Skip to comments.Corn Futures SURGE As USDA Cuts Crop Forecast By 12%
Posted on 07/11/2012 6:49:51 AM PDT by blam
Corn Futures SURGE As USDA Cuts Crop Forecast By 12%
Jul. 11, 2012, 8:38 AM
Corn prices are jumping after the USDA cut corn yield by 20 bushels per acre to 146 bushels per acre.
This is down from 166 bushels per acre because of poor crop conditions from early June and because of the heatwave and drought conditions plaguing the Midwest.
The corn crop forecast was cut 12 percent to 12.97 billion bushels. Corn futures are up 3.20 percent on the news.
From the report:
"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. Harvested area is also reduced slightly based on the June 29 Acreage report.
Reduced supplies and higher prices are expected to sharply lower 2012/13 corn usage with the biggest reduction for feed and residual disappearance, projected down 650 million bushels. Food, seed, and industrial use is also projected lower, down 105 million bushels, mostly reflecting a 100-million-bushel reduction in corn used to produce ethanol. Exports are projected 300 million bushels lower as tight supplies, higher prices, and strong competition from South American exporters limit U.S. shipments.
Wheat futures are up 2.36 percent after the USDA report showed that global wheat supplies for 2012 - 2013 period are projected to decline 5.1 million tons and with world production lowered 6.7 million tons with reductions for Russia, Kazakhstan, and China. Meanwhile, soybean futures are up 1.87 percent.
Here's a chart showing the dramatic spike in corn futures after the USDA release:
(Excerpt) Read more at businessinsider.com ...
We often forget it, but everything in our economy depends on the blessings of sunshine and rain. Neither is controlled by governments or economists.
The corn crops here are already devastated, some have disked theirs over and are replanting, but if it doesn’t rain that will be of no use.
Maybe we should stop subsidizing ethanol production from corn.
Fact is that Nebraska corn producers are paying an ethanol tax.
Thanks, but is the mandate of 10% ethanol is still in effect?
I think the mandate is a separate item & is probably unchanged.