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Source: USDA news release

The 2008 corn crop is projected at 11.7 billion bushels, down 390 million from last month based on lower expected yields, according to the latest USDA Supply and Demand report.

The national average yield is projected at 148.9 bushels per acre, 5 bushels below last month, and 6 bushels below the 1990-2007 trend. This month's reduction reflects slow planting progress, slow crop emergence, and persistent, heavy rainfall across the Corn Belt. The latest rounds of torrential rainfall are expected to reduce plant populations and nitrogen availability, particularly for corn planted after mid-May. Corn supplies for 2008/09 are projected 340 million bushels lower this month. Partly offsetting lower production is a 50-million-bushel increase in beginning stocks resulting from lower projected 2007/08 exports.

Feed and residual use for 2008/09 is projected 150 million bushels lower on reduced feeding demand with higher prices, increased wheat and sorghum feeding, and lower expected residual losses with the smaller crop. Exports were lowered 100 million bushels reflecting tighter U.S. supplies and increased export competition with higher foreign production.

Ending stocks for 2008/09 are projected at 673 million bushels, down 90 million from last month, and 760 million below the 2007/08 forecast. If realized, 2008/09 ending stocks would be the lowest since 1995/96. The 2008/09 marketing-year average farm price for corn is projected 30 cents higher on both ends of the range at $5.30 to $6.30 per bushel.

Global 2008/09 coarse grain production was lowered 3.1 million tons this month. The 9.9-million ton cut in U.S. corn production is only partly offset by increased corn production in China and the Philippines, and increased corn and barley production in Russia and Ukraine.

Foreign corn production is projected 7.6 million tons higher this month and 19.5 million tons above the current 2007/08 forecast. China corn production for 2008/09 is raised to 153.0 million tons, up 3.0 million from last month, reflecting a higher yield consistent with recently released 2007/08 estimates and 2006/07 revisions by China's National Bureau of Statistics. Production for China is raised 6.8 million tons for 2007/08 on a higher reported yield and raised 6.1 million tons for 2006/07 on an upward revision to area. Corn production for Russia and Ukraine are raised 1.5 million tons and 2.0 million tons, respectively, on higher indicated area.

Barley production is raised 0.5 million tons each for Russia and Ukraine on higher expected yields with continued good moisture for crop development during May. Brazil corn production for 2007/08 is raised 2 million tons reflecting above average rainfall and higher expected yields for second-crop corn.

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