May 8, 2008

 

US corn supply seen to plummet by half in 2009

 

 

The US corn stockpile is expected to plunge by 50 percent in the end of 2009 due to relentless demand for corn and the 8-percent drop in corn acreage, analysts said.

 

An average of analysts' estimates pegged the US corn ending stocks for the marketing year, which ends on Aug. 31, 2009 at 685 million bushels, about half USDA's old-crop ending stocks estimate for 1.283 billion bushels.

 

Some analysts caution that the USDA's corn supply forecast to be issued Friday morning may be overly optimistic, given the adverse planting conditions.

 

The expected drop in the 2008 corn stock will keep corn prices high and the market could easily soar to new record highs if farmers cannot get this year's crop sown within the next week, the analysts explained.

 

Jerry Gidel, analyst for North America Risk Management Inc., said it is a big question what the size of this year's corn crop would be.

 

The spring's wet weather has dashed previous hopes of 2 million additional acres, with some fears of even less corn plantings than the 86 million March intentions, he added.

 

Joe Victor, analyst for Illinois research and advisory firm Allendale Inc., most analysts have cut yields from the initial estimate of 155.28 bushels per acre down to 152.4 bushels because of late plantings.

 

Excessive wet weather in the US has prevented corn planters to go full speed.

 

The USDA on Monday reported corn sowings at only 27 percent, well behind the five-year average pace of 59 percent.

 

Corn yields can drop roughly 1.5 bushels per acre per day everyday a field goes unplanted after May 15.

 

Chicago Board of Trade corn prices hit a record high of US$6.60-3/4 per bushel in the July 2009 futures contract this week.