S&D Analysis Corn
After close study of yesterday’s USDA corn S&D, it was not nearly as bearish as it appeared to us nor as bearish as the market reacted.
Old crop corn exports were reduced 75 million, as expected, but feed use was increased 150 million bushels. The USDA is finally coming to the conclusion that when we have the same animal units in a year as the previous year, we will feed the same amount of corn and wheat, That and the 4 bushel yield decline pretty much wiped-out the production from the additional acres of corn. Thus, the new crop carryout was increased just 5 million bushels, which is 0.22%.
As a result, USDA’s average price expected to be paid to farmers was left unchanged at $4.80. While that price is nothing to write home about, the fact USDA did not reduce it is encouraging. Again, USDA did not see these numbers as negative as the market did.