A shift by China away from a corn exporter to a potential importer of the key feed grain led grains analysts to bump up their estimate for US corn exports and cut their forecast for US corn ending stocks for the current marketing year.
"The attache in China has lowered China's exports of corn from 6 million to 4 million (2005). That doesn't mean USDA needs to do the same, but they may raise the estimate for US corn exports and lower carryout because of cuts in China's exports," said Dan Cekander, analyst for Chicago-based trade house FIMAT Futures.
The US Department of Agriculture (USDA) at 8:30 am EST (1330 GMT) on Friday will release its March supply/demand reports and an average of analysts' estimates pegged the US corn ending stocks for the current 2005/06 marketing year that ends on August 31 at 2.334 billion bushels, below the government's forecast in February for 2.401 billion.
That's still a lot of corn for livestock producers, exporters and ethanol makers to chew through. But it's also the first time in roughly two years that the corn stockpile in the United States may be on the wane instead of growing.
Back-to-back bumper crop years in the United States have kept the mountain of corn growing from only 958 million bushels two years ago and left corn prices floundering around four-year lows.
"It is a possibility they will reduce the exports out of China. If they do, they will have to increase our exports," said Sid Love, analyst for Kropf Love Consulting, Kansas City.
According to the USDA, China exported over 7.5 million tonnes of corn just 2 years ago but may be an importer of 1.0 million tonnes in 2006/07 driven by the growth in the livestock sector and expanded ethanol production.
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