Corn stockpiles are reaching record lows even as demand is reaching record highs.
Global stockpiles of corn are expected to reach their lowest numbers since 1974, in spite of a fifth consecutive year of record corn harvests, due to increased demand and weather-induced yield decreases, according to reports.
Global inventory may be reduced to 47 days of use, according to experts, even as consumption is estimated to rise 3% in the next year, adding to a 16-year trend that has so far resulted in an overall increase of 66%. China alone is expected to increase its demand by 47% compared to numbers a decade ago. “There is a storm developing in agriculture,” said Jean Bourlot, global head of commodities at UBS AG. “If we have the slightest disruption in any part of the world, the effect on the price will be considerable.” The reduced inventory has been exacerbated by recent weather in the U.S., which delayed planting and resulted in acreage losses.
Corn prices have reached an average of $7.02 per bushel since Dec. 31, and futures are reaching record highs — in early June, Hussein Allidina, head of commodity research at Morgan Stanley, said numbers could hit $9 per bushel if current conditions continue. July futures as of 12:30 p.m. EDT on June 21 stood at $7.074 per bushel.
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