Source:  Rita Jane Gabbett, MEATINGPLACE.COM, 2/9/11

USDA once again lowered its forecast for U.S. corn ending stocks in the year ending September 2011, citing stronger use for ethanol and high fructose corn syrup, and raising projected average prices to $5.05 to $5.75 per bushel from $4.90 to $5.70 last month.

USDA put U.S. corn ending stocks at 675 million bushels. Analysts on average had expected ending stocks at 728 million bushels, according to a Reuters poll, so the new USDA forecasts sent corn futures prices over $7.00 a bushel for July delivery in morning trade on the Chicago Board of Trade.

Corn used for ethanol is projected 50 million bushels higher on a higher-than-expected November final ethanol production estimate and weekly ethanol data that indicate record output for December and January.
While rising corn prices have reduced ethanol margins, ethanol blender incentives remain in place and export demand prospects remain strong with sugar-based ethanol uncompetitive at current sugar prices, according to USDA’s World Agriculture Supply and Demand Estimates report.

Corn used to produce high fructose corn syrup (HFCS) is projected 15-million-bushels higher reflecting strong shipments of the corn-based sweetener to Mexico. Demand for HFCS has grown in Mexico as sugar exports to the United States have increased.

USDA also projected shrinking global coarse grain supplies, noting reduced corn production in Argentina and Mexico.

Soybeans
USDA left soybean supply and use projections largely unchanged, but did raise is soybean meal price forecast to a range of $340 to $380 per ton, up $20 on each end of the range.

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