In its July crop report – released Tuesday – USDA forecased higher corn stocks than what was forecast in the June report. The July World Agricultural Supply and Demand Estimates report projects corn stocks at 870-million bushels for the 2011-2012 marketing year – 175-million bushels more than the June estimate. American Farm Bureau Federation Crops Economist Todd Davis says the increase is due to USDA raising its harvested corn acreage estimate to 84.9-million acres – which should mean an additional 270-million bushels in corn production.
Davis says the supply situation is still very tight – with USDA’s stocks-to-use ratio at six-percent in the July report – which is only 24 days of supply. He says the tight situation means there’s no room for production problems this year. Davis says corn farmers have faced a lot of challenges this year and a lot can happen from now until harvest. He believes there’s a good chance the production and stocks estimates will come down in the August report.
Drought is clearly taking its toll on the cotton crop – Davis says – pointing out that USDA projects 30-percent of the crop will be abandoned this year.