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Record US Corn Harvest Forecast For 2010-11

14 May 2010
Meat & Livestock Australia

US - The forecast for another record US corn harvest in 2010-11 is expected to maintain downwards pressure upon prices, according to the USDA’s latest World Agricultural Supply & Demand Estimates. The twp per cent increase in corn production, to 13.4 billion bushels, should more than account for a projected lift in corn usage, with end of year stockpiles expected to rise five per cent, to 1.8 billion bushels.

Consumption by the US ethanol industry is tipped to rise five per cent in 2010-11, to 4.6 billion bushels, with rising federal mandates on biofuels and significant blending incentives for fuel producers, writes Meat and Livestock Australia.

Conversely, US feed grain demand is projected to fall slightly for 2010-11, to 5.35 billion bushels, in line with the expected slow recovery in cattle on feed and increasing use of alternate feedstuffs.

Increasing world corn production is likely to maintain pressure upon global and domestic prices. Delivered Sydney prices for feed barley, wheat and sorghum are currently averaging $194/tonne, $215/tonne and $197/tonne respectively – 20 per cent, 21 per cent and 15 per cent cheaper than a year earlier.

However, Australian sorghum production this year is forecast 52 per cent lower than in 2008-09 and many producers are reportedly favouring rotation crops such as legumes and oilseeds this winter, in response to poorer prices on offer for wheat and barley (ABARE). If this results in tighter feed grain supplies, it should help constrain any further downside price movements.

TheCattleSite News Desk



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