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Corn+Soybean Digest

USDA Seen Cutting Corn Carryout 9%

The grain trade is looking for a substantial reduction in the projected 2007-2008 U.S. corn carryout and modest increases in soybean and wheat ending stocks when USDA releases its latest monthly supply/demand update on Wednesday morning.

Those expectations are based on last Monday’s quarterly Grain Stocks Report, which showed lower-than-expected March 1 corn stocks and higher-than-expected soybean and wheat stocks.

Trade estimates of 2007-2008 U.S. corn ending stocks average 1.303 billion bushels in a range from 1.138 to 1.427 billion, compared with USDA’s March estimate of 1.438 billion bushels and last year’s carryout of 1.304 billion, according to a survey taken by Dow Jones Newswires.

USDA’s March 1 corn stocks figure of 6.859 billion bushels, which was below the range of trade expectations, implied stronger-than-expected feed/residual use.

A strong export pace suggests USDA could boost projected corn exports a bit further, as well.

There’s a chance, however, that increased corn feed/residual use and exports could be partly offset by a drop in the estimate of corn used for ethanol production.

Estimates of the U.S. soybean carryout average 157 million bushels in a range from 120 to 180 million bushels, compared with USDA’s March estimate of 140 million and last year’s record-high carryout of 574 million bushels.

USDA is expected to cut residual soybean usage based on its March 1 soybean stocks estimate of 1.428 billion bushels, which was above the range of trade estimates.

However, USDA could further raise projected U.S. soybean exports based on continued strong export sales and delays to Argentine export shipments caused by the recent farm strike in that country.

Trade expectations for U.S. wheat ending stocks average 261 million bushels in a range from 237 to 282 million bushels, compared with USDA’s March estimate of 242 million bushels and last year’s 456-million-bushel carryout.

USDA’s March 1 wheat stocks estimate of 710 million bushels was above the range of trade expectations and suggests USDA will have to revise its feed/residual usage for wheat downward moderately and probably will also have to trim domestic food usage slightly.

Continued strong U.S. wheat export sales should limit any increase in USDA’s wheat carryout projection.

Editor’s note: Richard Brock, The Corn And Soybean Digest's Marketing Editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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