April 13, 2021
USDA: Corn supply to shrink further due to high demand
The US Department of Agriculture (USDA) said domestic corn supplies will drop more than projected previously due to high demand from the livestock feed, export and ethanol sectors, Reuters reported.
The latest USDA report resulted in corn futures rising to its highest in eight years, with a bigger focus on the next US crop being planted now to rebuild supplies.
The USDA World Agricultural Supply and Demand Estimates monthly report projected the US corn stockpile will drop to 1.352 billion bushels by September 1, a decline from the 1.919 billion bushels in September 2020. This contrasts with the March outlook for corn ending stocks of 1.502 billion bushels.
Mark Schultz, chief market analyst at Northstar Commodity, said there is a greater demand than what the USDA is reported.
If the USDA projections are realised, it will be the lowest corn stocks in seven years before the next harvest.
Average estimates in a Reuters poll showed analysts projected corn stocks at 1.396 billion bushels.
The USDA increased its corn export forecasts by 75 million bushels to 2.280 billion bushels, which would be 35.6% higher than the last marketing year.
The USDA's wheat ending stocks were increased to 852 million bushels. Soybean ending stocks were held at 120 million bushels, a seven year low, boosting export forecasts but dropping demand from the seed and crush sectors.