After a bumper corn harvest last year for the U.S., stockpiles are rising at their fastest rate in nine years. This spring, optimal planting conditions allowed U.S. farmers to plant 91.71 million acres of corn – more than the 91.69 million acres estimated by the U.S. Department of Agriculture (USDA) in March, and Goldman Sachs predicts that prices will fall 9.5% to reach $4 within six months. U.S. corn inventories on June 1st jumped 35% to 3.723 billion bushels (94.6 million tons) – the biggest stockpile since 2005 according to a Bloomberg survey. With 30% of the 2013 crop still to be sold, farmers have only sold 8% of this year’s crop, compared with the average over the past five years of 35%. Although these figures are high, demand for feed from the beef, pork, and chicken sectors combined with a 3% increase in ethanol production are expected to account for some of the surplus. Globally, China is expected to produce a record 223 million tons of corn this year and overall global production is expected to push reserves to a 15 year high.
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