Corn harvest not as “apocalyptic” as feared
Many U.S. corn farmers are generating yields better than the government projected last month, signaling this year’s harvest results won’t be as dire as once feared following a Midwest summer heat wave, according to Chicago-based futures broker Linn Group, Inc.
Corn yields will average an estimated 148.9 bushels an acre nationwide, Linn Group said in an Oct. 6 report. That forecast is higher than the 148.1 bushels an acre average the U.S. Department of Agriculture estimated in a September report.
Linn Group is among several brokerages and advisors that released updated corn and soybean production outlooks this week ahead of the USDA’s next Crop Production report, scheduled for Oct. 12. The USDA will also release its monthly Supply and Demand updates the same day.
At least four advisors, including Linn Group, expect corn yields to be higher than the USDA projected in September after early harvest results in some parts of the Midwest produced stronger than expected crops. Corn futures soared near all-time highs above $7 a bushel over the summer amid fears extreme heat caused widespread damage, but prices plunged over the past month.
“The harvest reports we've been hearing have been mighty mixed, although clearly not as apocalyptic overall as the panic in the markets a month or so ago would indicate,” Linn Group analyst Jerrod Kitt said in an e-mail.
Nationwide corn yields around Linn Group’s estimate would still be down 2.6 percent from last year’s average and also be the lowest since 2005, according to USDA data. While Linn Group boosted its yield forecast, it cut its corn production forecast to 12.37 billion bushels, down 1 percent from the USDA’s September figure, because of lower harvested acreage.
“We believe the most important thing in this report will be acreage,” Kitt said. “Our estimates imply a sizable reduction in harvested acres. If the USDA matches our thought process and arrives near our production levels… it would certainly provide a positive report day reaction in the markets.”
Corn futures in Chicago have declined in five of the past six weeks and are down 24 percent from a record $7.99 ¾ a bushel in June. In trading Oct. 6, December corn futures ended unchanged at $6.05 ½. On Oct. 4, December futures dropped to $5.87 ¾, the contract’s lowest closing price since mid-March.
In its Crop Production report released Sept. 12, the USDA estimated the corn harvest at 12.5 billion bushels and harvested area 84.4 million acres. In 2010, the U.S. crop totaled 12.47 billion bushels on 81.4 million harvested acres.