Corn Stockpile Estimates Cut by USDA for 2012

Projections for corn stockpiles in the United States has been lowered by the U.S. Department of Agriculture for 2012.

The downwardly revised U.S. corn stockpile estimates come from the continuing dry weather in South America, especially Argentina, which will probably result in inventories being down because of exports going up as countries gravitate to the American corn supply to make up for the shrinking South American corn yield.

Officials at the USDA slashed expected 2012 domestic corn inventory to 801 million bushels, a drop of 5.3 percent.

Argentina corn production estimates were cut by the USDA to 22 million metric tons, a decline of 15 percent. Brazil, which analysts had believed would also have corn production estimates lowered by the USDA, was kept the same, although that could be downwardly revised as the impact of weather conditions on the corn yield are clearer.

Since the middle of December, corn prices have climbed about 10 percent, in response to the first news reports dry weather was having a significant impact on the South American corn crop.

The second-largest producer of corn in the world, behind the United States, is Argentina.