The USDA released supply and demand figures on Tuesday outlining significantly lower corn production this year as farmers struggle to get the crop in the ground. The report cut the corn yield estimate by 5 bushels per acre because delayed planting and emergence will likely hurt production, as would loss of nitrogen from heavy rains.
"The report confirms what observers have known for the past couple of weeks," says Terry Francl, senior economist with the American Farm Bureau Federation.
The planted acreage estimate remained unchanged at 86 million acres, something that is likely to change on June 30 when USDA releases its producer survey of crop acres. Monday's weekly crop progress report indicated that more than 2.5 million acres remain unplanted as of Sunday, with more rains falling in the areas needing to plant. Roughly 1.3 million of those acres stretch from Missouri to Indiana, with more corn that needs to be replanted in these and other key production states.
USDA did not change soybean yield or production estimates, although it still remains neutral to bullish for soybeans. The wheat report was slightly bearish, as prices continue to drop. For the U.S., 2008/09 wheat supplies are projected higher on higher production and increased carryout. Beginning stocks are projected to be 15 million bushels, as 2007/08 exports are lowered the same amount. Global wheat production was raised 6.9 million tons. Global wheat imports, exports, and consumption were all raised with increased supplies.