CME Foresees Record Crop Production This Year
USAgNet - 05/10/2012
On Thursday, the USDA will release its latest production estimates for U.S. and world agricultural commodities. The situation in the corn market remains particularly fluid, with the market still in a demand rationing mode for old crop corn. July corn futures in overnight trading were $6.2725/bu., a premium of
$1.02/bu. over December futures, according to CME.
Old corn crop stocks remain tight and some market participants are pegging ending stocks for 2011-12 as low as 660 million bu. Strong export sales and higher feed use will likely continue to pressure old corn crop prices into July and maintain the premiums to Dec corn.
As for the new crop, there is broad expectation that farmers will likely produce the largest corn crop on record, enough to bring carryover stocks to more normal levels.
The commodity group says USDA will publish its first estimate of U.S. corn supplies for 2012/13, an estimate based on the expectation that planted acres will be over 96 million bushels per acre and that yields will recover from two dismal years and be close to the 164 bu./acre trend yield for 1990-2010. This is
basically the scenario outlined by USDA in their February outlook report and there has been little in recent months that could change this view.
Farmers have been able to get the crop in the ground early and so far planting progress is running well ahead of both year ago and the five year average pace.
The latest USDA crop progress report indicated that as of May 6 US farmers had planted over 71% of the corn crop. For the same week last year farmers had planted just 40% of the crop and the five year average pace is at 47%.