Is August Weather Taking Corn Prices Up?
The more recent strength in corn prices is related to concerns that the U.S. average yield may fall short of the USDA’s August 12 forecast of 165 bushels, says Darrel Good, University of Illinois economist. “Very early yield reports in the Midwest have been described as disappointing,” Good says. “It’s a little dangerous to base expectations on early results since driest areas tend to get harvested first. In addition, it is yield relative to the USDA forecast, not a third party expectation, that is important.” Good says with year-ending stocks already projected to be less than 10% of projected consumption, a lower average yield would point to very tight stocks. Under the strong-demand scenario currently being experienced, higher prices would be required to force a substantial reduction in consumption. With use projected at 13.49 billion bushels, Good says a U.S. average yield less than 161.2 bushels would project to year-ending stocks of less than 1 billion bushels. The USDA will issue
