|
US corn inventories could be on course to hit their highest since Ronald Reagan was still the country's president, boosted by last year's strong harvest at a time of diminished livestock herds.
The US Department of Agriculture will, in a key crop report due on Friday, peg corn stocks at the end of 2009-10 at 2.15bn bushels, Chicago-based broker Linn Group believes.
Such a figure would represent a rise of 351m bushels on the USDA's last estimate, and put stocks at the August 31 year end at their highest since 1987-88.
Dashed expectations
Linn's forecast reflected data last week showing a surprise 11% rise in American corn stocks as of the beginning of the March, the broker said.
|
Where will the USDA peg end 2009-10 crop stocks? Average forecasts and (USDA's March estimates)
Corn: 1.922bn bushels (1.799bn bushels)
Soybeans: 208m bushels (190m bushels)
Wheat: 992m bushels (1.001bn bushels)
Sources: Reuters/ USDA | "The thought process back in January was that this poor quality crop would see a lot of feed use," Linn analyst Jerrod Kitt told Agrimoney.com.
Such expectations had been dashed by last week's statistics, which were some 200m bushels higher than the market had expected, with the excess attributed to lower-than-expected demand from livestock farmers.
Linn's forecast included an extra allowance for time, to account for feed use remaining at lower levels.
Separate statistics last week showed the US hog herd falling 3% over the last year to its smallest in three years. The US cattle inventory is also at historically low levels, while many poultry producers have cut back capacity.
'Market pressure'
On average, analysts expect Friday's report to show American corn inventories ending 2009-10 at 1.92bn bushels, a rise of 123m bushels on the USDA's last estimate.
"Last week's report showed [the USDA] found some corn and beans laying around it didn't know it had, so perception is they will add it to the corn and soybean ending-stocks," Tim Hannagan at broker PFGBest said.
"This could pressure the market on Friday's open."
Only one broker, Indiana-based Global Commodity Analytics, expects the USDA to cut its corn stocks estimate.
Soybean revision
The market is also forecasting an upward revision to the official estimate for year-end soybean stocks, ending a spell of downward revisions thanks to strong exports.
Analysts, on average, expect a lift of 18m bushels to 208m bushels to the inventories figure.
The estimate for wheat stocks at the end of the grain's crop year in June is expected to be edged 9m bushels lower to 992m bushels.
|
PRINTABLE VERSION
EMAIL TO A FRIEND
RSS FEEDS