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What do we know?
It may not feel like it, but the first quarter of usage is over the corn and soybean crop year. What do we know?
1. Ethanol grind started slowly in September, but by last week, was absolutely steaming along. At this pace, the USDA has ethanol grind too low. But most analysts and market participants feel production could decline when the 45 cent blenders credit expires at the end of the year. How does ethanol production actually respond?
2. Corn export shipments are a little slower than last year. Sales are definitely slower than last year. Does China buy more corn? Does corn ever become more competitive with world feed wheat?
3. Soybean sales and shipments are both a lot slower than last year (400 million bushels!). South American crops last year were large and their supplies were cheaper in the late summer/early fall when China was buying large quantities. Is there a South American weather scare? How much does China buy?
4. Soybean crush has been definitely under year ago numbers. The market is dealing with a reduced amount of data, however. There are still NOPA crush numbers released every month. However, the monthly Census crush report has been discontinued. USDA analysts will have to do some extra work to with the data from the stocks report to estimate crush.
5. Feed use for corn is the big unknown. There are anecdotal reports of larger amounts of feed wheat being consumed. It is hard to know exact numbers. Cattle on feed continue to be larger than year-ago and hogs on feed are about 100 percent. Chicken numbers are less than year-ago. Earlier in the year, broiler egg-sets were around 92 percent. Now the numbers are around 94-95 percent. Feed and residual use for corn is estimated down a little over 2 percent. What does the January Stocks report tell us about feed use?