Corn futures in Chicago rose to all-time highs for two consecutive days, coming just shy of the $8 mark, as the USDA data fueled supply concern. The USDA’s outlook is “potentially explosive” for corn prices, livestock analysts Steve Meyer and Len Steiner said in a June 10 report.
A primary feed ingredient for most of the livestock industry, corn typically comprises two-thirds to three-fourths of the rations to fatten chickens, pigs and cattle to slaughter weight.
A wet, cold spring delayed fieldwork in parts of the Midwest, prompting the USDA to cut estimated corn plantings 1.6 percent from a previous forecast, to 90.7 million acres. More troubling for livestock feeders, the USDA slashed its forecast for corn stockpiles near the end of the 2012 summer by 23 percent from an earlier projection. Supplies are already expected to reach a 15-year low at the end of this summer.
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