Corn Yields Drop-Demand Up
Chicago--Just when feeders thought they'd seen the worst feed prices in decades, forecasters have cut U.S. corn yields by a historic 11 bushels per acre since September. This week analysts shaved another 1.5 bushels per acre off the U.S. average corn yield.
U.S. ending stocks are down 51 percent from last year but corn demand remains strong because of ethanol. Ethanol production is up by 5 percent this year, after gaining 160 percent over the past five years. This is the third straight year that global corn consumption has outpaced production.
The USDA raised the 2010-11 marketing-year average farm price projection by 10 cents on both ends of the range to $4.90 to $5.70 per bushel as cash and futures prices are expected to strengthen. Heavy early season marketings of corn priced well below current cash price levels are expected to limit the upside potential for the weighted average price received by producers. However, stronger futures prices could entice growers to plant more corn acres this spring.