Corn prices were trading 18.75 cents higher at $6.925 per bushel Wednesday morning after a U.S. Department of Agriculture report cut year-end U.S. corn stocks more than expected.
Oilseeds, wheat and oats were also pulled higher.
USDA projected corn stocks would fall to 675 million bu., well below the average pre-report estimate of 729 million.
It lifted its estimate of U.S. corn used to produce ethanol by 50 million bu. to 4.950 billion. More corn is also being processed into corn syrup. The boom in ethanol and syrup production was largely the cause for the reduction in ending stocks.
U.S. soybean ending stocks were pegged at 140 million bu., above trade estimates for 136 million. U.S. wheat ending stocks were forecast at 818 million bu., above an average trade estimate for 810 million.
Although slightly larger than expected, the soybean and wheat numbers were not seen as bearish.
USDA cut its forecast of the Argentina soybean crop by one million tonnes to 49.5 million, but raised its forecast for Brazil by one million to 68.5 million.
The U.S. corn stocks number represents a five percent stocks-to-use ratio or 2 1/2 weeks of supply. That is the tightest since 1995-96. Analysts believe higher prices will be needed to ration demand.
