Tuesday, November 11, 2008
WASHINGTON - The Agriculture Department on Monday lowered its forecasts for this year's U.S. corn and soybean harvests, with corn production now expected to come in below analysts' estimates. USDA said corn production is expected to be 12.02 billion bushels, down from last month's revised estimate of 12.03 billion and below analysts' estimates of 12.08 billion. Corn yield per acre is expected to come in at 153.8 bushels, down from last month's estimate of 153.9.
The soybean harvest is forecast to be 2.92 billion bushels, down from 2.94 billion, according to the USDA's November report. The new projection matched analysts' estimates.
Soybean yield per acre is forecast to be 39.3 bushels, down from 39.5 last month.
The USDA lowered its estimate of the average price of corn for the year to a range of $4 to $4.80 per bushel, down from $4.25 to $5.25 per bushel last month. Increasing global supply and expected reductions in demand are likely to push feed corn prices down, the department said.
Corn and soybeans are used as animal feed by meat producing companies such as Tyson Foods Inc., Hormel Foods Corp. and Smithfield Foods Inc. Shares of those companies fell sharply late last month when the USDA reduced its estimates for corn and soybean production this year.
Despite the declines in projected harvests, this year's corn crop is still expected to be the second largest on record. The soybean crop is expected to be the fourth largest ever.
Monday's report comes as 86 percent of this year's soybeans, and 55 percent of the corn, have been harvested, the USDA said. That makes the projections more accurate than previous months.
The corn harvest is significantly behind its average pace, the USDA said, due to planting delays in the spring and cooler than average temperatures during the growing season.
The soybean harvest is forecast to be 2.92 billion bushels, down from 2.94 billion, according to the USDA's November report. The new projection matched analysts' estimates.
Soybean yield per acre is forecast to be 39.3 bushels, down from 39.5 last month.
The USDA lowered its estimate of the average price of corn for the year to a range of $4 to $4.80 per bushel, down from $4.25 to $5.25 per bushel last month. Increasing global supply and expected reductions in demand are likely to push feed corn prices down, the department said.
Corn and soybeans are used as animal feed by meat producing companies such as Tyson Foods Inc., Hormel Foods Corp. and Smithfield Foods Inc. Shares of those companies fell sharply late last month when the USDA reduced its estimates for corn and soybean production this year.
Despite the declines in projected harvests, this year's corn crop is still expected to be the second largest on record. The soybean crop is expected to be the fourth largest ever.
Monday's report comes as 86 percent of this year's soybeans, and 55 percent of the corn, have been harvested, the USDA said. That makes the projections more accurate than previous months.
The corn harvest is significantly behind its average pace, the USDA said, due to planting delays in the spring and cooler than average temperatures during the growing season.
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