"I don't see a robust year for exports whatsoever. I wouldn't be surprised to see something around a 1.2-billion-bushel program. The first rationing is going to be done on what moves beyond the borders, not within the borders," McCambridge said.
Livestock feeders first to squeal
Predicting the amount of corn being used by livestock and poultry producers has always been challenging because the USDA releases corn stocks data only on a quarterly basis.
With the advent of the Internet, forecasters have access to scores of local corn and livestock prices, which help them get a clearer picture of profitability among meat and dairy producers.
But as corn prices climb and supplies become harder to source, producers are prone to explore alternatives such as feed wheat or replace a portion of their feed rations with something cheaper like soybean hulls or wheat middlings.
Domestic livestock and poultry producers, traditionally the largest consumers of corn, have seen their share shrink from more than 60 percent two decades ago to just 37 percent due to ethanol.
They have been squeezed by high corn prices. However, other than an increased sow slaughter, a sign of herd downscaling by the pork industry, there has been little liquidation of hogs, cows and chickens.
Some livestock and poultry operations in the southeastern United States have imported corn from Brazil while cattle feeders in the southwest have brought in Canadian feed wheat, but the volumes have been relatively minimal.
More imports are likely as long as corn prices remain elevated, but shipping costs may be prohibitively high in many cases, likely limiting imported volumes.
In the meantime, feed users are likely to maintain a hand-to-mouth corn-buying strategy, extending coverage on price dips and trying to minimize losses.
But the months ahead will be challenging, particularly for cattle operations. The longer life cycle of animals makes it difficult to change course when market conditions turn sour.
"The real question is not how much demand will drop with each dollar rally in the corn market, but what is the margin difference when you rally corn by a dollar, live cattle rally and feeder cattle drop," said Tregg Cronin, a market analyst with Country Hedging.
"You run all these crushes and margin calculations on a rolling basis and as long as you can pencil a margin, you have to assume that the demand center is going to use corn. It's a lot more art than science."