With old-crop carryover now estimated at 1.181 billion bu. (and likely to increase after the Quarterly Grain Stocks Report), 2012-13 beginning corn stocks will likely be viewed as “adequate.” Despite pitiful corn yields in the Corn Belt, the bigger old-crop carryover with today’s high corn price should be a powerful enough combination to hold 2012-13 corn carryover above 650 million bu. for the next few months.
That should be enough corn to keep corn-based ethanol use mandates in place. Of course, EPA’s annual review of the Renewable Fuels Standard’s (RFS2) mandated usage levels in November could still result in adjusted usage levels for the year(s) ahead.
While estimated corn supplies should push ethanol-use waiver requests to the sidelines, it could also unfortunately remove too-much focus from the RFS2.
Policy that creates uncertainty isn’t “good policy” and the RFS2 is full of uncertainty. As we discussed on News page 4 of last week’s newsletter, now is the time to do a complete assessment of the policy — something that was missing when it was originally written (RFS) and again when it was “beefed up” (RFS2).