More corn in US 2007-08 season

In a survey of 24 analysts conducted by Dow Jones Newswires, the average
estimate for corn production was 13.459 billion bushels, 151 million bushels
above the 13.308 billion forecast in September by the USDA.

The average
bushel per acre yield was 157.7 bushels per acre, up 1.9 bushels from the USDA’s
September estimate.

Corn production and yields appear to be stronger
based on the increased use of genetically modified seeds, which helped the crop
despite a drier year.

A slowdown in domestic demand – led by less corn
used for ethanol and animal feed – and the increase in production is behind the
bump up in ending stocks, analysts said.

The slowdown in corn noted in
the quarterly stocks report was probably due to a reduction in feed usage. The
increased use of distillers grains in livestock feed contributed to the
reduction in corn as feed, analysts said.

It is expected that foreign
demand for US corn will increase, offsetting some of the decline in domestic
consumption.

China trade impact
While world corn production is
expected to grow based on the expected gain in US production, market
participants will be looking for information regarding China’s 2007-08 corn
production.

Last week, the US Grains Council estimated China’s corn crop
at 139 million metric tonnes compared to the 147 million tonnes the USDA
projected in September due to drought stress and heat experienced in the growing
season.