December 12, 2007

US 2007/08 corn may score record price, export

US corn exports are set to post another crop record at 2.45 billion bushels this marketing year over worldwide appetite for US crops amid record corn, wheat and soy prices, the government forecast on Tuesday (December 11).

The Agriculture Department increased its estimates for farm-gate prices for corn, wheat and soy, already forecast at record levels, by 75 cents a bushel for soy, 30 cents a bushel for wheat and 15 cents a bushel for corn.

At the projected 2.45 billion bushels (62.2 million tonnes), 2007/08 corn exports would be a record, surpassing the previous record of 2.4 billion in 1979/80 said USDA. The recent forecast was up 100 million bushels from November due to larger demand overseas for corn for livestock feed.

USDA increased its wheat export forecast by 25 million bushels, to 1.175 billion bushels. As a result, the US wheat stockpile is seen to shrink to 280 million bushels by the time the 2008 harvest begins, the smallest carry-over in 60 years.

This makes wheat supply just a little bit tighter, thus, making wheat prices higher said private consultant John Schnittker. USDA forecast larger soy exports, which Schnittker said would make prices "a little more vulnerable to any trouble in South America."

The weak dollar, shortfalls in wheat crops overseas and the boom in fuel ethanol mean rapid use of this year's US crops.

Don Roose of US Commodities in West Des Moines, Iowa, said USDA's crop report "basically shows that demand is alive and well."

Season-average farm-gate prices were forecast by USDA for US$9.75 a bushel for soy, US$6.40 a bushel for wheat and US$3.65 a bushel for corn.

USDA lowered its forecast of soy oil used in making biodiesel to 3.8 billion lbs, down 400 million lbs from November. Soyoil and soymeal prices are also rising, the report said.