Corn Estimate: Too High?

Avatar for Matt Hopkins By Andrea Klosterman Harris|30 August 2007

Record stalk counts may have created an overestimate of US corn yield for the season. USDA’s projected average of 13.1 billion bushels, based on an estimate of 152.8 bushels per acre, may have been too optimistic. Based on a new average projection of 149 or 150 bushels per acre, Northland Commodities, LLC’s Al Kluis foresees a revised projection of 12.7 to 12.8 billion bushels. Speaking at USDA’s Aug. 10 Minneapolis Grain Exchange press briefing on supply and demand estimates, Kluis attributed the decline to conditions as of Aug. 1, such as a 375-drop in the Dow on August 9. ”If the information were gathered today, we would not see the same potential for corn,” said Kluis, who also declared that corn ending stocks are still up by about .37 billion bushels from 2006/07. He sees other positives for the corn crop as well: “Projected corn usage is better than expected as USDA increased exports and ethanol use. A lower dollar value is part of the reason for the higher exports,” Kluis said. “We’re probably the cheapest source of wheat and corn in the world. So people will be turning to the United States. Longer term, we’ll see a lot of competition for acreage and higher prices. But we haven’t seen any price rationing kick in.”