Beef Market Advisor

Sunday, August 14, 2005

Predictions For The 2005 Corn Crop

USDA's Monthly Crop Report, released on Friday, pre-
dicts corn and soybean crops quite close to most pre-report es-
timates. The 2005 corn crop is currently pegged at 10.35 billion bush-
els, 12% lower than last year's record crop of 11.7 billion bushels. The
driver is, of course, lower yields which are expected to decrease the na-
tional average yield to 139.2 bushels per acre, 21.2 bushels lower than
one year ago.

The predicted yield for this year is lower for every Corn
Belt state except Michigan and dramatically lower for several. The 2005
shortfall is predicted to be largest for Missouri (99 bu. vs. 162 last year)
and Illinois (125 vs. 180).

USDA'S World Agricultural Supply and Demand Estimates (WASDE)
was released Friday as well. Total corn availability for this crop year will
be 12.47 billion bushels (2.110 bil. bushel carryover plus this year's crop)
while usage will be 10.57 billion bu. That usage figure is 100 billion fewer
than last year with the entire reduction coming in the feed and residual category.

Lower fed cattle numbers will
have to account for much of this decrease since hog and broiler numbers
will almost certainly be higher next year. The projected 1.9 billion
bushel carryout for the `05-'06 crop year is still substantial and nearly
twice as large as two years ago when corn prices spiked upward. The
WASDE report raised its predicted farm price for the coming year only 10
cents per bushel. CBOT new-crop corn futures closed down 6-7.5 cents
per bushel on Friday.

BOTTOM LINE: Higher feed costs this coming crop year
but not enough higher to discourage growth of broiler output or
an expansion in the pork industry, nor to severely depress
feeder cattle prices.

Source: CME Daily Newsletter 14 Aug 2005.

posted by Dr. Harlan Hughes 7:11 PM [edit]

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