USDA cuts corn yield estimate by 20 bushels
Futures trade higher after report. We have comments from Jim Bower of Bower Trading on the impact of today's report.
Published: Jul 11, 2012
Drought in much of the Midwest is taking a sharp toll on corn and soybean yields, according to the U.S. Department of Agriculture, which on Wednesday cuts its forecasts for production this year.
The average corn yield this year, USDA said in its monthly supply and demand report, is now estimated to be 146 bushels per acre, down from the 166 bushels per acre it predicted a month ago.
And USDA cut its prediction for the average soybean yield to just 40.5 bushels per acre, down from 43.9 bushels per acre.
"Persistent and extreme June dryness across the central and eastern corn belt and extreme late June and early July heat from the central Plains to the Ohio River Valley have substantially lowered yield prospects across most of the major growing regions," USDA said.
With the cut in yields, farmers are now forecast to produce 12.97 billion bushels of corn this year. That's down from the record-breaking level of 14.79 billion bushels that USDA was predicting a month ago, but still more than the 12.358 billion bushels farmers produced last year.
Soybean production this year is now forecast at 3.05 billion bushels, about 5% lower than the 3.205 billion bushels USDA predicted in June.
And lower production will mean weaker exports, lower domestic stocks and reduced soymeal and soyoil production, USDA said.
"Soybean crush is projected at 1.61 billion bushels, down 35 million reflecting the impact of higher soybean meal prices on meal exports and domestic disappearance," the USDA said. "Soybean exports are for 2012-13 are reduced 115 million bushels to 1.37 billion, reflecting lower U.S. supplies."
USDA cut its forecast for corn exports in the 2012-13 marketing year by 300 million bushels to 1.6 billion bushels and also said less of the crop will be going to make ethanol.
The ethanol industry is now forecast to consume 4.9 billion bushels of corn, down from the June forecast of 5 billion.
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