Corn: A Record Large Crop

The USDA's October forecast is for a record U.S. corn crop of 10.207 billion bushels.That forecast, along with September 1, 2003 inventories that were 77 million bushels larger than expected, projects to 2003-04 marketing year supplies of 11.3 billion bushels, 684 million bushels above the supplies of a year ago.Domestic use of corn during the 2003-04 marketing year is projected to increase by over 250 million bushels, led by increased ethanol production and a modest increase in livestock production.Exports are expected to increase about 275 million bushels from the low level of last year.Still, the large crop and a modest build-up in year ending stocks will keep corn prices at lower levels than in 2002-03, particularly in the first half of the marketing year.The USDA projects the marketing year average price of corn in a range of $1.90 to $2.30, compared to an average of $2.32 for the 2002-03 marketing year.Prices at harvest time are near the CCC loan rate in many areas.Some seasonal recovery in cash prices is expected after harvest.