Alarming Low Levels of Corn

Implications: China confident of its grain supply but not within the US according to Allendale Inc's research. The likelihood of China importing corn from the US is growing weaker.

Analysis:  USDA has released its first official 2008/09 World Agriculture Supply and Demand Outlook, the report confirmed our Allendale Inc estimates from our January 19th annual outlook conference with regards to the days supplies of wheat, corn and rice.
            The world days supplies of wheat and rice are projected to increase with corn now on a four year slide. The days of these world starches find an increase from 2007/08 to 2008/09 of 64 to 70 for wheat, 67 to 71 for rice and decrease in corn from 51 to 46. The 46 day supply is the smallest, dating back to 1999/2000 which then registered 104 days.
             Alarming is the days supply of US corn is extremely thin at only 22. Dating back to 1999/2000 US corn supplies have never been less than a month. 2003-04 recorded 34 days and was the tightest before Friday’s (05-09-2008) USDA projections were unveiled. 2007/08 days supply of corn is 39 suggesting the number of days of supply may experience a reduction of 17 which is slightly less than the 18 day drop from 2001-02 to 2002-03.
        With regards to the number of days supply of US rice, 2008/09 is estimated at 28 days, the lowest on record dating back to 1999/2000, with its peak of 67 days in 2005/06. Allendale’s research estimates for the 2008/09 marketing year, China holds 33% of the world wheat stocks, 28% of the world corn stocks, 48% of the world rice stocks but only 5.7% of the world soybean stocks.