The USDA projects feed and residual use of corn during the current year at a modest 4.6 billion bushels. While use during the first half of the year suggests consumption could exceed the projection, declining cattle numbers, increased wheat feeding, and more new crop corn feeding point to a slowing of use during the last half of the year. Some modest expansion in livestock production other than beef, less wheat feeding next summer, a lack of increase in distillers grain production, some new crop corn feeding in August, and lower corn prices support prospects for more corn feeding next year. Feed and residual use might be near 5 billion bushels.
U.S. corn exports during the current year are projected at a relatively low level of 1.7 billion bushels, reflecting in part competition from the large world grain crop of last year. Prospects for less competition from Argentina and perhaps from the Black Sea region next year, along with larger imports by China, point to a rebound in exports to near the long term average of 1.9 billion bushels.
With food, seed and industrial use (excluding ethanol) near 1.425 billion bushels, total consumption next year might be near 13.325 billion bushels. With beginning stocks of 800 million bushels and imports of 15 million, stocks at the end of the 2012-13 marketing year would be near 1.79 billion bushels. Stocks at that level would represent a stocks-to-use ratio of 13.4 percent. Under this scenario, the 2012-13 marketing year average price would be expected to be in the $4.50 to $5.00 range.
The USDA’s May 10 WASDE report will contain a forecast of the 2012-13 supply and demand balance for corn. A larger production estimate than used here will likely be reflected in that forecast as March acreage intentions, and probably a higher yield forecast, will be used.