Corn was the center of attention following the government's latest crop updates, as the U.S. Department of Agriculture further trimmed its estimate for this year’s harvest in the wake of severe drought and said supplies of the grain at the end of next summer will be even lower than previously forecast.
The nation's farmers will harvest 10.71 billion bushels of corn, down 0.2% from a September estimate and down 13% from last year, according to the USDA's Crop Production report October 11. In the USDA's monthly Supply and Demand report, also released October 11, corn supplies at the end of the 2012-13 marketing year were reduced 16% to 619 million bushels, a 17-year low.
CME Group grain futures rose sharply after the release of the reports, with corn prices surging over 37 cents. There wasn’t really any surprise in the numbers, DTN Senior Analyst Darin Newsom wrote in a report. Still, "did the markets react like there was? Yes," he said.
The USDA hiked its estimate for the U.S. soybean crop by 8.7% from last month’s forecast, to 2.86 billion bushels, down 7.4% from 2011. The increase was larger than the estimates from many analysts, who on average expected a decline of 5.3% from the USDA's August forecast.