U. S. corn stocks will swell to their highest in five years after a racing start to planting boosted chances for a record 2010-11 crop, while soybean ending inventories will nearly double, the U. S. government forecast May 11.
Chicago corn prices rose after the U. S. Department of Agriculture’s first projections for this year’s corn output and usage showed a marginally smaller-than-expected surplus, but the broad view was one of plentiful supplies that are likely to keep a lid on grain prices for months to come.
“It’s a big crop and a big carry-over into next year,” said Jerry Gidel of North America Risk Management.
USDA said corn use for ethanol would rise nearly five per cent to 4.6 billion bushels, but pencilled in a modest 100,000 tonnes of 2010-11 exports to China, despite hopes in farm country that its April 28 purchase of 115,000 tonnes – the first in four years – will start sustained purchases.
Even with a forecast four per cent slip in the winter wheat crop to 1.46 billion bushels wheat ending stocks are likely to swell to 997 million bushels, half a year’s use and the biggest surplus since 1987-88 after good yields offset fewer acres, the USDA forecast.
The USDA’s upward revision to its estimated corn yield – at 163.5 bushels an acre now the second highest on record and 2.7 bushels above the 10-year trend line – was little surprise after a record planting pace got most crops in the ground early enough to avoid any late-season damage.
With the fundamental forecasts now absorbed, traders’ attention will return to Midwest weather conditions during the critical early-growth phase, with some analysts seeing only downside given thus-far near-perfect conditions.
The USDA projected the the corn stockpile would total 1.818 billion bushels at the of the 2010-11 marketing year, up from 1.738 billion bushels this year, and the largest in five years.
Soybeans would tally 365 million bushels at the end of 2010-11, the largest supply in four years and up from the 190 million bushels expected on Aug. 31 when the 2009-10 marketing year ends.
The total 2010 wheat crop is expected to drop eight per cent to 2.046 billion bushels, with ample rainfall boosting yields and offsetting a nine per cent cut in sowings, it said.
Farmers told USDA they intended to plant 88.8 million acres of corn this year, up 2.3 million acres from last year, and a record 78.1 million acres of soybeans.