USDA cuts US end-year corn stocks estimate

OREANDA-NEWS.  The US Department of Agriculture (USDA) revised down US corn ending stocks for the 2014-15 crop year because of higher expected ethanol production.

The February World Agricultural Supply and Demand Estimates (WASDE) report projected US corn carryout at 1.8bn bushels, down by 50mn bushels from last month to reflect a 75mn-bushel increase in ethanol use. Higher ethanol demand is expected based on the Energy Information Administration's higher gasoline consumption forecast for 2015, the USDA said. Corn carryout stands at 48pc higher than the same time in 2013-14.

The USDA narrowed its projected average farm price for corn to \\$3.40-3.90/bushel, compared to \\$3.35-3.95/bushel in January. Corn production (14.2bn bushels), area (83.1mn harvested acres) and yield (171 bushels/acre) estimates were unchanged with harvest having fully concluded.

Estimated global corn ending stocks increased by 500,000t from last month to 189.6mn t as production grew by 3mn t to 991.3mn t, reflecting higher production expectations in Argentina, the European Union and Ukraine.

With the latest WASDE figures coming in within market expectations, front-month corn futures prices were down by a cent to \\$3.90/bushel at midday after settling near a one-month high yesterday.

Projected US soybean carryout fell to 385mn bushels, down by 35mn bushels from January, as higher expected exports and crushings offset a 10mn bushel increase in expected imports. Average farm price for soybeans was unchanged at \\$9.45-10.95/bushel.

The world soybean production forecast increased by 690,000t to 315.1mn t as a 1mn t decrease in Brazilian production because of dry weather conditions was offset by a 1mn t increase in Argentina's output. China's soybean production also slightly increased to 12.4mn t. US production was unchanged at 108mn t (3.97bn bushels).

Similar to corn, soybean futures were flat at midday with the March contract at \\$9.78/bushel.