Corn inventories on December 1st were the lowest post-harvest stockpile since 2003 at 8.22 billion bushels (208.8 million metric tons). Corn futures surged in 2012 as the drought continued and then fell 18% as U.S. exports slowed and buyers sought cheaper corn from Brazil and Ukraine. However, harvests seem to have been overestimated and the U.S. Department of Agriculture already expects global stockpiles of corn to be the smallest relative to consumption since 1974 by October 1st as estimates for production from Argentina are cut by 1.6 million tons. U.S. production for 2013 is expected to increase by 14.83 million bushels – 38% more than the previous year. The U.S. hog breeding herd has expanded at a time when analysts expected it to contract rising to 5.817 million head and poultry production has increased 5.9% to 5.405 billion pounds causing demand for corn from livestock producers to rise to 1.9 billion bushels in the three months ending December 1st. Cash markets are also indicating strengthening demand. Exporters in New Orleans are paying .62 cents over Chicago futures and Chicago grain merchants are paying a 19.5 cent premium for deliveries before the end of the month.