Corn Estimate USDA s domestic corn crop estimate should be a relatively minor but slightly positive influence on corn prices from mid-October through early winter, also setting the stage for reduced corn LDPs and benefits from Marketing Loans. The nation s estimated corn production was increased a very small five million bushels from a year earlier, and carryover stocks are still expected to increase substantially in the year ahead. Projected carryover stocks at a 9.5 week supply next August 31 and absence of a mechanism to isolate excess supply from the market appear likely to hold prices near or below local CCC loan rates for much of the remaining harvest season. Reductions in USDA estimates of several foreign feed grain crops should set the stage for modestly higher cash corn prices during the spring planting season. The October production estimates were lowered slightly from a month earlier in the European Union, Eastern Europe, and the Former Soviet Union.
China remains a potential key influence on corn as well as soybean prices.
The USDA now projects China s 1998 corn crop to be up nearly 780 million bushels from last year s drought-reduced harvest. USDA analysts believe China s corn crop suffered very little damage from the August floods, in contrast to modest damage to soybeans, cotton, and rice. The October crop report points to a slightly less severe storage space shortage for the last part of the corn harvest than previously indicated. Farm Assistance Pending Congress is currently putting the finishing touches on a farm assistance package, but details are still sketchy. It appears that loan rates will not be increased.