The number of corn acres dropped by 1.9 million, which was offset by yield increasing to 160.4 bu. per acre, according to USDA’s November Crop Production report. While acres took a big hit, the corn crop is still set to be the biggest ever.
However, exports remain strong and will contribute to smaller-than-expected inventories. USDA increased its export projections by 14% to 1.4 billion bushels.
According to Bloomberg, Carsten Fritsch, an analyst at Commerzbank AG in Frankfurt, says corn prices "have virtually bottomed out." But Kevin Van Trump, Farm Direction market analyst, says that some traders still think the U.S. corn crop could grow by another 300- to 500-million bushels by the time USDA releases its year-end report in January.
"Keep in mind that the global corn picture looks increasingly burdensome and seems to be laying the needed foundation for a longer-term bearish price cycle," Van Trump explains. "With traders
thinking that the U.S. crop is only going to get bigger and world ending stocks of corn jumping higher by 12.9 million metric tons along with the stocks-to-use ratio also climbing above last year’s level, darker clouds could be on the horizon."