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  • bluecheese4u bluecheese4u Jun 27, 2013 8:29 PM Flag

    USDA in bull's eye again with key corn stocks report due Friday

    USDA in bull's eye again with key corn stocks report due Friday

    By Christine Stebbins

    CHICAGO, June 27 | Thu Jun 27, 2013 3:06pm EDT

    (Reuters) - Grain analysts are nervously expecting the U.S. Agriculture Department to drop another bombshell on Friday when it issues its U.S. quarterly corn stockpile estimate, a key number they have wildly missed forecasting the past three years.

    The missed forecasts have resulted in wild price moves in the world's biggest grain market, Chicago Board of Trade futures.

    "None of us has a magic bullet. I spend a lot of time trying to figure it out, and ultimately you're completely wrong," said Tim Emslie, grains research manager for CHS Inc, the largest U.S. farm cooperative and a major corn hedger.

    Four times a year the USDA surveys commercial grain firms, country elevators, processors, and farmers to report on the amount of corn held in storage, a key economic indicator the grain trade uses to project the actual amount of corn on hand before the autumn harvest.

    The United States is the world's largest grower and exporter of corn, which is also the largest cash grain for farmers. So USDA's grain stocks estimates for decades have been a bellwether for the futures market to adjust prices to market fundamentals.

    But in recent years the calculus has grown trickier. Drought and other weather factors have jolted production and use. Export demand has surged as China tapped more U.S. supplies. Most importantly, a major new domestic corn consumer has appeared - ethanol makers, who last year ate up a full 40 percent of the corn crop from well below 10 percent a few years ago.

    Corn itself is the main feed grain for U.S. livestock. But ethanol plants have muddied that picture by mammoth production of a byproduct called distiller's dried grain (DDG) - also now used as a feed and feed export. Cheaper competing grains like wheat have also thrown in another wild card to calculations.

    The biggest miss in analysts' corn sto

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