Demand from livestock producers rose to 1.9 billion bushels in the three months ended Dec. 1, from 1.823 billion a year earlier, according to Dan Cekander, the director of grain market analysis at Newedge USA LLC in Chicago.
The U.S. hog-breeding herd has expanded at a time when analysts said higher feed costs would cause a contraction. The government said Dec. 28 that the herd rose 0.2 percent to 5.817 million head on Dec. 1, compared with a 0.8 percent drop expected on average by analysts surveyed by Bloomberg. Poultry production rose 5.9 percent to 5.405 billion pounds in the first 11 months of the year.
U.S. cash markets for corn are signaling strengthening demand, with exporters in New Orleans paying a premium of 62 cents a bushel over Chicago futures on Jan. 7, USDA data show. That’s 58 percent more than the average over the past five years. Chicago grain merchants were paying a 19.5-cent premium for deliveries before the end of this month, compared with a five-year average discount of 29 cents.
The premiums that exporters are paying for corn delivered to ports in New Orleans and to processor Archer-Daniels-Midland Co. in Decatur, Illinois, are the highest ever for this time of the year, said William Tierney, the chief economist for AgResource Co., a Chicago-based research company.
That’s “an indication of tightening supplies relative to demand,” the former USDA analyst said. “We’re looking for higher prices after this report.”