How low is USDA willing to go with corn carryover?
Apr 05, 2012
From The Editor
April 5, 2012
Hello Pro Farmer Members!
And Happy Easter! What a wonderful time of the year!
It's been an interesting day... started really early this morning so I could get in and get a good start on the front page of this week's newsletter. After that... I was back home by about 8:30 to finish replacing a hydrant up at the barn so we could get water rolling again. Then after refilling the hole, backing the backhoe out of the feed yard and rebuilding some fence, it was back to the office to finish up the letter. Got that done... then Brian Grete and I recorded (after many "technical issues") a segment for use this weekend on AgDay and/or US Farm Report.
I know... that might sound like a normal kind of day for you, but it was plenty busy for me and kept me away from keeping a close eye on the markets (which sometimes isn't such a bad thing).
For the TV work, Brian and I talked about the April 10 Supply & Demand Report. In this week's newsletter, we've got our latest updates to the Supply & Demand tables for corn, soybeans and wheat. In it, we've got old-crop corn carryover estimated at 681 million bushels. Demand is solid enough to drop carryover to that level, but neither Brian nor I are certain USDA will lower carryover from the March estimate of 801.
Last year, USDA dropped carryover to 675 million bu. and just didn't seem to want to drop it any lower than that. This year, it feels like that number is 800 million bushels. But, as Brian says, "We'll find out what the low-water mark is for old-crop corn carryover within the next two reports." That should prevent heavy selling pressure in old-crop corn futures until we know just how low USDA is willing to drop carryover.
Looking to the 2012-13 marketing year carryover for corn, we had to go with our first estimate at just over 1.5 billion bushels. That seems like a big number, but if we harvest 88.2 million of the 95.9 million expected to be planted and after "jacking up" the new-crop usage estimates, that's where we see new-crop supply at the end of the 2012-13 marketing year.
That's it for this week...
Again... have a Happy and Blessed Easter!