Friday, June 26, 2020

Upcoming Report: How Much Corn Is In Storage

This and the WASDE in July's second week have the potential to move markets around.
From the University of Illinois' FarmDoc Daily, June 22:

Anticipating June 1 Corn Stocks 
The USDA releases the June 1 corn stocks estimate on June 30.  Typically, the Acreage report published on the same day eclipses the quarterly grain stocks report.  While the Acreage report remains crucial for price expectations this year, the grain stocks report looks to hold some essential information on feed and residual levels for the current marketing year.  The drop in ethanol production and severe supply chain issues with livestock markets creates an expectation of expanded feed and residual use during the quarter.  This analysis presents an estimate for June 1 corn stocks under current feed and residual use estimates during the marketing year.

The supply of corn available as of March 1 is the base for estimating June 1 stocks.  Corn stocks at the beginning of the quarter totaled 7.953 billion bushels in the March Grain Stocks report.  Currently, the Census Bureau estimates for corn imports are only available through April.  In the first half of the marketing year, corn imports totaled 14.2 million bushels.  Imports for the third quarter might have been around 7 million bushels.  By combining imports with the beginning stocks, the total available supply for the second quarter comes in at 7.960 billion bushels.

An estimate of corn exports for the third quarter is based on the cumulative weekly export inspections estimate available for the entire quarter.  Cumulative export inspections through May totaled approximately 1.096 billion bushels.  During the first eight months of the marketing year, total Census Bureau corn exports came in 74 million bushels above cumulative export inspections.  Assuming the margin continued through May, corn exports through three quarters of the year equaled 1.214 billion bushels.  Since exports in the first half of the marketing year totaled 621.7 million bushels, the estimate for third-quarter corn exports equals 592.3 million bushels.

The Grain Crushing and Co-Products Production report released on June 1 provided corn used for ethanol and co-product production during March and April.  A drop of 26.7 percent from the previous year showed the impact of the lockdown.  Corn used for ethanol production over the two months totaled 655.3 million bushels.  Weekly estimates of ethanol production provided by the Energy Information Administration indicate ethanol production decreased by 33.7 percent in May 2020 from the preceding year.  By calculating the amount of corn used to produce ethanol from these May numbers, corn used for ethanol production in May was approximately 308.3 million bushels if conversion rates remained similar to recent months.  Total use for the quarter is estimated at 969 million bushels....

Three months of corn prices via FinViz: