Process Management

News 141 views last update:6 Aug 2012

US grain stocks difficult to predict

Once again soaring demand from the ethanol industry is reducing US maize supplies, keeping prices near 10-year highs. This trend makes it difficult for analysts to estimate how much of the feed grain will be available at the end of the year.

The ethanol industry is expected to use over 2.0 billion bushels of maize this year, roughly 20% of the US crop and about equal to the amount exported by the United States each year.

Weather determines everything
Farmers gear up to plant as much maize as they can but so much is predicated on weather. Even if we get 8, 10 or 12 million more acres or whatever, production still will be determined by weather," said Daniel Bluntzer, director of research for Chicago-based trade house Frontier Risk Management.

The US Department of Agriculture (USDA) will release its February supply/demand report Friday. Analysts project that US maize stocks at the end of the current (2006/07) marketing year will reach 766 million bushels. This is more than 60% less than the supply at the end of last year.

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