Corn Stocks Tighten FurtherCorn Stocks Tighten Further
Anyone looking for price relief in the monthly World Agriculture Supply and Demand Estimates (WASDE) was disappointed
February 22, 2011
Anyone looking for price relief in the monthly World Agriculture Supply and Demand Estimates (WASDE) was disappointed.
“Fears about even further tightening of market-year 2010-11 U.S. corn ending stocks (675 million bu.) and ending stocks-to-use (5.0%) in the spring and early summer of 2011 are likely to support continued if not even higher U.S. corn and grain sorghum prices in coming months,” says Daniel O'Brien, Kansas State University Extension ag economist, in his monthly Grain Outlook. “It is likely that in the spring-summer of 2011 higher feed-grain prices will result in tighter profit margins and reduced feed-grain usage for either ethanol production, non-ethanol domestic wet milling, livestock feeding and/or exports. This report (WASDE) also provides even stronger impetus for increased U.S. corn acreage to be planted in the spring of 2011.”
The latest WASDE increases market year average corn prices to $5.05-$5.75/bu.
According to O’Brien, key factors that could affect U.S. grain markets in 2011 include: “U.S. corn vs. soybean acreage competition in the spring of 2011; heightened sensitivity to possible 2011 U.S. crop production problems for feed grains, oilseeds and wheat; sensitivity to 2011 Chinese and other foreign crop production prospects; competition for U.S. feed-grain exports from more world feed quality wheat in 2011; volatility in financial and currency markets stemming from economic trends in the U.S.; and the World economy.”
O’Brien points out world corn usage has grown 1.5%/year since 2004-2005.
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