USDA’s June Grain Stocks report has proven especially important during the past several years. That will be particularly true this year if the June 28 report provides traders with any type of surprise.
The June report in tight carryover years, such as 2013, is especially significant because it indicates work that lies ahead for the market to ration (or not ration) demand to ensure at least “pipeline” carryover into the following production year. The trade will be highly reactive to the June 28 report if it portends any additional tightening.
Conditions during the past several years have provided the market with the luxury of being able to “borrow” early-harvested corn and provide some supply buffer. However, that luxury may not be so easy to come by this year, given the planting delays and subsequent cool, wet weather for crop establishment. Therefore, there remain lots of “ifs” surrounding final carryover for the 2012-2013 marketing year, as well as the management needed going into the 2013-14 marketing year.
March 1 stocks were marked at 5.4 billion bu., vs. 7.7, 6.5 and 6.02 billion bu. in 2010, 2011 and 2012, respectively. Therefore, it’s likely that June stocks will fall below previous years. The graph outlines June 1 stocks and subsequent three-month usage (to close out the marketing year) during the past several years to provide some benchmark for this year’s report.
How do you perceive corn inventory out in the country? Are corn growers hanging on to corn waiting for higher prices or are they simply out of corn? That influence helps price all other feeds. How are you managing your feed costs and inventory needs of all kinds? Provide your corn market analysis and comments below.
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