(Agriculture.com) – Federal forecasters are expected to cut their estimate for U.S. corn inventories this week due to a smaller-than-expected harvest.
Soybean supplies, however, are likely to hold steady as modest adjustments to demand offset any tweak in production forecasts.
The U.S. Department of Agriculture is scheduled to release its latest estimate for production, inventories and demand Thursday at 8:30 a.m. EST (1330 GMT).
The USDA in its annual crop production report will forecast the corn harvest at 12.280 billion bushels, down 0.2% from its November estimate, according to 20 analysts surveyed by Dow Jones Newswires.
A smaller U.S. crop and strong domestic demand are expected to trim the USDA’s end-of-year corn supply projections. Poor weather that delayed harvest in the eastern Midwest left crops struggling against wet conditions and will lead to the USDA lowering its output forecast from what it estimated in November, said Shawn McCambridge, senior gains analyst with Jefferies Bache in Chicago.
Solid domestic demand from the livestock industry, with the amount of hogs and cattle in feed lots increasing, is a strong draw on U.S. corn supplies, McCambridge added.
The USDA is expected to lower its estimate for corn inventories as of Aug. 31, 2012, when the crop year ends, to 753 million bushels, down 11.2% from the USDA’s December estimate. The USDA is seen projecting strong feed usage in the first quarter of the 2011-12 marketing year, with inventories as of Dec. 1 expected at 9.401 billion bushels, according to 15 analysts surveyed by Dow Jones Newswires.
The agency, however, is expected to keep its supply estimate in line with their December forecast for soybeans. The USDA’s production estimate for the domestic soybean crop is expected to be near the November estimate. Forecasters are expected to peg the soy harvest at 3.042 billion bushels, down slightly from its November estimate of 3.046 billion, according to 20 analysts surveyed by Dow Jones Newswires.
The general consensus among market participants is the USDA will only tweak yields in Wednesday’s report, as most of the crop issues already have been figured into government estimates.
The USDA also is expected to leave its estimate for soy inventories virtually unchanged as of Aug. 31, 2012, when the crop year ends. Analysts on average predict supplies at 227 million bushels, down 1.3% from the USDA’s December estimate.
A slow start to the export season and lagging crushing pace will reveal the U.S. had ample soybean stocks as of Dec. 1. The average of analysts’ estimates puts stocks at 2.312 billion bushels.
Meanwhile, analysts anticipate the USDA could reduce global corn and soybean supplies, recognizing yield losses in South America. However, many analysts anticipate the USDA may wait until later in the growing season to make these cuts.
By Andrew Johnson Jr., Dow Jones Newswires; 312-347-4604; andrew.johnsonjr@dowjones.com
(END) Dow Jones Newswires
January 11, 2012 07:36 ET (12:36 GMT)
