USDA Cuts Corn Yields, Traders React Positively

The USDA's September World Agricultural Supply and Demand Estimates report has sparked reactions from traders and analysts. The agency cut corn yields from 180.7 bushels per acre in August to 178.5 bpa, which is just above the average trade guess of 178.2 bpa.

This reduction was expected, given the hot and dry conditions that have plagued late summer crops. However, some analysts argue that the agency should have cut yields even deeper. The production estimates for corn also decreased by 213 million bushels to 15.8 billion bushels.

On the demand side, feed and residual use was lowered by 150 million bushels to 6 million bushels, while exports held steady at 3.3 billion bushels. Ending stocks fell by 86 million bushels to 1.567 billion bushels, which is lower than trade estimates of 1.528 billion bushels.

The season-average farm price for corn was raised by 30 cents per bushel to $4.80.