U.S. corn and wheat stocks were much larger than expected at the end of the summer, providing a larger buffer against this year s reduced harvest and driving some grain prices to their lowest levels this year.
In a sign that near-record grain prices curbed demand far more than analysts had anticipated, inventories of corn fell to 1.13 billion bushels at the end of the crop year that closed Sept. 1, according to the Agriculture Department s quarterly stocks survey of farmers and warehouses.
While unusually small compared to the average carry-over of 1.65 billion bushels, inventories were 162 million bushels higher than traders had estimated and far more robust than predictions early this year that stocks would shrink to their lowest level in 15 years.
Ethanol producers, feeders, exporters are very nervous, said Tim Hannagan, analyst at PFG Best. You don t want to be caught short on inventory going into next year.
Corn and wheat prices dived more than six per cent, putting corn on track for its worst month since 1996.
The wheat stockpile was six per cent larger than expected while soybeans were five per cent smaller, according to the report.