Corn supply forecast drops unexpectedly

In the August WASDE report the USDA dropped corn yields from 156.5 to 154.4 bushels per acre despite pre-report forecasts of an increase. Look for the USDA to further reduce its current yield forecasts in this week’s WASDE report.

Crop ratings have suffered through a hot, dry August. Just 56 percent of the crop is in good-to-excellent condition compared with 63 percent a month ago.

Corn futures prices have swung wildly, with lows of $4.55 per bushel on Aug. 13, highs of $5.15 on Aug. 26 and closing Sept. 6 at $4.91.

In wheat, the U.S. spring harvest continues to advance, reported at 64 percent complete versus 93 percent last year and 69 percent for the five-year average. Wheat prices have been taking their direction from weaker corn prices and increasing world supplies. Wheat futures prices hit a low for the year at $6.27 per bushel on Sept. 5 before rebounding to $6.35 on Sept. 6.