Feds say world corn supplies will grow slightly; prices drop

Corn prices dropped Thursday after the U.S. Department of Agriculture said worldwide supplies would increase slightly.
The monthly estimate of surplus corn stocks was left unchanged at 675 million bushels.
Corn responded by falling 19 cents per bushel to $6.76 for May delivery. Soybeans were down early, but they reversed with a 5-cent-per-bushel gain to $13.49 near the end of trading on the Chicago Board of Trade.
"The report is basically neutral for corn and soybeans," said commodity trader Don Roose of U.S. Commodities in West Des Moines. "The big number will be in the farmer planting intentions report out March 31."

Traders and analysts have said the United States will need up to 5 million more acres of corn beyond the 88 million acres planted in 2010. Iowa farmers planted 13 million acres last year.
"We still need to grow a good crop this summer, and planting progress and weather will become increasingly important to corn traders," broker Tomm Pfitzenmaier of Summit Commodities said.
Iowa is the nation's No. 1 corn producing state, with a crop that will bring a cash value to the Iowa economy of at least $10 billion for the 2010 harvest year.

The USDA report did not change its forecast of domestic stocks of soybeans — 140 million bushels.
The USDA report on worldwide supply and demand said corn supplies would continue to be tight but with slight upticks for production in South America.
The USDA also left unchanged its forecast for 4.95 billion bushels of corn to be used for ethanol, up from 3.7 billion bushels in the 2009-10 crop year. The total U.S. corn production last year was about 12.4 billion bushels.

The report forecasts average prices for corn from $5.15 to $5.65 per bushel this year. Corn prices have doubled since June to $7, largely on news of tight domestic and worldwide supplies.
The USDA predicts continued robust export markets for livestock. "The forecast for beef exports for 2011 is raised from last month on strength in exports to Asia," the report said.
The forecast calls for continued high prices for hogs and cattle, which reached record levels this month.

(Source: http://www.desmoinesregister.com/article/20110311/BUSINESS01/103110344/1001/)