From staff reports The U.S. Department of Agriculture delivered a shock to the agricultural industry with the release of its December Crop Production and World Agricultural Supply and Demand Estimates reports, cutting corn ending inventory stocks by 200 million bushels.
The USDA has cut corn ending stocks by 200mb, aggressively improving its forecasts for exports and ethanol production. The new ending stocks estimate, 1.738 billion bushels, is 62mb below the lowest pre-report trade estimate.
Chief Strategist Rich Nelson for Allendale Inc., a firm specializing in agricultural market research and trading, determined Dec. 10 that this was the largest decline ever seen in a December report. As he explained, 50mb of that decline was the result of higher corn usage for ethanol production, with production up 4% compared to last year and exports performing strongly. However, 150 million bushels were added to exports.
“Even before we hear our new president’s official trade policy, USDA came out very confidently and made a clear statement. In other words, they feel like these strong exports on the corn side will last and are valid rather than merely tied to pre-trade policy buying,” Nelson explained.
Last Tuesday’s new-crop U.S. ending stocks and world ending stocks were bullish for corn at 1,738mb and 316.2mb respectively in the month of December.
For a full account of both reports, visit www.nass.usda.gov and www. usda.gov.