Monthly USDA report sees less corn, more meat
The monthly World Agricultural Supply and Demand report from the United States Department of Agriculture, indicates corn stocks are down by 155 million bushels, likely sparking higher corn prices, while boosting meat production.
April 10, 2008
The United States Department of Agriculture (USDA) lowered its forecast for 2007/2008 U.S. corn endings stocks by 155 million bushels to 1.283 billion, a greater reduction than analysts expected, and a move that will likely push already inflated corn prices even higher.
In its monthly World Agricultural Supply and Demand report, the USDA said increased feed and residual corn use and larger exports more than offset reduced expectations for corn ethanol use as the pace of new plant startups lags earlier forecasts. USDA also raised its projected season-average farm price for corn to $4.10 to $4.50 per bushel from the month-ago forecast of $3.75 to $4.25, which had lagged industry forecasts.
Conversely, the USDA raised its soybean stocks forecast by 20 million bushels to 160 million, on expected lower residual use, and lowered its average farm price forecast to $10.00 to $10.50 per bushel from last month's $10.00 to $10.80. USDA dropped its soybean meal average price forecast to $315 to $335 per short ton from a month-ago forecast of $320 to $350 per short ton.
The USDA raised its forecast for total 2008 U.S. meat production as higher expected beef and pork production more than offset lower forecast broiler production.
Beef production was increased on continued strong cow slaughter and on
higher-than-expected cattle weights. Beef export forecasts for 2008 were lowered due to slow exports to both North America and Asia markets.
Pork production forecasts were raised as USDA's March 28 Quarterly Hogs and Pigs report indicated large hog inventories, upwardly revised pig crops for second half 2007, and pointed to a relatively large pig crop in the first half of 2008. Although this implies larger slaughter in 2008, increased forecast corn prices are expected to limit hog weights.
Poultry production forecasts were reduced as hatchery data point to a slowdown in production and higher grain prices are expected to affect growth later in the year.