U.S. Ending Corn Stocks Projected Higher

WASHINGTON-(Grainnet)--U.S. 2008/09 corn ending stocks are projected higher this month as higher carryin and reductions in food, seed, and industrial use more than offset lower production and higher feed and residual use.

Harvested area is raised 100,000 acres based on the June 30 Acreage report.

Production, however, is projected 20 million bushels lower at 11.715 billion as the projected yield is lowered 0.5 bushels per acre.

As indicated in the Acreage report, heavy June rains and flooding reduced the share of harvested area in the higher-yielding Corn Belt states.

Feed and residual use for 2008/09 is raised 50 million bushels based on higher expected pork and poultry production in the first half of the 2008/09 marketing year.

Food, seed, and industrial use is lowered 65 million bushels, in line with changes to the 2007/08 marketing year.

Ending stocks are projected 160 million bushels higher at 833 million.

The 2008/09 marketing year average price received by producers is projected at $5.50 to $6.50 per bushel, up 20 cents on each end of the range.

The tighter balance sheet for soybeans and higher soybean prices are expected to drive competition for 2009
acreage keeping cash and futures corn prices relatively strong, but below recent record levels.

Ending stocks for 2007/08 are projected 165 million bushels higher with food, seed, and industrial use lowered 65 million bushels and feed and residual use lowered 100 million bushels.

Ethanol corn use for 2007/08 is lowered 50 million bushels based on reported delays in plant start-ups and construction, as well as lower expected plant capacity utilization as indicated by the most recent ethanol production data.

Feed and residual use for 2007/08 is lowered as June 1 stocks indicated lower-than-expected corn use during the March-May quarter.

The 2007/08 marketing year price for corn is unchanged this month at $4.25-$4.45 per bushel.

Interesting Article by Dennis Gartman

(The Gartman Letter)--Commodity prices have continued to plunge, with energy leading the way lower in a very, very ugly fashion.

We shall go on record this morning and be very clear about one thing: The multi-year bull market in commodities has not ended.

It is still very much intact, and it shall be intact for years into the future. However, for the moment, a material, violent, bull market correction is fully in force, and it is likely to remain in force for several more days and perhaps for a few weeks, until such time as the excesses are wrung from the market; until such time as the late longs to the commodity party are punished and punished well and hard; until such time as those same late longs swear off "investment" in commodities once again, and until such time as the investment community fully and completely understands that commodities are not an asset class!!!!


Posted by Jim Daven

Video: High Input Costs

Food prices have been going up lately, but so are the production costs for farmers who grow what we eat. Farm expenses are at record highs for Tennessee row-crop producers now. Chuck Denney has that story.