NCGA President Says Latest Forecasts Call for Optimism (11-9-06)

Although today’s U.S. Department of Agriculture forecast shows a slightly lower level of corn production than previously, National Corn Growers Association (NCGA) President Ken McCauley points out the nation’s growers are still on target to turn out the third-largest corn crop ever and continue to supply growing demand.

Thursday morning’s forecast set the U.S. average corn yield at 151.2 bushels per acre, for a total of more than 10.7 billion bushels. Lower grain test weights and stalk problems and lodging in some areas were among the factors believed to contribute to the lower forecast.

“Despite some poor weather that reduced output in key states like Iowa, Illinois, Indiana and Nebraska, there’s plenty of corn to meet demand,” noted McCauley. “Even with these revised estimates, we’ll still have a corn stock-to-use ratio of about eight percent.”

On the demand side, both feed and residual uses, and exports were reduced by 50 million bushels to 6.05 billion and 2.2 billion, respectively. Ending stocks are projected to be 935 million bushels, down 61 million bushels from October. Ethanol demand remained unchanged from October at 2.15 billion bushels, which is a 500 million bushel increase from last year.

Corn prices have been strong and remain strong, McCauley said. “The right things are happening in the market to convince growers to plant more in 2007. We’ll continue to meet the needs of our feed, export and industrial markets.”

In overnight trading on the Chicago Board of Trade prior to the report’s release, corn futures rose. Cash prices fell at the opening of trading this morning.

To read the World Agricultural Supply and Demand Estimates click here.