Seed Times- June pdf - Page 9



Based on the USDA’s Grain Crushings and
Co-Products Production reports for March and
April and on the EIA weekly estimates of ethanol
production during May, corn used for ethanol
production during the third quarter of the marketing year is estimated at 1.347 billion bushels.
Corn used for other domestic industrial products is estimated at 362 million bushels.
Cumulative export inspections during the first
three quarters of the marketing year totaled
1.549 billion bushels. Through April, Census
export estimates exceeded export inspections
by 149 million bushels. If that margin continued through May, exports during the first three
quarters of the year totaled 1.698 billion bushels
and indicated exports during the third quarter
at 566 million bushels.
For the marketing year, the USDA projects feed
and residual use of corn at 5.3 billion bushels.
Feed and residual use during the first half of the
year totaled 3.487 billion bushels.
Use during the last half of the year needs to
equal 1.813 billion bushels for total use to reach
the USDA projection. Third and fourth quarter
feed and residual use vary substantially over
time. Feed and residual use near 954 million
bushels during the
third quarter this
year sits close to
the center of the
range based on the
historical data.
With March 1
stocks of 8.605
billion bushels and
imports during the
quarter of 8 million
bushels, the esti-
mates of consumption during the quarter point
to June 1 stocks of 5.384 billion bushels, 79 million larger than stocks of a year ago. A deviation
from June 1stocks less than 100 million bushels
from the current estimate will not engender
much price movement. The Acreage report on
June 28 should overwhelm any information in
the stocks report.
Uncertainty about corn acreage looks to remain
in place through the summer. Weakening demand should not be a hindrance to a continued
price rally since the supply situation is quite
dismal.
Strengthening corn basis and futures prices
point to marketing strategies involving delayed
pricing of the new crop. Price objectives need to
be set to take advantage of current corn market
dynamics.
Managing crop price risk can be accomplished
with a variety of marketing strategies. It is essential to have a marketing strategy since supply shocks provide a limited time frame to take
advantage of pricing opportunities. The strategy
probably should include plans for pricing some
of the 2020 crop.
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