WASHINGTON, Dec 10 (Reuters) – Sharply lower prices will spur resurgent demand for U.S. corn at home and abroad, the U.S. government forecast on Tuesday, resulting in smaller than expected – but still ample – U.S. and world stockpiles at the end of this marketing year.
Soybean stocks were forecast down sharply on the month as exports and domestic demand rise, and average farm prices are also seen slightly higher than last month, the U.S. Agriculture Department said.
U.S. wheat ending stocks were nudged higher, and the world crop was estimated not too far from a record high due to larger crops in Canada and Australia.
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As a result, USDA pegged world wheat ending stocks at 187.78 million tonnes, up 4 million tonnes from November and 2 percent larger than traders expected. Chicago wheat futures fell to contract lows earlier on Tuesday as traders braced for a bearish report.
The Agriculture Department said the record-large U.S. corn supply would dwindle to 1.792 billion bushels at the end of the marketing year, 4 percent less than traders had expected.
Still, it would be the largest stockpile in 8 years and a resounding recovery from three years of disappointing harvests and razor-thin supplies.
“U.S. corn use for 2013/14 is projected higher with increases for food, seed and industrial use, and for exports,” said USDA, with total use up nearly 1 percent from its November estimate. Compared to last season, corn use would be up nearly 2 billion bushels or 17 percent.
Corn exports would double from the previous marketing year and corn-for-ethanol would rise by 6 percent, said USDA, citing “the strong pace of weekly ethanol production since mid-October.”
The Environmental Protection Agency will decide in coming weeks whether to relax the federal mandate to mix biofuels into the gasoline supply.
With record crops in Canada and the United States, corn exports will rise worldwide and 2013/14 end stocks will be 1.9 million tonnes lower than forecast a month ago and 1.1 million tonnes less than traders expected.
