bn bushels in 2007/08, therecord harvest by US farmers.

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.

That’s around 34% of the crop to make ethanol, and by my calaculation that will reduce the amount of corn or corn products like distillers grains available for food use by around 2.7 bn bushels, taking the effective crop level closer to 10bn bushels.

I don’t know what the long term effect that will have on the price of corn, but on Friday last week, when William wrote his story, he tells us

The USDA raised its 2008/09 average cornprice 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 bythe USDA averaged $4.25/bushel in 2007/08.

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