Corn prices drop as U.S. estimate on inventories went up

Corn prices went down as the US government raised its expected domestic inventory during the present crop season.

According to an article from Bloomberg Business the US Department of Agriculture reported Tuesday that corn reserves are seen to increase to 1.76 billion bushels by the end of August, from 1.731 this year. Meanwhile, Bloomberg surveyed 29 analysts and found that the average estimate was 1.597 billion. The agency projected 1.561 billion in October. Corn futures during the December delivery went down 1.6 percent to $3.60 per bushel on the Chicago Board of Trade 12p.m.

Meanwhile Journal Star has reported a drop in crop prices Tuesday after the latest US government forecast on reserve goes higher than previously predicted. US soybean output is expected be 3.981 billion bushels after 12 months from September 1. The US Department of Agriculture reported Tuesday that the estimates are higher than last year's prediction of harvesting 3.927 billion. The report pushes reserves to 465 million bushels by the end of this crop season.

In a report from AG Week the US Department of Agriculture's unexpected change in estimation on global course grain supply is partly due to the fact that Chinese feed millers were using other types of feeds besides corn at a higher rate than what was previously known during the past three years. This revision increased the global end-of-season estimates of the agency on corn stocks outlook to almost 212 million tons, which is the highest recorded production. 50 percent of that estimate is coming from China.

US Commodities president Don Roose said, "There's no shortage of grain in the US, or the world."

Meanwhile, Chinese corn stocks for the 2015/16 marketing year, which will end on September 30, increased by 18.8 mullion tons, as reported by the USDA. A lower count of corn stock in Brazil due to more livestock sector firms using it has partly offset the supply increase.