Ending stocks are pretty darn tight for the 2010-2011 marketing year for corn. That’s not news to you, surely, as the market has reacted to this situation. But in an acreage battle, will you commit to corn?
A tough 2009 harvest and wet 2010 spring made for some rough times for corn and corn acreage in 2010. Harvest went much better last year than the year before. Hopefully Mother Nature has an agreeable spring planting season in order for us this year. Here’s a few points to keep in mind as you consider your 2011 corn acreage and your worldwide customer base’s expectations:
- Based on current usage, there is only an 18 day supply of corn in the U.S. as of September 1. Let’s hope we get in to start harvest as early this year as we did in 2011.
- All usage including livestock, exports, processing, and ethanol have built a significant demand for corn, exactly what a market based system should do. Given recent weather difficulties around the world, other commodities are tight, as well, especially wheat. That’s putting extra pressure on the world corn market.
- An increase in U.S. stocks of 325 million bushels (to meet the 1 billion bushel ‘comfort level’) would require a crop of 13.575 billion bushels.
- A yield of 162 bushels implies that harvested acreage would need to be near 83.8 million and planted acreage near 90.9 to produce a crop of 13.575 bushels. A yield of 159 bushels implies harvested acreage of 85.4 and planted acreage of 92.5 million.
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