WASDE reduces corn acreage projections

By Susanne Retka Schill | October 06, 2008
Web exclusive posted Oct. 29, 2008 at 10:39 a.m. CST

On Oct. 28, the USDA corrected its Oct. 10 World Agricultural Supply and Demand Estimate figures, lowering both corn and soybean estimates.

Corn planting and harvested areas for 2008-'09 were reduced by 1 million acres, with corn production forecasted at 12.03 billion bushels, down 167 million bushels from the Oct. 10 forecast. As a result of changes in acres, there were changes in several projections. Feed and residual use is projected 50 million bushels lower at 5.3 billion with the smaller crop and higher expected sorghum feeding. Corn exports are projected 50 million bushels lower at 1.95 billion on tighter supplies. Ending stocks are projected at 1.08 billion bushels, down 66 million from the previous forecast. The season-average farm price range is raised five cents on each end of the range to between $4.25 and $5.25 per bushel.

Similarly, the U.S. soybean acreage was reduced by 1.1 million acres. Soybean production is forecasted at 2.94 billion bushels, down 45 million from the Oct. 10 forecast. Soybean exports are projected 30 million bushels lower at 1.02 billion bushels reflecting reduced supplies and higher prices. Soybean crush is unchanged and as a result the soybean meal and soybean oil balance sheets are unchanged. Ending stocks are projected at 205 million bushels, down 15 million from the Oct. 10 forecast. The U.S. season-average soybean price range is projected at $9.70 to $11.20, up 10 cents on both ends of the range.

Corn and soybean prices were up sharply at the start of morning trading on the Chicago Board of Trade on Oct. 28th. However, the initial gains were lost later in the day. As harvest pressure lets up and the financial crisis influence wanes, the grain markets are expected to recover from the financial-crisis-led plummet that occurred in October, and follow the more traditional market drivers in fundamental supply and demand.