Operators of cattle feedlots probably used less of the grain as the domestic herd on March 1 dropped 7% from a year earlier, more than the 6.4% expected by analysts, Dennis DeLaughter, an analyst at Vantage RM in Houston, said by telephone.
The worst drought since the 1930s cut corn production by 13% and left inventories on Dec. 1 at 8.03 billion bushels, the lowest for that date since 2003, according to the USDA. Use of the grain in livestock feed for the year that began Sept. 1 is forecast to rise to 4.55 billion bushels from 4.548 billion a year earlier, even after the price gained 17% in the 12 months through yesterday.
The production decline may have been overstated, DeLaughter said. The USDA raised its Dec. 1 corn stockpiles estimate by 2.26 million bushels, indicating more was in storage at the beginning of that month than previously thought.
“That tells us there was a very large amount of corn that was uncounted during the fall quarter,” Terry Reilly, a senior commodity analyst at Chicago-based Futures International LLC, said by e-mail. “That lessens our confidence in USDA’s fall survey.”
Soybean stockpiles on March 1 totaled 999 million bushels, also the lowest since 2004 and down 27% from 1.374 billion a year earlier, the USDA said. Analysts forecast inventories at 948 million bushels.
Last year’s drought and increased sales to China eroded inventories in the U.S., which until this year was the world’s biggest shipper of the oilseed. Exports from Sept. 1 through March 14 totaled 31.9 million metric tons, up 24% from the same period a year earlier, USDA data show.
Soybean planting will drop 0.1% to 77.126 million acres, the USDA said, based on its annual survey of farmers. Analysts forecast an increase to a record 78.351 million. Seeding may decline because growers expect prices to drop as output rises in South America. Brazil’s crop is forecast by the USDA at a record 83.5 million tons and exports at 38.4 million, making it the world’s largest shipper.