Wisner concludes by saying the short corn crop has already reduced ethanol and export use of US corn, but not feed use, despite higher prices. And he says without that, corn supplies could be tighter than already indicated. He will be watching for the next quarterly grain stocks report at the end of March, along with livestock inventory, and marketing weights to determine if the second quarter corn disappearance confirms any change in the trend from the first quarter.
He says export demand has been weak and if the global market wants Brazilian corn it will have to sort it out from all of the Brazilian soybeans headed to export terminals, which he perceives as an increased demand for US corn to be exported. The two issues that will have a bearing on demand—says Wisner—are the export price of alternative feeds and the potential for any shipping delays. While the latter is unknown, the former points to corn as a bargain:
- $340 for Australian wheat
- $340 for French wheat
- $310 for US soft wheat
- $305 for US corn
Corn stocks will be tight before the end of the current marketing year, causing spot shortages. US livestock feeding has been aggressive in light of short feed supplies, and unless there are cuts in the rate of feeding, livestock feeders will face critical decisions. Exports have been cut back due to high prices, but with the disappearance of alternative feed grains, US corn exports could resume by the end of the marketing year, putting more pressure on the supply.
Source: FarmGate blog