Corn Price Prospects Down with Bigger Crop on the Horizon

In its new crop production forecast for corn, USDA has projected a crop that would be actually up slightly from what was being forecast a month ago.

But that’s not the direction folks were necessarily anticipating.

USDA is Chief Economist Seth Meyer. Most analysts were looking for USDA to forecast less production than the 15 point 1 billion bushel crop that was projected. USDA did bring down at yield a forecast by 1.3 bushels an acre that was not a surprise.

The surprising part was the additional acreage that NASS got through with additional survey here and through FSA data.

USDA found 1% more planted acres than was being projected a month ago, taking corn acreage to 94.9 million acres. So you had increases in acreage more than offset the downward adjustment that was expected in yield. So the overall result compared to last year:

We do have a big bump in production relative to last year.

USDA outlook Chairman Mark Jekanowski he says the expected 15 point 1 billion bushel corn crop would be 10% more than this last season and the second biggest crop ever. Mark says this will also of course bump up the numbers for exports which are now expected to top last year by up to 23% at just over 2 billion bushels. Mark says those exports though could be under some pressure. Because of this development.

We raised Brazil’s corn production forecasts now at a new record 137 million ton crop, and that’s a crop where harvest is kind of winding down, so it is still on the global market and you know, we’ll potentially be competing with some of our supplies as they come off the field.

Meanwhile, Mark says expected year-over-year increases in exports and other uses of corn from the big supply won’t be enough to counter the increased supplies of corn. So by the end of this next marketing year, corn stocks could grow from about one and a half billion bushels this year to 2.2 billion in the next year with the expected effects on prices. USDA projecting that the corn crop about to be harvested will bring a season average price of $4.90 a bushe,l down $1.70 from this past season 25% Drop.