In this weekly Commodities Watch column, John T. Barone, president and commodities analyst for Market Vision Inc., offers a snapshot of the state of commodities for restaurants.
While analysts were hinting at corn yield below 150 bushels per acre (bpa), few expected the USDA to drop their forecast from 166 to 146 bpa in last week’s monthly World Agricultural Supply and Demand Estimates (WASDE) report. The USDA reduced projected corn output by 12.3 percent, from 4.79 billion to 12.97 billion bushels. And while some drought damage is already irreversible, the jury on corn output can’t come in with a verdict until after pollination.
The USDA raised its 2012/13 corn price forecast by 28 percent, from $4.60 to $5.90. Corn futures went up to $7.75 last week before settling back to $7.55 on Friday. Any further deterioration in crop conditions would send corn prices higher again this week.
The situation with wheat is not so bad — yet. The winter wheat crop from the Northern Plains and Pacific Northwest is still in very good condition and close to harvest. Spring wheat conditions are declining but still in much better shape than corn.
Contact John T. Barone at jbarone@mktvsn.com.
