US corn forecasts sharply cut
THE US Department of Agriculture sharply reduced forecasts for the US corn harvest by more than 4%, from its July estimate of 9.7 billion bushels to 9.28bn bushels – prompting a price surge.
Analysts say the downward forecast could have a knock-on effect on livestock markets.
The new estimate would still leave production levels at the fourth highest on record. September corn futures jumped 12% to $2.61 on the Chicago Board of Trade. The December contract gained a similar amount to $2.65.
Economists are divided as to whether the corn harvest will recover or be damaged further by drought. Key corn growing areas have seen rain following dry weather in July.
Meanwhile, the soya-bean crop is now estimated at 2.74bn bushels, up from a previous forecast of 2.69bn bushels. Weather conditions will remain crucial. The wheat harvest forecast is up from 2.43bn bushels to 2.53bn bushels.