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Vol. 11, No. 66 / April 9, 2013
Following a grain stocks report that was significantly Corn Supply & Use, USDA & April Trade Estimates
different that what trade was expecting, USDA will update to-
morrow, April 10, its grain and meat protein balance 2011/12 2012/13 Projection Y/Y
sheets. A poll of market analysts conducted by Down Jones indi- USDA USDA USDA April Trade % Change
cated that on average analysts expect USDA to revise higher its Estimate Feb Est Mar Est Estimate
estimates of corn ending stocks for the 2012/13 marketing year. million acres
The March 1 quarterly stocks survey pegged March 1 corn stocks Planted 91.9 97.2 97.2 97.2 6%
at 5.4 billion bushels, almost 400 million bushels larger than
Harvested 84.0 87.4 87.4 87.4 4%
what trade was expecting coming into the report. With the sup-
ply side of the balance sheet known (see table), it will be interest- bushels
ing to see how USDA will change its estimates of corn exports, Yield 147.2 123.4 123.4 123.4 -16%
ethanol use and feed use for the current marketing year. Given million bushels
the average of trade estimates per Dow Jones at 824 million
Beginning stocks 1,128 989 989 989 -12%
bushels, the stocks/use ratio jumps to 7.4% compared to 5.6% in
the March report. Production 12,360 10,780 10,780 10,780 -13%
How could the three main demand categories be impact- Imports 29 100 125 125 331%
ed in the April update? Export numbers were lowered signifi- Supply, total 13,517 11,869 11,894 11,894
cantly in the March report, projected to be down 46.5% from a
year ago. Little has changed in corn export volume in recent Feed and residual 4,548 4,450 4,550
weeks but it is likely that the lower prices will increase the quan- Ethanol for fuel 5,011 4,500 4,500
tity demanded in world markets. US corn was trading at a signif- Food, seed, other 1,426 1,387 1,387
icant spread to Argentinean corn in the second half of 2012 and
early 2013. The spread has for the most part disappeared. Com- Domestic use, total 10,985 10,337 10,437
bined Argentina and Brazil corn exports in 2012/13 are currently
Exports 1,543 900 825
projected to be 38 million MT, compared to a little over 20 million
MT out of the US. The main challenge for South America at this Use, total 12,527 11,237 11,262 11,070
Avg.
point is transportation, with wire stories this week noting Brazil Ending stocks 989 632 632 824 Estimate
may import Argentine corn to its Northeast areas even as other
parts of the country have ample supplies. The evolving situation Stocks/Use 7.9% 5.6% 5.6% 7.4%
in China with bird flu continues to be a concern in the overall
the margin but chances are USDA will leave food, seed and other
picture of global feed demand, with trade keeping a close eye on
use unchanged.
the possibility that a full blown epidemic could lead to significant
culling, a net reduction in feed demand and longer term impact Even if corn exports are revised modestly lower, the bal-
on chicken and pork demand in one of the fastest growing mar- ance sheet implies that the feed and residual numbers will
kets for meat protein in the planet. The February corn export likely be revised lower. If the trade estimate of 824 million
numbers down 58% from a year ago and chances are USDA may bushels is correct, and considering our discussion of exports and
lower the final corn export number to 800 million bushels. ethanol above, feed and residual for 2012/13 may be lowered by
about 170 million bushels to about 4.380 billion bushels. This
Ethanol demand will likely be left unchanged. Eth-
would represent a feed/residual decline of 3.7% from the previous
anol production has increased in recent weeks following lower
marketing year. The March 1 grain stocks numbers implied that
corn prices and improving margins. Daily ethanol output which
in the first half of the marketing year feed use was down about
was running about 15% below year ago levels in January and
6%. While there are fewer cattle on feed, the hog and poultry
February now is down 8% from last year. USDA will likely want
numbers are larger than a year ago and they are increasing.
to see a few more weeks of increasing ethanol output before mak-
Broiler egg sets up 1.1% from a year ago. Feed use rationing was
ing any meaningful changes to the ethanol demand part of the
all the talk after the March 1 WASDE report. A month later, it
balance sheet. Other industrial use numbers may be changed at
looks like the job will be a little easier.
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