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USDA raises corn yield estimate, pressures grain markets

A market analyst says the USDA surprised grain traders with its corn yield increase in its October supply and demand report.

Don Roose says the U.S. corn yield increased 2.7 bushels per acre from last month, now at an average 181.2 bushels per acre, and made some demand adjustments.

“When you cut to the chase of it, we’re now carrying adequate supplies: 1.845 billion. If there’s anything from a stability standpoint, the government only took the yield down on corn 10 cents per bushel. We’ll see if that’s at a value level.”

Roose says the corn markets responded lower to report, and farmers might be rewarded for storing corn at harvest.

“We still have a market over $5 in July corn, and if you have on-farm storage for corn, you’ll probably get rewarded this year to carry corn and get a return on investment.”

He says following the October supply and demand report, grain markets will shift their attention to finding a price floor, but it’s too soon to know whether corn has hit its harvest low.