Market factors continue to push, pull in corn market

Corn Report
By Jason Sagebiel | April 16, 2013

April 1—Values imploded at February month-end as corn stocks were much greater than expected. New crop corn acres were in line with what the trading community anticipated, however, values collapsed on the devaluation of old crop acres. The USDA placed corn March 1 stocks at 5.40 billion bushels, 380 million bushels above expectations. This suggests that December corn stocks were skewed as the new crop corn last year was harvested earlier and, possibly, demand may not be as high as anticipated. That very well could be as distillers grains continues to remain at historically high prices relative to corn, and other feedstuffs continue to trade at higher-than-normal values. So the high price of corn has been able to price itself out of the feed market and the world market. Theoretically, one could assume carry-out would increase by about 300 million bushels but the USDA may not make it that simple. Nonetheless, this could assume a 900-plus million bushel carryout if no increases are made in ethanol or the export demand.

New crop corn acres were estimated at 97.282 million acres, up 127 million acres from a year ago. Acreage in Iowa was estimated to be unchanged from last year while Illinois is expected to reduce corn plantings by 600,000 acres and Minnesota and North Dakota increase acreage by 250,000 and 500,000 respectively. The Delta states and Texas  are expected to plant about 1 million more acres than a year ago at the expense of cotton, although this could alter slightly.