The corn market found support at the tail end of July as dryness and heat entered into the Corn Belt and began to take a negative toll on the corn within the heart of the U.S. growing region. Crop ratings continued to deteriorate offering support to the corn market. On Aug. 12, the USDA released its most recent production estimates. The USDA projected the national corn crop at 10.064 billion bushels versus trader's estimates of 10.3-10.5 billion bushels. With a 1.009 billion bushel carryover from 2002-'03, this would place total corn supply at 11.084 billion bushels (a small amount of imports are in the total). As of Sept. 1, the 2003/04 demand is projected at 9.90 billion bushels leading to an ending inventory figure of 1.184 billion bushels. The USDA lowered the Food, Seed and Industrial sector by 25 million bushels from the July Supply/Demand report, now estimated at 5.475 billion bushels. The ethanol sector is expected to consume 1.100- 1.125 billion bushels next year. Currently the USDA has been utilizing approximately 85 million bushels per month. With beef, swine and poultry numbers on the increase, corn for feed demand is likely to increase next year.

With crop ratings the last week of August placed nationally at 50 percent good-to-excellent, corn prices continue to find strength and upward momentum. The USDA will release the next crop production report on Thursday, Sept. 11. The market will look to consolidate in anticipation of this report. EP