Projection for US corn prices takes a downturn

The USDA reduced its estimates for corn prices this month as US feed grain export prospects declined with plentiful world supplies.

Corn exports were lowered because of larger southern hemisphere crops. Increased global corn production is boosting projected ending stocks, especially in major corn-exporting countries.

US feed grain supplies for 2009-10 are decreased 628,000 tonnes this month to 398.9 million, up from 373.7 million for 2008-09, as barley imports and corn production were lowered. Total use of the four feed grains is projected 2.5 million tonnes lower at 348.6 million this month due to lower corn exports. US feed grain exports for 2009-10 are lowered 2.5 million tonnes to 52.2 million. The decrease in total use raises ending stocks 1.9 million tonnes to 50.3 million. In 2008-09, ending stocks for the four feed grains totalled 47.0 million tonnes.

Total 2009-10 corn use is decreased 100 million bushels to 13.0 billion bushels this month due to a decrease in exports. Feed and residual and food, seed, and industrial use, including ethanol, are unchanged. Exports are lowered 100 million bushels to 1.9 billion, as a result of the increased availability of foreign corn supplies, particularly in Argentina. Ending stocks for 2009-10 are projected up this month to 1.799 billion bushels, from 1.719 billion last month.

Prices received by farmers for corn are expected to average US$3.45-US$3.75 per bushel, down from US$3.45-US$3.95 last month as increased export competition lowers price prospects during the remainder of the 2009-10 marketing year. Average prices received by farmers have been higher than the quoted market price as many farmers were able to lock in higher prices for their 2009-crop corn. Farmers typically price a portion of their production before harvest, sometimes even before planting, if prices are attractive.