Different method led to shocking cut to U.S. corn forecast
Food companies and ethanol producers are betting a bumper harvest will replenish corn supplies, which are expected to drop to a 17-year low by the end of the month.
"When the number hit the screen this morning, I was shocked," Peter Meyer, senior director for PIRA Energy, said about the reduced corn yield.
Deutsche Bank, in a note, agreed the change was a "shocker" and reviewed USDA comments about weather to find an explanation. The bank kept its harvest forecast unchanged at 160.8 bushels an acre, despite the USDA's adjustment.
Arlan Suderman, senior market analyst for Water Street Solutions, said he too was expecting a bigger crop than the USDA projected. He pegged the yield at 158 bushels per acre and said he would continue to digest USDA's latest survey-based outlook.
"This is the starting point," he said on Monday about the USDA's report. "I still put this one with a little bit of an asterisk beside it, because the crop was so immature when they were out there."
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