US: Will corn supplies be tight for another year?

The United States Department of Agriculture (USDA) projects that corn stocks at the end of the 2010-11 marketing year will total only 745 million bushels, said University of Illinois agricultural economist Darrel Good. “That projection represents 5.5 percent of projected marketing year consumption. Stocks as a percent of consumption would be the smallest since the record low five percent of 1995-96. And five percent is considered to be a minimal pipeline supply,” he said.

Marketing year-ending stocks of soybeans are projected at 140 million bushels, or 4.2 percent of projected consumption. That ratio is slightly smaller than the previous low of 4.4 percent in 2003-04, he said. “The low level of inventories projected for this year reflects different market conditions than those that existed in either 1995-96 or 2003-04. Small crops that required a sharp reduction in the level of consumption just to maintain minimum year-ending stocks characterized both of those years.

Year-over-year consumption of corn declined by 8.5 percent in 1995-96, and soybean consumption declined by 9.5 percent in 2003-04,” he said. Read more...

This blog is written by Martin Little The Global Miller, published and supported by the GFMT Magazine from Perendale Publishers.