USDA's May Crop Production and World Supply and Demand Estimates (WASDE) reports contained both good news and bad news for producers.
The good news is that USDA predicts slightly larger-than-expected year-end stocks this fall and enough production this year to meet all needs and begin rebuilding grain stocks by the end of the 2011-12 crop year. The bad news is that, in spite of these projected sufficient supplies, prices will actually be higher this year.
The 2010/11 year-end stocks were raised in the May report from 675 to 730 million bu. Analysts were expecting that number to fall to 665 million bu., so this in itself has pushed old-crop corn prices lower. USDA made no changes to projected corn acres in this report, but recent flooding episodes and continued wet weather in North Dakota, the Eastern Cornbelt and the Delta will likely force a reduction at some point. That probably won’t occur until the June 30 Acreage Report, which is based on surveys of actual plantings.
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