“The uncertainty about the final production estimate is one of the factors that makes it very difficult to anticipate the magnitude of Dec. 1 stocks,” Good said. “In addition, the magnitude of stocks will be influenced by the imports of corn during the first quarter of the marketing year. For the year, the USDA has forecast imports of 100 million bushels, compared to about 30 million in each of the previous two years. The Census Bureau, however, reported total imports of only 4 million bushels in the first two months of the year. The magnitude of imports in November is not yet known,” he said.
Based on Census Bureau estimates through October and USDA inspection estimates through November, exports during the quarter were near 215 million bushels. Exports during the quarter were 190 million bushels less than during the first quarter a year ago and the smallest in 41 years. Based on the estimate of ethanol production during the first quarter of the 2012 corn marketing year, and the assumption that processing for other uses proceeded as forecast by the USDA, total domestic processing use during the quarter was near 1.48 billion bushels. That is 135 million bushels less than use during the first quarter last year.
Good said that the rate of domestic feed and residual use of corn is not known but will be revealed by the magnitude of Dec.1 stocks. Total disappearance during the quarter, minus exports and domestic processing use (estimated here at 1.695 billion bushels), equals feed and residual use.
“Anticipating the level of feed and residual use is difficult because the level of use in that category during the first quarter of the year varies considerably,” Good said. “Implied use varied by 250 million bushels the previous two years and by 565 million bushels in the previous five years. Use this year is even more difficult to anticipate due to the harvest of an estimated 1.2 billion bushels of corn before the start of the marketing year on Sept. 1. Some of that corn was presumably consumed before Sept. 1, but will be revealed as consumed after Sept. 1. That expectation is supported by the unusually small estimate of corn in the feed and residual category during the final quarter of the 2011-12 marketing year. Even then, Sept.1 stocks of old crop corn were smaller than expected,” he said.
Good concluded that the magnitude of Dec. 1 corn stocks cannot be forecast with confidence and expectations will likely be in a wide range. However, the potential for a smaller 2012 production estimate and a large level of implied feed and residual use point to relatively low inventories and the need to slow the pace of corn feeding.