April 5 (Reuters) - U.S. corn supplies are expected to fall to a fresh 16-year low before the fall harvest, said analysts polled by Reuters, signaling there will be razor-thin supplies this year that could stoke food inflation and hurt margins for food companies.
Analysts expect USDA next week to cut ending stocks by 10 percent from its March estimate due to increased demand for feed and ethanol in the wake of a severe drought reducing supplies in South America.
Prices for corn will have to rise in order to dampen demand and preserve enough supplies to be held over into the next crop year in the United States, analysts said.
The U.S. Department of Agriculture (USDA) should confirm that scenario in its supply and demand report due out at 7:30 a.m. CDT (1230 GMT) on Tuesday.
An average of analysts' estimates pegged corn ending stocks at 721 million bushels, a 16-year low and down 80 million bushels from the government forecast in March.
Analysts also predict U.S. soybean ending stocks to shrink to 246 million bushels, down 29 million bushels or 10.5 percent from USDA's March forecast of 275 million.
