With the annual autumn rite of harvest well underway, the private analytical firm Informa Economics this week cut its forecasts for 2010 U.S. corn and soybean production.
Informa estimates U.S. growers will harvest 12.88 billion bushels corn this fall, well below its early September projections of 13 billion bushels. Informa trimmed nearly 400 million bushels from its 2010 soybean "guesstimate" and now pegs 2010 production at 3.41 billion bushels.
Estimates of reduced corn production have added fuel to an already hot corn market, and some experts believe soybean prices, will have to rise even further if that crop is to compete for acreage.
One thing's for sure though: tighter supplies, coupled with the effects of a looming acreage battle are contributing to an outlook that is decidedly bullish.
Corn prices have surged the past few weeks leaving farmers - and traders - cautiously optimistic about this year's harvest.
Late last week, the December futures contract surpassed $5 per bushel for the first time in two years; and this week prices flirted with $5.25.
In its September report, the Agriculture Department cut its estimates on U.S. Corn Production by 240 million bushels, and some private analysts predict an even greater decline.
Early harvest reports coming in from eastern and southern parts of the Corn Belt are mixed, but many growers say yields are disappointing.
Despite rallying more than 50 percent since late June, corn may not win a looming acreage battle next spring. That's because soybeans also are trading at levels not seen since 2008. Prices continue to hover around $11.00 per bushel despite USDA's forecast of record soybean production.
Wheat has retreated somewhat from its summer rally, but it continues to trade around $7.00 in Chicago. Nevertheless, a fast-paced corn harvest may actually open up more acres to winter wheat sowings.
The private analytical firm, Informa Economics estimates 2011 wheat plantings at 57 million acres, up nearly 5 percent from this year. Informa predicts U.S. growers will plant corn on 90.4 million acres next spring, reflecting a 3 percent increase, and the firm believes soybeans will be grown on an estimated 77.4 million acres in 2011, up nearly 2 percent. .