(Adds details on soy supplies, corn demand, price reaction, analyst quote)
CHICAGO, June 10 (Reuters) – U.S. corn supplies will fall to an eight-year low due to rising demand from the ethanol and export sectors, the government said on Thursday.
But the soybean stockpile will be bigger than expected as high prices have cut into demand for soyoil and soymeal, reducing the amount processors will need to crush, the U.S. Agriculture Department said in its monthly World Agricultural Supply and Demand Estimates report.
Chicago Board of Trade corn futures surged to their highest in nearly a month after the report was released while soybeans sank 1.2%.
The report marks a shift in supply concerns away from soybeans, which are crushed into animal feed and increasingly used for renewable diesel, to corn that is being scooped up by China and is the main ingredient in ethanol biofuel.
“Beans came under a significant amount of pressure because USDA cut the crush,” said Ted Seifried, chief ag market strategist at Zaner Group. “That’s the one number nobody thought we could ever cut. Maybe we don’t run out of beans before the end of the marketing year.”
USDA said that corn ending stocks in the 2020/21 marketing year that ends Aug. 31 will fall to an eight-year low of 1.107 billion bushels, down from its May outlook for 1.257 billion bushels. For 2021/22, corn ending stocks were seen at 1.357 billion bushels compared to the May forecast for 1.507 billion bushels.
Soy and corn crops have been mostly planted and will be harvested starting in September.
Demand from both the ethanol and export sector was raised by 75 million bushels in the current marketing year, with ethanol processors seen needing 5.05 billion bushels of corn while exporters will ship 2.85 billion bushels of the yellow grain overseas.
Analysts had been expecting the report to show corn ending stocks of 1.207 billion bushels in 2020/21 and 1.423 billion bushels in 2021/22.
Soybean ending stocks for 2020/21 were bumped up 15 million bushels to 135 million, which would still be the lowest in seven years. For 2021/22, USDA pegged the soybean stockpile at 155 million bushels, also up 15 million bushels from the May outlook. (Additional reporting by Karl Plume; Editing by Richard Chang)