* USDA cuts world wheat forecast for fourth month in a row
* U.S. corn stocks/use ratio lowest in 15 years-USDA
* Rise in corn futures buoys wheat, soy down 1.4 percent
* USDA sees record-high farm-gate corn price in 2010/11
* Higher costs likely for meatpackers and foodmakers
(Rise in corn also boosts wheat futures, adds closing prices)
By Charles Abbott
WASHINGTON, Sept 10 (Reuters) - U.S. corn supply will
shrink to its tightest in 15 years next year due to strong
global demand and a smaller-than-expected crop hit by hot, dry
weather, the Agriculture Department said on Friday in forecasts
that stoked corn prices but tempered wheat.
While painting an unexpectedly tight picture for a corn
market that has already surged more than 40 percent since late
June, the USDA cut its wheat supply forecasts by less than
expected, allaying fears that the world was headed for a repeat
of the 2008 food-fear crisis.
The USDA cut its forecast for the U.S. corn stockpiles to
1.116 billion bushels (28.4 million tonnes) by the end of
2010/11, down 15 percent from its report a month ago and a
nearly 20 percent decline on the year.
That put the stocks-to-use ratio at 8.3 percent, or about
the equivalent of one month's consumption, the smallest since
1995/96. [ID:N07254444]
With the fall harvest under way, USDA cut its U.S. corn
crop forecast by 2 percent to 13.16 billion bushels (334
million tonnes) -- a bit below forecasts for 13.2 billion
bushels -- due to hot, dry late-summer weather that helped
prices rise by nearly 17 percent since August.
USDA cut its forecast of the world wheat crop for the
fourth month in a row, but its forecast of 643 million tonnes
was not as low as expected. USDA lowered its forecasts for
Russia's wheat harvest by 2.5 million tonnes from August and
the European Union's by 2.4 million tonnes. [ID:N10224730]
USDA lifted its forecast for the U.S. soybean crop by 1
percent from its August estimate.
The world wheat crop would be the smallest in three years,
since fears of a food shortage were rampant.
But supplies are far larger than in 2008 and USDA raised
its forecast of 2010/11 wheat end stocks by nearly 2 percent,
to 177.79 million tonnes, due to larger supplies in Canada.
U.S. farmers "are in an economic sweet spot" of large crops
and high prices "and we think this will persist well into
2011," said analyst Mark McMinimy of Washington Research Group.
"Downstream users, however, such as meat processors and baking
companies and food manufacturers will likely labor under higher
input costs."
CBOT December corn futures CZ0 settled up 7-1/2 cents at
$4.78-1/4 on Friday, with the tighter supply forecast buffered
by a lower-than-expected weekly export sales total.
December wheat WZ0 settled 1-1/4 cents at $7.36 and 3/4 a
bushel. November soybeans SX0 ended lower 15 cents at $10.31
a bushel. While USDA forecast larger supplies than traders
expected, export sales for wheat and soybeans were above
expectations.
