US Corn Surges On Strong Export Demand

US Corn futures were sharply higher on Friday. March futures were 26 1/4 cents higher at $7.12. The May contract closed 25 1/2 cents higher at $7.22. December was 18 3/4 cents higher at $6.01 3/4.

Weekly export sales were stronger than expected at 59.1 million bushels for the current marketing year and 5.9 million for next year. Export commitments for 2010/11 total 1.295 billion bushels, up 5% from a year ago. This compares to USDA's forecast for a 2% decline. Sales to Japan and Mexico accounted for nearly two-third of current year sales. No sign the export demand is slowing.

USDA filled in the details of the 2011/12 corn supply and demand forecast. The acreage is estimated at 92 million planted acres; 84.9 million harvested acres; yield at 161.7 for a production total at 13.73 billion bushels. On the demand side, exports are expected to edge up to 2 billion bushels; corn for ethanol is 5 billion bushels, both up 50 million bushels from 2010/11. Other industrial use is 1.41 billion bushels. USDA is forecasting a slight reduction feed and residual use next season to 5.15 billion bushels, down 50 million from this year. Total use edges up 60 million bushels to 13.56 billion.

Ending stocks are pegged at 865 million bushels, up 190 million from 2010/11. Even though ending stocks increase, USDA also expects a higher season average price because pre-harvest sales prices levels for new-crop are higher than they were last year.

(Source: http://www.indiainfoline.com/Markets/News/US-Corn-Surges-On-Strong-Export-Demand/3581261838)