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"June 1 stocks of soybeans and corn are anticipated based on the
estimates of consumption during March, April and May. Because
consumption information for that period is incomplete, the
pre-report projection of the June 1 inventory is based on a
combination of known and projected consumption," said Darrel
Good. "For soybeans, Census Bureau estimates of the domestic
crush are available for March and April, but the May estimate
will not be released until June 28," said Good. "The crush in
March was 4.2 percent larger than in the previous year, whereas
the April 2007 crush was 6.9 percent larger than the crush in
April 2006."
Good anticipates a May soybean crush of about 150 million
bushels, 2.6 percent larger than the crush in May 2006. Crush
for the quarter was likely near 450 million bushels, he said.
Census Bureau export estimates are available through April,
whereas USDA estimates are available through May. Those
estimates suggest that soybean exports during the March-May
quarter totaled about 210 million bushels, he said.
"The most difficult category of use to anticipate is seed,
feed and residual use," said Good. "The quarterly distribution
of use in that category varies substantially from year to year
and can be influenced by any errors in the estimate of the crop
size."
Estimates of use in this category were extremely large in
each of the first two quarters of the current marketing year,
said Good, suggesting that the 2006 crop may have been
overestimated.
"If third-quarter use was near 50 million bushels, the
average of the past two years, total use during the quarter
should have been near 710 million bushels, leaving June 1 stocks
of about 1.075 billion bushels. Stocks at that level would be 84
million bushels larger than the record inventory of a year ago,"
he said.
For corn, Census Bureau estimates of exports are also
available through April, and USDA estimates are available
through May. Those estimates suggest that exports during the
March-May quarter should have been near 500 million bushels,
Good said.
"Estimates of domestic use of corn are not as readily
available, and no estimate of feed and residual use is available
on an ongoing basis. Use in that category is calculated after
the estimate of stocks at the end of the quarter is available,
and use for the quarter then is projected based on the level of
use projected by the USDA for the entire year and a typical
seasonal distribution of use," he said.
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 For the current year, the USDA projects feed and residual use at
5.85 billion bushels, 4.7 percent less than use during the previous
year. Apparent feed and residual use during the first half of the
current year totaled 3.716 billion bushels, 4.2 percent less than
use during the first half of the 2005-06 marketing year. Use was
down 2.5 percent in the first quarter and 6.5 percent in the second
quarter, he said.
"To reach the USDA projection for the year, use during the last
half of the current marketing year needs to be 2.134 billion
bushels, 5.7 percent less than use a year earlier. If use is
proceeding at that pace, consumption during the third quarter would
have been near 1.215 billion bushels," Good said.
Estimates of domestic processing use of corn are not easily
attainable on an ongoing basis, so the projection of third-quarter
use is made in the same fashion as the projection of feed and
residual use, he said.
"For the year, the USDA projects use in this category at 3.525
billion bushels, 18.2 percent more than used last year. The pace of
use should increase as the year progresses, however, as new ethanol
plants come on line," he said.
According to Good, use during the first two quarters of the
2006-07 marketing year was 13.6 percent and 15.5 percent larger,
respectively, than use during the same quarters last year. Use
during the last half of the year needs to be 21.5 percent larger
than use of a year ago in order to reach the USDA projection, he
said. That means that third-quarter use should have been near 925
million bushels.
"Based on the methodology used here, consumption of corn during
the third quarter of the 2006-07 marketing year should have totaled
about 2.64 billion bushels, leaving June 1 stocks of about 3.43
billion bushels, 930 million less than the inventory of a year ago,"
Good said.
A substantial deviation from that level might require the USDA to
alter the projection of domestic use for the year, he said.
"Last year, for example, the June 1 stocks of corn was 100
million bushels less than anticipated, resulting in a
100-million-bushel increase in the projection of feed and residual
use for the year," said Good.
[Text from file received
from the University
of Illinois College of Agricultural, Consumer and Environmental
Sciences]
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