Corn forecast drops but still at record high

In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.

In last week’s WASDE report, the USDA dropped corn yields from 156.5 to 154.4 bushels per acre (bpa), surprising analysts whose consensus, pre-report forecast was for an increase to 157.7 bpa. The USDA reduced 2013-2014 corn output to 13.76 billion bushels, but that is still a record-large crop and 28 percent above last year’s crop. Year-end stocks for 2013-2014 are projected at 1.837 billion bushels, putting the stocks-to-use ratio at an eight-year high of 14.5 percent.

Corn futures prices swung wildly last week, with a low of $4.55 on Tuesday, a high of $4.88 on Thursday and a weekly finish close to where it started at $4.73. It’s still a weather market. So far, below-normal Midwest temps have limited crop damage due to lack of moisture. Depending on what happens in the next month, we could still get a $4.25 crop or a $5.50 crop. But either way, it’s a dramatic improvement over last’s year’s $6.95 crop.

Contact John T. Barone at [email protected].

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