Because of the higher stocks corn prices expected to be paid for feed were reduced by 30-cents per bushel on the low end of the USDA price range and by a dime on the top end with the mid-point for the marketing year reset to $6.90. However, at the end of the corn marketing year in August, available supplies of the old crop are expected to be down to 757 million bushels, and available supplies of the new crop will be minimal. In 2012, early planting resulted in abundant supplies of corn in August, but the weather delays for planting the 2013 crop will push harvest back. And some farmers may be opting for soybean planting instead of corn if the planting season continues to be challenged.
Livestock feeders may see a wider variation of supplies, depending on their location. States that were hurt by the 2012 drought had been seeing progressively higher acreages of continuous corn being planted. But those were the hardest hit by the drought and most of those farmers have indicated intentions to reduce corn acreage and plant a more weather-resistant crop rotation.
Illinois farmers are planning a 5 percent reduction in corn acres, and across the Corn Belt states from Iowa to Ohio a more than 900 thousand acre drop is expected. However, the Great Lakes states, along with the Southern Plains, the Delta, and the Southeast are increasing corn acres by more than is being lost in the Corn Belt.
The result may be earlier planting of more acres in Gulf Coast States could have the potential to supply early corn, if it can be accessed.
Reduced corn supplies from the 2012 crop pushed many livestock feeders toward sorghum, where stocks are lower as a result, but not as low as possible because of increased sorghum imports. Disappearance has increased due to feeding and stocks in both on-farm and commercial storage is down. Feeders are well aware of high sorghum prices, since the midpoint of USDA’s price range is $6.85 and is the highest on record.
Domestic use is higher due to lower corn supplies, and imports have bolstered stocks. The stocks are higher than in 2012, due to a better production year. Barley production enjoyed the better weather that fostered increased corn production in Minnesota and the Dakotas were record corn yields occurred in 2012.
Livestock feeders who have been challenged in finding supplies and paying for them, have benefitted from increased stocks of corn and lower prices due to USDA’s reports at the end of March. While those supplies will be tight through August, and Corn Belt weather has delayed planting, early planting has occurred in the Gulf States which may supply needed corn in early August.
Due to high prices of old corn, exports have been reduced, but the $1 drop in corn prices since the end of March has also meant increased competition for corn from the ethanol industry. 2013 acreage will increase, but not in the Corn Belt, where many farmers will return to traditional crop rotations.
Source: FarmGate blog