The US Department of Agriculture (USDA) early on Friday is expected to show the projected 2008 US corn supply up about 50 percent from the past season since farmers produced a record-large 13.0 billion bushel plus corn crop, analysts said.
"I'm saying a reduction (from October's USDA forecast) but my yield number is still the second-largest in history. I'm bringing it down from last month but it's still a big crop," said Shawn McCambridge.
USDA at 8:30 am EST (1330 GMT) Friday will release its November crop report, and an average of analysts' estimates showed a record-large 13.273 billion bushel corn crop produced this year in the United States. The average of analysts' estimates was slightly below the USDA forecast in October for 13.318 billion bushels which was also down from the government's outlook the previous month.
An average of analysts' estimates for corn ending stocks in 2007/08 was 1.954 billion bushels, below the 1.997 billion USDA forecast in October but a huge 50 percent above the corn carryout of 1.3 billion bushels the past year.
Soaring demand for corn from the ethanol, export and livestock industries had been shrinking corn stocks and the surge to decade highs for corn prices early this year, ahead of the 2007 corn planting season, led farmers to plant the largest land area to corn since 1944. Those huge plantings, vastly improved corn genetics and satisfactory crop weather boosted US corn output this year to its record level.
Despite surging corn production, corn prices have remained well-supported, and only roughly 50 to 60 cents per bushel below the season's high and 11-year high of $4.37-1/4 set in early March.
"It's kind of interesting that the corn market has rallied ever since the USDA lowered their yield in the October crop report so you would have to think that we probably could rally a little more if they lower the yield again," said Steve Freed, analyst for ADM Investor Services.
Freed and other analysts said that the demand for corn from the energy or ethanol sector was slowing. But they saw a stable demand pattern from the livestock sector and a potential surge in export demand for corn as the dollar continues falling to record lows, scenarios that should keep corn prices firm despite the mounting supplies.
"Some people are as high as 2.5 billion (bushels) and 2.6 billion, so somebody is going to be out there talking about record corn exports," Freed said. Freed said the record high for US corn exports was 2.402 billion bushels in the 1979/80 marketing year.
In its October report, the USDA pegged US corn exports for the current 2007/08 season ending August 2008 at 2.350 billion bushels, up from 2.250 billion forecast in September. And corn earmarked for ethanol use was pegged at 3.2 billion, down 100 million bushels from September.
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