The corn market could see a small pickup as the Agriculture Department has reduced its corn production estimates slightly in its latest report on agricultural supply and demand for the 2014-2015 marketing year, the American Farm Bureau Federation said today.
With corn and soybean production continuing to see high returns, even higher production estimates were expected from USDA today. Nonetheless, corn production estimates dropped a bit to 14.407 billion bushels from last month’s projection of 14.475 billion bushels.
“This is positive news for the market overall as we’re expecting demand to rise to meet these record yields,” AFBF Deputy Chief Economist John Anderson said. “An estimated increase in ethanol production should also help to absorb this year’s bumper crop.”
The drop in the national production estimate for corn seems to be coming from traditionally high-yield states that are now seeing lower estimates this month, Anderson said. The Iowa yield estimate was shaved by two bushels per acre, and Minnesota’s came down by five.
“These are not dramatic decreases but they are a bit surprising considering the overall boom we’ve been seeing,” Anderson said.
The soybean crop continues to come in as expected at a record high as the yield estimated was raised four-tenths of a bushel this month.