Fresh U.S. government data rattled corn markets on Wednesday, sending futures prices soaring 9% and raising questions about the precision of earlier estimates.
Analysts said the reduced stocks might be a sign that 2009 production was overstated.
Some traders said the storage report confirmed chatter that livestock and ethanol producers are burning through more corn due to the relatively poor quality of the 2009 crop.
“This is in fact the first real write-down of last year’s corn production that we have seen from them,” said Nick Kouchoukos, director of information services at Lanworth, Inc., a Chicago-based company that relies in part on satellite imagery.
Lanworth’s 2009 crop estimates have been well below the USDA’s outlook since last summer. The company said the crop had a shortened yielding period due to delayed planting and suffered frost damage. Based on its surveys among elevators and weather models, it has projected a supply 8% lower than what the USDA said.
The USDA will issue a more detailed look at usage in its monthly supply and demand report to be released on July 9.
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