(Businessweek) – The U.S. unexpectedly cut its estimate for 2014 corn inventories after a price slump to a three-year low boosted global demand.
Corn reserves on Aug. 31 will be 1.456 billion bushels, down from 1.481 billion (37.1 million metric tons) forecast in February, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey expected inventories to rise to 1.495 billion bushels, on average.
Stockpiles are forecast to rise from 821 million bushels a year earlier after domestic production jumped last year. Exports will be 1.625 billion bushels, compared with 1.6 billion estimated in February, the USDA said.
On March 7, corn futures for May delivery fell 0.4 percent to $4.89 a bushel on the Chicago Board of Trade, leaving prices up 16 percent this year. Corn at the farm gate may average $4.25 to $4.75 in the 12 months that began Sept. 1, compared with $4.20 to $4.80 forecast in February, the USDA said.
World output in the year that began Oct. 1 will be 967.52 million tons, compared with 966.63 million forecast a month earlier and up from 863.42 million a year earlier, the USDA said. Production in Brazil was unchanged at 70 million tons from a month ago, while Argentina farmers may harvest 24 million, also unchanged.
Global inventories before the start of the Northern Hemisphere harvests in 2014 will be 158.47 million tons, compared with 157.3 million projected a month ago and 134.67 million last year. Traders surveyed by Bloomberg had forecast a drop to 156.61 million, on average.
