June 9 (Bloomberg) -- The U.S. corn harvest may be 2.3 percent smaller than forecast in May as farmers reduced acreage because of excessive Midwest rains, the government said.
The crop will total a record 13.2 billion bushels, down from the month-ago projection of 13.505 billion, the U.S. Department of Agriculture said today in a report. The USDA cut its estimate of inventories before the 2012 harvest by 23 percent to 695 million bushels, from 900 million projected in May. The consensus estimate of analysts in a Bloomberg News survey was for a surplus of 781 million.
“It’s going to be a tight supply situation,” Dan Cekander, the director of grain research for Newedge USA LLC in Chicago, said before the report. “Now the market will be watching to see if higher prices slow demand, or for any signs of new weather problems” that may threaten yields, he said.
Inventories before the start of this year’s harvest were estimated at 730 million bushels, unchanged the May forecast. Analysts were expecting 706 million bushels.
Corn futures in Chicago have more than doubled in the past year after adverse weather reduced U.S. yields last year and demand for the grain to produce food, animal feed and ethanol increased. Yesterday, the most-active July contract rose 27.5 cents, or 3.7 percent, to $7.64 a bushel on the Chicago Board of Trade.
Corn is the biggest U.S. crop, valued at a record $66.7 billion in 2010. The U.S. is the world’s biggest producer and exporter.
Planted acreage was forecast at 90.7 million acres, down 1.6 percent from last month’s projection. In a survey released in late March, farmers indicated they planned to sow 92.178 million acres with corn this year.
The USDA forecast the yield from this year’s crop at 158.7 bushels per acre, unchanged from a month ago and up from 152.8 bushels last year.
--With assistance from Alan Bjerga in Washington. Editors: Daniel Enoch, Patrick McKiernan.
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