With increased demands from the U.S. beef and ethanol industries, U.S. Corn supplies have reached a 15-year low and may be smaller than the government forecast last month, reports Businessweek. Stockpiles on Sept. 1, before the harvest, will drop 66 percent from a year earlier to 589 million bushels, a Bloomberg survey of 30 analysts showed. That’s 13 percent less than a March 10 estimate by the U.S. Department of Agriculture, which will update its forecast today. Tightening supply led Goldman Sachs Group Inc. to raise its corn-price forecast last week.

About 40 percent of the crop is used to make ethanol. Corn futures have more than doubled in the past year to its highest levels since July 2008, as rising pork and beef prices encouraged demand from livestock producers and as U.S. export-sales expanded at the fastest pace in three years.

“Ethanol demand is strong, and rising cattle prices have been offsetting increased costs of feed,” said Shawn McCambridge, the senior grain analyst for Prudential Bache Commodities LLC. “At this point we haven’t seen a lot of evidence that prices are having a negative impact on demand.”

Goldman analysts Damien Courvalin and Jeffrey Currie said corn would rise to $8.60 in three months, compared with a previous forecast of $6.20, according to a report to clients April 1. The bank also raised its six-month outlook to $7.80 from $6 and its 12-month estimate to $7 from $5.80. Goldman advised consumers and investors to buy futures for December delivery traded in Chicago.

Global corn inventories probably will fall to 120.3 million metric tons, down 2.3 percent from last month’s USDA’s forecast, according to the Bloomberg survey.

To rebuild corn stockpiles, “we need the combination of a good crop and lower usage, and it’s going to be tough to get both,” said Christian Mayer, a market analyst at Northstar Commodity Investments Co. in Minneapolis.

Source: Businessweek