Corn numbers out: AP, Growth Energy duel over significance

April 11, 2011 |

In Washington, Growth Energy looked at the latest World Agriculture Supply and Demand Estimate from the USDA, and noted that world stocks of corn are on the increase, despite tight US supplies. “Fear in the market that the carryout number would go down didn’t come to fruition,” said Growth Energy CEO Tom Buis. “Now there is still a lot of volatility in the market, based on rumors of increasing sales to China, excessive speculation and profiteering in the commodities market.”

Despite an Associated Press headline: “US corn reserves expected to fall to 15-year low,” the USDA did not alter stocks from the January estimate. The more alarming stats in the report, which received minimal press attention, include the continuation of a trend of strong commodities import growth from China. Since two years ago, the booming Chinese economy increased imports of cotton from 7 to 15 million tons of cotton, and in the same period increased soybean imports by 38.9 percent, from 41.04 million tons to 57 million tons.

The Digest’s take

How much land is being tied up? For comparative purposes (just for the purpose of generating metrics), let’s convert those Chinese soybean imports numbers into equivalent feed and fuel production numbers. Those 13 million acres (using US productivity rates), had they been devoted to field corn production, could have increased feed stocks by 232 percent.

Despite the alarmist AP report, US production (estimated at 330.23 MT) was unchanged in April, and projected stocks were increased to 20.94 from 20.80 MT. Global production was projected at 1084.12 MT, up from 1079.66 MT, and stocks were increased by 155.72 MT up from 154.88

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