The amount of corn used for animal feed in the U.S. will be 2.2 percent larger than forecast a month ago as lower prices make the grain less costly for feedlots, the government said. Estimated stockpiles are unchanged as exports are forecast to fall.
Feed use for the year ending Aug 31. will be 4.55 billion bushels, compared with 4.45 billion projected in February, the U.S. Department of Agriculture said today in a report. Exports will total 825 million bushels, down 8.3 percent from the month-ago forecast and the slowest pace since 1972, the government said. Imports will rise, leaving inventories at 632 million bushels. Analysts expected stockpiles of 646 million bushels.
The projected cash price farmers receive dropped 10 cents to $7.10 a bushel from the February forecast, the USDA said. Lower prices may reduce costs for hog processor Smithfield Foods Inc. and ethanol producers such as Poet LLC and Archer-Daniels-Midland Co. Last year, about 41 percent of the crop was processed into fuel and a byproduct used as feed, topping the share used in animal feed -- 37 percent -- for a second straight year.
Corn futures for May delivery rose 0.4 percent to $6.9375 a bushel at 9:24 a.m. on the Chicago Board of Trade. Prices reached a record $8.49 on Aug. 10 as the worst drought in more than 70 years threatened production, eventually cutting the harvest 13 percent to the lowest since 2006. Futures have plunged 18 percent since reaching a record in August as the outlook for global supply improved and high prices slowed overseas demand.
An estimated 4.5 billion bushels will be used to produce ethanol, unchanged from the February forecast and down from 5.011 billion in the previous year, the USDA said. Feed demand will be little from a year earlier, the agency said.
Aggregate world output for the marketing years that began Sept. 1 in the U.S. and March 1 in Brazil will be 854.07 million tons, down from 854.38 million forecast a month ago and 882.71 million last year, the USDA said.
Brazil’s estimated crop was unchanged from 72.5 million forecast in February and down from 73 million last year. Argentina’s harvest was forecast at 26.5 million, down from 27 million estimated a month ago and 21 million tons last season.
Global consumption is expected to fall to 867.75 million tons from 879.61 million last year and 867.34 million forecast in February.
Worldwide inventories at the end of the marketing year will be 117.48 million tons, down from 118.04 million predicted a month ago, and down from 131.16 million a year earlier, the USDA said. Analysts surveyed by Bloomberg expected 117.46 million, on average.
Alan Bjerga in Washington at firstname.lastname@example.org