April 9, 2008

 

US grain exports to surge despite record prices

 

 

Global demand for US corn, soy and wheat will swell despite skyrocketing prices; while pork and poultry production will be constrained by high feed costs, the USDA said Wednesday.

 

The USDA boosted its forecast for corn, soy and wheat exports by 50 million bushels each in a monthly report on US crop output and use.

 

Average price of corn at the farm gate was pegged at US$4.30 per bushel. Soy was projected to cost around US$10.25 at the farm gate, supported by brisk sales to China.

 

The corn price estimate was raised by 30 cents while soy was down 15 cents from the previous USDA forecast.

 

The USDA report increases the necessity to plant every corn acre that is intended, and then some, for next year, Shawn McCambridge, an analyst for Prudential Financial pointed.

 

US farmers expressed intentions to plant 86 million acres of corn in 2008, enough for a crop of 12.2 billion bushels, down sharply from 2007's record but still the second largest on record.

 

Meanwhile, high corn prices will limit hog weights and affect broiler chickens' growth later in the year, the USDA said.

 

Pork output was forecast to rise from 2007 to 23.55 billion pounds, and broiler production would total 36.5 billion pounds, a smaller increase from 2007 than forecast last month.

 

Furthermore, the USDA said that around 3.1 billion bushels of corn will be used to make ethanol, lower by 100 million bushels from an earlier estimate.

 

Livestock feeders will use 6.15 billion bushels of corn in 2007/08, up 200 million bushels.

 

The USDA report was released a day after Informa Economics Inc forecast a "persistently tight market balance for years ahead."

 

Informa chairman Bruce Scherr said the weak dollar will translate to larger corn exports despite high prices.