The projection for 2009/10 corn production was increased 3 percent from last month as a result of increased plantings. Producers increased plantings 2 million acres from their March intentions to 87 million acres, up from 86 million in 2008. Harvested area increased 2.3 million acres this month to 80.1 million acres. The largest increase was recorded in Nebraska where growers planted 600,000 more acres of corn than last year. Other notable increases were shown in Iowa, up 400,000 acres; Missouri, up 300,000 acres; and South Dakota, up 250,000 acres from a year ago.
The largest year-to-year decline occurred in North Dakota where corn planted acreage is down 650,000 acres. The national average yield projection remains unchanged from last month at 153.4 bushels per acre, down slightly from 153.9 bushels per acre in 2008/09. As of July 5, 71 percent of the corn crop was rated in good to excellent condition, up from 62 percent last year.
Projected corn use for 2009/10 is up 65 million bushels this month to 12.525 billion bushels. Feed and residual use was increased 50 million bushels to 5.2 billion this month, as lower corn prices and greater supplies help boost feed demand for 2009/10. Food, seed, and industrial (FSI) use of corn in 2009/10 is expected to total 5.375 billion bushels, down 35 million bushels from last month and representing 43 percent of total use. FSI use in 2009/10 is expected to decrease from last month as high fructose corn syrup, glucose and dextrose, and starch production are all projected lower as continued weakness in the economy limits demand for these products. Corn use projections for beverage and manufacturing, as well as, cereal and other products are unchanged from last month. Expected corn use for ethanol also remains unchanged this month. Exports for 2009/10 were increased by 50 million bushels to 1.95 billion bushels, as lower prices make U.S. corn supplies more favorable on the world market. As a result, 2009/10 ending stocks were projected 460 million bushels higher at 1.55 billion.
For 2008/09 projected corn use is down 170 million bushels from last month to 12.0 million bushels. Feed and residual is lowered 100 million bushels from last month to reflect lower-than-expected third-quarter (March-May) disappearance as indicated in the June 30 Grain Stocks report. FSI use is lowered 120 million bushels this month, which is mainly attributable to a 100-million-bushel decrease in corn used for ethanol production. The decline in corn prices have boosted ethanol producer margins. However, reduced production of gasoline blends with ethanol in May and June, based on the most recent weekly data, indicate lower-than-expected ethanol corn use. Exports were raised 50 million bushels based on recent increases in shipments and the high level of outstanding sales for the 2008/09 marketing year.
With 2009/10 ending stocks projected sharply higher this month, prices are projected lower. The marketing-year average farm price for 2009/10 is projected at $3.35 to $4.15 per bushel, down 55 cents on both ends of the range. The 2008/09 marketing-year average price is expected to be $3.95 to $4.15 per bushel, down from a record $4.20 per bushel in 2007/08.