USDA Sees Larger 2009 Corn Production Due To Stronger Yields

U.S. corn production in 2009 will be stronger than previously because farmers
are getting better yields, the U.S. Department of Agriculture said Friday.

“U.S. corn production is forecast [at 12.954 billion] bushels, 193 million higher
than in August, with higher expected yields throughout most of the corn belt,” the
USDA said in the September edition of the World Agriculture Supply and Demand
Estimates report.

The new forecast for the national corn yield average is 161.9 bushels per acre,
an increase from 159.5 bushels per acre that the USDA predicted in August.
“If realized, this will be the highest yield on record and production will be the
second largest, behind 2007,” the USDA said a crop production report also released
Friday. “Yield forecasts increased from last month across the western corn belt and
the northern half of the Great Plains as mild temperatures and adequate soil moisture
supplies provided favorable growing conditions.”

The USDA raised its 2009-10 marketing year forecast for corn ending stocks to
1.635 billion bushels, up from last month’s prediction of 1.621 billion bushels. But
2009-10 beginning stocks - the corn left over from the old 2008-09 marketing year
- was lowered because a lot more corn than expected went into ethanol.
“Beginning stocks [for 2009-10] are lowered 25 million bushels reflecting higher
expected corn use for ethanol in 2008-09 based on record July and August production
of gasoline blends with ethanol as reported by the Energy Information
Agency,” the USDA said.

The new forecast for corn use in ethanol for the 2008-09 marketing year is 3.675
billion bushels, up from last month’s prediction of 3.65 billion bushels. The forecast
for corn use in ethanol in 2009-10 is unchanged at 4.2 billion bushels.

Source: CME Group