Grain and soybean supplies in the United States will keep shrinking next year as the value of the US dollar stays low, giving overseas customers an opportunity to snap up bargain food and feed in addition to root stock for the growing biofuels industry, analysts said.
The prospects for exports to increase come at a time of solid US domestic demand and the shrinking supplies could boost the price of each commodity to record levels over the next year or two as big investors keep ploughing money into commodities.
The US Department of Agriculture (USDA) early Tuesday will release its December supply/demand and world crop production reports and analysts expect the government to shave several million bushels from projected ending stocks of wheat, corn and soybeans for the current 2007/08 marketing year.
An average of analysts' estimates for US corn ending stocks was at 1.88 billion bushels, below the USDA outlook in November for 1.897 billion but still well above the past season's carryout supply of 1.304 billion.
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