U.S. corn supplies, already stretched thin by relentless feed, fuel and food demand, will grow even tighter in the coming year due to a rain-shortened crop, the government projected June 9.
The USDA said rains and floods prevented farmers from planting all the corn they had planned. That means a drop of 300 million bushels in the likely corn crop and a drawdown of U.S. stockpiles through fall 2012.
For the second year in a row, U.S. corn supplies will be the second tightest since the mid-1930s. There would be less than a three-week supply of corn on hand at the end of next summer, barely enough to feed livestock and keep processing plants open.
At the same time USDA projected a smaller U.S. corn crop, it said China would sharply boost its corn consumption – up five per cent this year and up eight per cent in the sales year that opens on Sept 1. China will rely on its large stockpiles to meet the higher demand rather than import it, said USDA.
Together the United States and China grow 60 per cent of the corn in the world. The U.S. share is about 40 per cent. With both countries drawing on their stockpiles, the world corn supply would fall by 13 per cent in the coming year. “China is not expected to be a significant exporter,” said USDA.
USDA said corn plantings would fall 1.5 million acres below the 92.2 million acres planned by growers as spring arrived. While plantings would be 1.6 per cent smaller, corn harvest area will drop by 2.2 per cent, said USDA, pointing to losses from floods along the Missouri River and the lower Ohio and Mississippi rivers.
“USDA must feel comfortable we are going to lose acres, based on satellite (imagery),” said Jack Scoville, analyst for The Price Group. “We know we’re going to lose the acres; it just depends how much. They didn’t put them in beans.”