Federal forecasters are expected to trim their estimate for U.S. corn and wheat inventories this week due to a smaller-than-expected harvest.
Soybean supplies, however, are likely to grow as export demand remains sluggish.
The U.S. Department of Agriculture is scheduled to release its latest forecast for production, inventories and demand on Wednesday at 8:30 a.m. EST (1330 GMT).
The USDA in its monthly crop report will forecast the corn harvest at 12.402 billion bushels, down 0.2% from its October estimate, according to 22 analysts surveyed by Dow Jones Newswires.
A smaller U.S. crop and strong domestic demand is expected to trim the USDA’s end-of-year supply projections as well. Solid processing margins for ethanol producers and continued demand from the livestock industry are strong draws on U.S. corn supplies, offsetting slower-than-expected export demand, said Don Roose, president Iowa based brokerage U.S. Commodities.
The USDA is expected to lower its estimate for corn inventories as of Aug. 31, 2012, when the crop year ends, to 801 million bushels, down 7.5% from the USDA’s October estimate.