Julius Schaaf, U.S. Grains Council at-large director, says he expects to harvest one of the best corn crops ever on his Randolph, Iowa, farm. Schaaf is not alone.
USDA’s World Agricultural Supply and Demand Estimates (WASDE) released Friday forecasts 13 billion bushels of corn, the second-largest crop in history, a record-setting yield and a 100-million-bushel increase in exports.
“We produce more on fewer acres,” Schaaf says. “It is because we deploy sound science when making our planting decisions. Because of biotechnology, we can meet all demands domestically and around the world.”
U.S. corn production is estimated 193 million bushels higher than last month’s report. USDA reported the national average yield is projected at a record 161.9 bushels per acre.
U.S. corn exports for 2009-10 were raised 100 million bushels due to higher projected imports for Canada and lower production in South America and China. Based on record July and August production of gasoline blends with ethanol, as reported by the Energy Information Agency, beginning stocks were lowered 25 million bushels, reflecting higher anticipated corn use for ethanol in 2008-09.
While the first blush of news in the latest crop report from the U.S. Department of Agriculture Friday morning was bearish, it wasn't a lost cause for bulls. Here's a further summary:
* As expected, the USDA boosted production estimates for corn and soybeans, based on record yield prospects, especially in the western Corn Belt. A 13 billion bushel corn crop is the second highest in history and the 3.25 billion bushel soybean crop is the biggest ever.
* But USDA supply/demand estimates also increased amounts for exports and usage from a month ago, leaving year-end carryover estimates almost unchanged.
* Estimates from some sources that look at what the final numbers will be in the January report suggest the size of the crops will be somewhat lower because of smaller acreage and lower yields than USDA is calculating. This will be a real test of estimating techniques.
* Bulls are running out of time to get help from an early freeze that might set back those yield prospects as the weather remains favorable for the crops to reach their potential, despite being late and behind schedule in much of the Corn Belt.
* Bottom line: Some pressure on prices to push December corn futures below $3 a bushel and November soybean futures below $9 a bushel.
Sorghum production for 2009-10 is forecast up 9 million bushels and beginning stocks projected down 10 million bushels based on a 10-million bushel increase in 2008-09 exports. Sorghum exports are projected to remain steady at 140 million bushels due to stable demand in Mexico.
Barley 2009-10 exports, although down from 2008-09, remain firm from the last report at 15 million bushels.
USGC President and CEO Ken Hobbie says the United States is more than capable of supplying the necessary feed grains both domestically and abroad.
“U.S. agricultural production will become increasingly vital to feeding a hungry world as U.S. export competitors’ production drops due to poor weather conditions,” Hobbie says.