Although the Livestock Marketing Information Center (LMIC) estimates corn in storage at the end of the current market year (September 2015) to be 1.8 billion bushels —the most since 2009 as a percentage—they say early indicators suggest a smaller harvest in the fall.
The government’s first assessment of crop plantings—from USDA’s Acting Chief Economist last month—pegs corn plantings at 89.0 million acres, which is 1.8% less than in 2014, according to LMIC. Those would be the fewest acres in corn since 2010. Plus, the initial outlook suggested fewer corn acres switching to soybeans than much of the trade anticipated.
“USDA’s recent plantings estimate, and a number of other assumptions (rather normal national average yield per acre and a corn demand environment similar to this year’s), suggest some modest tightening of corn stocks after the 2015 crop is harvested. That means livestock producers should not be planning for much further adjustment in corn cost during the 2015-16 crop year,” say LMIC analysts. “Of course, actual plantings change between now and spring, as can the proportion of planted acres that are actually harvested for grain.”
LMIC expects the average corn price received by farmers this year to be in the range of $3.60-$3.70 per bushel, the lowest average since $3.55 in 2009-10.
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