US corn price drops dramatically

The price of corn in the US has dropped as stocks and yield have both been estimated up. At close of business on Monday, August 12, Chicago Board of Trade (CBOT) main-season corn stood at 385.25c/bu – down 25c/bu on the Friday evening price.

Low corn prices impacted heavily on Irish tillage farm incomes last season. High stock are one reason for the drop.

World stocks

The United States Department of Agriculture (USDA) released its World Agricultural Supply and Demand Estimates (WASDE) report on Monday, August 12.

The report stated that the outlook was for larger corn supplies, reduced exports and the reduced use of corn for ethanol, as well as greater ending stocks.

The corn production forecast has also increased. The USDA estimates that corn production will hit 13.6 billion bushels; that’s up 26 million bushels on the July estimate and equates to approximately 565,000t.

This increase in production is thought to be as a result of expected higher yields. The USDA’s first survey-based corn yield forecast for the season shows corn yield at 169.5bu/ac – 3.5bu higher than last month’s projection.

Corn for ethanol production is reported to be reduced by 25 million bushels to 5.5 billion bushels.

Yield down in major producing regions, but up in others

Yield is forecast to be down on 2018 in the major corn producing states of Illinois, Indiana, Iowa, Minnesota, Nebraska, Ohio and South Dakota. Missouri is the only major producer which has a predicted yield increase.

However, an increase in yield has been forecast in many other states.

Competition

The report also stated that US corn exports have lowered due to increasing competition from Argentina, Brazil and Ukraine.

According to the WASDE report, Ukraine corn production is expected to reach record highs due to increased yield and area. EU corn production is also expected to be higher.