Corn inventories in the U.S., the world’s biggest grower, fell more than expected and are the lowest for this time of year since 2004, the government said. Wheat supplies fell 16 percent, while soybeans reserves rose.
Stockpiles of corn on March 1 totaled 6.009 billion bushels, down 7.9 percent from 6.523 billion a year earlier, the U.S. Department of Agriculture said today in a report. Analysts in a Bloomberg survey expected 6.16 billion, on average. The USDA’s estimate of consumption and waste in the three months through February unexpectedly rose 3.1 percent to a record 3.64 billion bushels.
Before today, corn futures on the Chicago Board of Trade tumbled 11 percent from a five-month high on March 19, partly on concern that USDA would report a higher inventory estimate than analysts expected. The USDA also reported today that farmers plan to sow 95.864 million acres of corn in 2012, the most in 75 years, boosting prospects for supply after the harvest in September.
“The smaller corn supply is a major surprise,” Pete Meyer, the senior director of agricultural commodities at PIRI Energy Group in New York, said in a telephone interview. “Supply will be exceptionally tight before the start of the U.S. harvest.”
Analysts missed the USDA quarterly inventory forecasts for corn by an average of 225 million bushels in the past seven quarters, according to data compiled by Bloomberg. That’s twice as much as in the previous five years and about equal to 12 months of Russian consumption.
Corn futures for May delivery jumped 4.5 percent to $6.31 a bushel at 9:38 a.m. on the CBOT, heading for the biggest gain since Oct. 11.
Supplies of corn stored in farmer-owned grain bins fell 5.7 percent to 3.192 billion bushels on March 1, down from 3.384 billion a year earlier, USDA data show. On-farm inventories as a share of total supply rose to 53.1 percent from 51.9 percent a year earlier.
“Corn demand is not shrinking, and farmers are going to have to rise up and produce a big crop this year” to rebuild inventories, Sal Gilbertie, the president of Santa Fe, New Mexico-based Teucrium Trading LLC, said in a telephone interview. “Prices may rise between now and July because farmers are not going to let go of their inventories until they know they can replace them with new-crop supplies.”
U.S. wheat inventories at the start of this month totaled 1.201 billion bushels, down 16 percent from 1.425 billion a year earlier and below the 1.25 billion expected by analysts surveyed by Bloomberg.
Wheat futures for May delivery rose 3.7 percent to $6.3525 a bushel on the CBOT. Before today, prices dropped 17 percent in the past year, as the USDA forecast world inventories before the start of the Northern Hemisphere harvest will rise to a 12-year high.
Soybean inventories on March 1 totaled 1.372 billion bushels, up 9.9 percent from the 1.249 billion a year earlier, the USDA said. The average analyst estimate was 1.371 billion bushels.
Consumption of the oilseed in the three months ended Feb. 29 totaled 998 million bushels, down 3 percent from a year earlier, the USDA said.
Soybean futures for May delivery rallied 3.1 percent to $13.97 a bushel on the CBOT, heading for the biggest gain since Oct. 11. On March 25, the price touched $13.885, the highest since September as drought damaged crops in Brazil and Argentina, the two biggest growers after the U.S.
Corn is the most valuable U.S. crop, followed by soybeans, hay and wheat, USDA data show.