Issued by Darrel Good, University of Illinois
The USDA's estimate of Dec. 1, 2012 inventories of corn, to be released on Jan. 11, 2013, will be one of the more important factors influencing the price of old crop corn in the first quarter of the new year.
The estimate of soybean stocks may be somewhat less important because more is known about the level of consumption during the first quarter of the 2012-13 marketing year.
For soybeans, consumption during the first quarter of the marketing year is generally known because periodic export and crush estimates are available. Based on Census Bureau estimates for September and October and USDA inspection estimates through November, exports were near 613 million bushels. That would be slightly less than the record large exports of two years ago.
Based on estimates from the National Oilseed Processors Association, the domestic crush during the first quarter was near 448 million bushels, the largest in five years. Feed, seed, and residual use during the first quarter is highly variable, but averaged 115 million bushels in the previous 10 years. Total consumption during the quarter was likely near 1.176 billion bushels.
The biggest uncertainty about the magnitude of December 1stocks is the size of the 2012 harvest. If the final estimate of crop size is near the November forecast, December 1 stocks would have been near 1.97 billion bushels, 400 million smaller than the inventory of a year earlier.
As indicated in an earlier newsletter, previous years with yield forecasts following the pattern of 2012 provide little direction for forming expectations about the January yield estimate this year.
The magnitude of corn stocks on Dec. 1 will reveal the magnitude of consumption during the first quarter of the marketing year and the amount of corn available for consumption during the final three quarters of the year. In essence, the stocks estimate will reveal whether the small 2012 crop is being sufficiently rationed.
The magnitude of stocks will be influenced by the final estimate of the size of the 2012 crop. Due to the severity of the drought, there is some expectation that the USDA's December survey revealed fewer acres harvested for grain than was forecast in November.
Like soybeans, previous years with corn yield forecasts following the pattern of 2012 provide little direction for forming expectations about the January yield estimate this year. The uncertainty about the final production estimate is one of the factors that makes it very difficult to anticipate the magnitude of December 1 stocks.
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 four million bushels in the first two months of the year. The magnitude of imports in November is not yet known.