 Good said that expectations for the June 1 stocks estimates are
based on the estimate of March 1 stocks, the magnitude of imports
during the quarter and estimated consumption during the quarter.
"Expectations sometimes vary considerably among analysts," Good
said, "because estimates of consumption during the quarter vary and
some analysts try to anticipate ‘surprises.’ This is particularly
the case for corn because feed and the residual use of corn is not
estimated on a continuing basis. Instead, it is revealed by the
stocks estimate. Here the expectation of the June 1 corn stocks
estimate is based on available estimates of other uses during the
quarter and a calculation of feed and residual use based on the
USDA’s projection of use for the year and estimated use during the
first half of the year. A surprise in the stocks estimate would be
an indication that feed and residual use was occurring either more
rapidly or more slowly than projected," he said.
According to Good, March 1 corn stocks were estimated at 5.399.
Imports totaled 20 million bushels in March and April -- with totals
of approximately 30 million bushels for the March-May quarter.
"If that is the case, total corn supplies for the quarter totaled
5.429 billion bushels," Good said. "Cumulative corn export
inspections through May totaled about 541 million bushels. Through
April, cumulative Census Bureau export estimates for the marketing
year exceeded inspections by 24 million bushels. If that margin
persisted through May, cumulative exports totaled 565 million
bushels and exports for the March-May quarter totaled 181 million
bushels. Based on ethanol production estimates from the U.S. Energy
Information Administration, ethanol production during the March-May
quarter was 5.8 percent less than during the same quarter last year.
Based on those estimates, corn consumption for ethanol and byproduct
production during the quarter is estimated at 1.175 billion bushels.
Domestic use for other food and industrial products is estimated at
375 million bushels, which is consistent with the pace during the
first half of the year," Good said.
For the year, the USDA projects feed and residual use of corn at
4.4 billion bushels, 145 million less than used last year. The
estimate of use during the first half of the year was 227 million
less than use during the same period last year.
Good said that if the USDA’s projection for the year is correct,
use during the last half of the year should be 82 million bushels
larger than use of a year ago. Use during the final quarter of the
year should be much larger than use last year, when a large supply
of the new crop was available in late summer. With the late-planted
crop this year, new crop supplies will be much smaller. If that is
the case, the USDA projection would imply feed and residual during
the March-May quarter of about 840 million bushels, down about 20
million from use of a year ago. Use at that level would result in
total consumption for the quarter of 2.571 billion bushels and June
1 stocks of 2.858 billion bushels.
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For soybeans, Good said that March 1 stocks were estimated at 999
million bushels, and March-May imports were likely near 10 million
bushels, resulting in total supplies of about 1.009 billion bushels.
Export inspections through May totaled 1.268 billion bushels, and
Census Bureau estimates through April exceeded inspections by 3
million bushels. With exports of 1.15 billion bushels in the first
half of the year, March-May exports are estimated at 121 million
bushels.
The National Oilseed Processors Association estimated the
domestic soybean crush by its members during March-May to be 7.5
percent less than during the same quarter last year, Good said.
"The total crush for the quarter is estimated at 400 million
bushels. With seed, feed and residual use of 50 million bushels,
total consumption during the quarter would have been near 571
million bushels, leaving June 1 stocks at 438 million bushels," he
said.
"Expectations for planted- and harvested-acreage estimates will
be based on the March report of planting intentions of 97.282
million acres for corn and 77.126 million acres for soybeans, and
likely changes from intentions based on the very late planting
season," Good said. "Because the survey for the estimates was
conducted in the first half of June, estimates may still reflect
intentions in some cases. It is difficult to form acreage
expectations, so a wide range of guesses is likely. Based on
anecdotal reports, a few non-random private surveys and historical
evidence, we would expect planted acreage of corn to be 2.5 to 3
million less than March intentions and soybean acreage to be as much
as 1 million acres more than intentions," he said.
Good said that the price reaction to the USDA reports will depend
on the differences between expected and actual estimates, and the
estimates for corn hold the most potential for surprises.
[Text from file received from the
University of Illinois College of Agricultural, Consumer and
Environmental Sciences]
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