WASDE: Corn production numbers reduced

By Susanne Retka Schill | November 03, 2008
Web exclusive posted Nov. 11 2008 at 3:44 p.m. CST

As the U.S. corn harvest nears completion, the USDA's Nov. 10 World Agricultural Supply and Demand Estimates report lowered its corn production forecasts. However, with exports expected to slow, as well, the USDA raised ending stocks by 36 million bushels compared with its revised forecast from last month. The November crop production report lowers corn production by 13 million bushels and corn exports are lowered 50 million bushels. Declines in futures and cash prices continue to undermine prospects for the 2008-'09 season-average prices received by producers, according to the report. The projection for the season-average farm price was reduced to $4 to $4.80 per bushel, down on each end of the range from the previous forecast of $4.25 to $5.25 per bushel. Rising world feed grain supplies and reduced prospects for global feeding are also expected to pressure U.S. feed grain prices.

Corn supply and use estimates for 2007-'08, the crop marketing year just ended, are revised this month. Import projections are raised 2 million bushels and exports were increased 1 million bushels based on August trade data from the U.S. Census Bureau. Feed and residual use was lowered 25 million bushels. Ethanol corn use was raised 26 million bushels on higher-than-expected August ethanol production reported by the U.S. Energy Information Administration. The estimated 2007-'08 corn usage for ethanol is 3.02 billion bushels. USDA estimates corn use for ethanol at 4 billion bushels for 2008-'09.

Like corn, the USDA is adjusting sorghum estimates down, reducing its 2008-'09 projections by 7 million bushels lower to 465 million. The season-average farm price is projected at $3.40 to $4.20 per bushel, down from $3.70 to $4.70 per bushel. In comparison, the 2007-'08 final production numbers for sorghum was estimated at 505 million bushels. Last year's crop was higher even though fewer acres were planted. The USDA shows 8.3 million acres were planted this spring, as compared to 7.7 million acres in spring 2007. Yields this fall are estimated at 63 bushels per acre compared with 74.2 bushels per acre for last year.

Globally, coarse feed grain supplies are projected 5.6 million tons higher this month with beginning stocks raised 4.1 million tons and production increased 1.5 million tons. Much of the increase in beginning stocks reflects reduced 2007-08 corn feed use and exports for Brazil. Most of the increase in production is from higher 2008-09 coarse grain production in the European Union and former Soviet Union states.