Harvest has wrapped up and yield reports have been better than expected. In the USDA’s October supply and demand report, the government increased yields to 168 bushels per acre, up from the first new crop yield report in May, which estimated 166.8 bushels per acre. Excessive rains in areas of the Corn Belt during May and June had analysts projecting yield cuts. As shown in the map, aside from the Eastern Corn Belt, most areas are projected to outperform last year’s yield numbers. Although yields are projected to drop substantially in Illinois, Indiana and Missouri year on year, recent estimates have shown slight rebounds and the departure from normal is not as extensive.

The October report placed corn production at 13.555 billion bushels, down from the previous report despite a yield increase. Demand for corn was unchanged with corn used for feed was pegged at 5.275 billion bushels; ethanol 5.350 billion bushels and exports 1.850 billion bushels. Last year, the above sectors consumed 5.317 billion bushels, 5.207 billion bushels and 1.864 billion bushels respectively.

Prices are finding support this fall, due to lack of movement by the producer. The crop will still be short in areas of the Eastern Corn Belt due to effects of the excess moisture and the shortfall will make the cash market a bit more volatile in the east when compared to the west.  The Eastern Corn Belt will be short again this year, as state stocks in these areas are tight again.  This will keep the cash market exuberant.

* Comments in this column are market commentary and are not to be construed as market advice.