Expect corn rationing, possibly in ethanol, feed uses

Corn Report
By Jason Sagebiel | July 11, 2013

July 1—The USDA placed June 1 corn stocks at 2.76 billion bushels versus 5.4 billion bushels on March 1 and 3.14 billion bushels a year ago. Disappearance was 2.63 billion bushels from March to June as compared to 2.875 billion bushels last year and 2.853 billion bushels in 2011. The disappearance from June to September the past three years averaged 2.51 billion bushels. If that were the case, there is very little corn to hold the market to new crop harvest. This would imply the inversion in old crop would remain strong through the summer. This market will need to ration and that may come in the form of ethanol or feed (wheat feeding). With the lower stocks, one would perceive a lower ending carry-out in the July supply and demand report.

The USDA placed corn-planted acres at 97.4 million, up from 97.379 million in March and 2 million higher than the average trade guess. New crop corn faded fast on the release of that data. In some key areas, the USDA added acres while acreage loss was noted in some states. The acres expected to be harvested this fall are 89 or 91 percent of what is planted. Note that this planting number for corn was as of June 1, thus a possible revision could come early this fall. With 89 million acres harvested, which is actually lower than what the March report reflected, a yield of 150 million acres still nets a production figure of 13.370 billion bushels and 12.85 billion bushels of demand.