The corn market continued to charge higher yesterday, and ranchers are more and more concerned about the impact on Calf Prices and feedlot profitability.
Corn future shot up another 8 cents yesterday, to the highest price in almost two years!
Well, this morning’s report came in right where traders expected, as the USDA lowered the size of the crop and the bushels per acre, so the futures for Friday morning are 5’6 higher to 462’0 for September, while December’s numbers are 4’0 higher at 474’6.
Today’s report says:
- Total Corn Production: Lowered to 13.16 bil bushels,
- Down from last year’s record of 13.2 bil bu
- The yield is projected at 162.5 bu/acre
- Down from last year’s record of 165.2bu/acre
One problem is that the supply of corn is down. The U.S. corn stocks-to-use ratio will drop to the lowest level in 15 years in 2010/11 due to high corn demand. The ratio would be 8.3 percent, equal to a 4-1/2-week supply. The projected carryover of 1.116 billion bushels would be the smallest since 2003/04.
Even though the USDA issued a modest reduction in yield at 162 bushels, many traders will likely disregard it, chalking it up to what is often a conservative USDA approach to changing yields. Farmers have been reluctant to sell recently and are counting on the markets going higher.
Forecasts for expanding wet weather in the U.S. Midwest are beginning to lead to concerns about delayed harvest of corn and soybean crops. Both crops, especially corn, matured early this year due to plantings and hot weather in August.
U.S. farmers produced the largest corn and soybean crops on record in 2009, according to the Crop Production 2009 Summary released today by the U.S. Department of Agriculture’s National Agricultural Statistics Service (NASS).
Corn production is 13.2 billion bushels, 1 percent above the previous record of 13 billion bushels set in 2007, and 9 percent higher than 2008. Corn yields reached an all-time high in 2009 at 165.2 bushels per acre, eclipsing the previous record of 160.3 bushels per acre set in 2004. Planted area, at 86.5 million acres, is the second highest since 1949, behind 2007’s 93.5 million acres.
Posted by Kaci Switzer