September 14

9/14 – In Friday’s WASDE report, the USDA downgraded its corn output numbers due to drought in several growing areas and the “derecho” storm that hit Iowa with 100-mph winds. The USDA cut 2020/21 corn yield from 181.8 to 178.5 bushels per acre and dropped its forecast for corn production from 15.3B to 14.9B bushels. If realized, it would still be the 2nd largest corn crop on record. Adding in lower corn use for ethanol (due to decreased gasoline consumption) and larger exports, the net effect is a 9.1% projected drop in 2020/21 corn ending stocks from 2.75B to 2.50B bushels. Estimated 2020/21 world ending stocks were also cut by 3.3% from 317.4 to 306.8M metric tons. The changes were anticipated and priced into the market in recent weeks. Corn futures, which were $3.07 in early Aug, have rallied over the past month to close at $3.65 per bushel on Friday.