By Victor Santiago, Farms.com
The 2013 U.S. corn harvest is expected to be the biggest ever, with a jump of 30 percent from last year. 27 analyst studies compiled by Bloomberg estimate the crop will measure out to 356.5 million metric tons or 14.036 billion bushels. This is 86 million bushels above the government’s July forecast. With the U.S. being the largest corn supplier, global stockpiles are poised to reach 13 year records.
The U.S. is not alone in recording record corn crops; Brazil and the Ukraine are also forecasting record yields. The record supply of corn has created a bear market for the commodity, with large investment banks such as Goldman Sachs cutting their price forecasts. Diana Klemme, a VP at Grain Service Corn, states “it is possible to see sub $4 corn, a price last seen in 2010”. Futures have already hit a 34 month low, falling 34 percent to $4.62 on the Chicago Board of Trade this year alone.
Lower corn prices are already having an effect on meat processors, most notably Tyson Foods Inc, whose Q3 profit more than tripled. The downward pressure on feed prices will help stabilize meat prices that have been approaching near record levels. Weather, as well as the most acres planted since 1936 are seen as the key reasons behind the record level corn crop.