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Corn market direction unfolding, magnitude still uncertain by 123wert sdfsf
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Corn market direction unfolding, magnitude still uncertain |
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Business,Business News,Business Opportunities
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By Debra Levey Larson University of Illinois What's going to happen in the corn market this year? Look ahead tothe coming summer. The USDA's projections of U.S. and world corn and feed grainsupply-and-demand conditions presented in the May World Agricultural Supply and Demand Estimates (WASDE) report set the benchmark by which the corn market willjudge unfolding events. According to a University of Illinoisagricultural economist, those events are continually unfolding,with some of the more important ones to be revealed this summer. "Among the factors to be revealed over the next few months,two of the most important are the rate of domestic feed andresidual use and the prospective size of the 2012 U.S.
crop,"said Darrel Good. "Feed and residual use of corn during thecurrent marketing year is projected at 4.55 billion bushels. Useduring the first half of the year, as implied by the quarterlystocks estimates, totaled 3.39 billion bushels. To reach theprojection for the year, use during the last half of the year willneed to total 1.16 billion bushels, about the same as was consumedduring the same period last year.
Use in that period totaled 1.718billion bushels in 2010 and 1.631 billion in 2009." Good said the projected decline in the pace of feed and residualuse during the last half of the year is expected to come in thefinal quarter as a result of increased wheat feeding and theavailability of more than the normal amount of new-crop corn. "Increased wheat feeding in the summer of 2011 was alsoexpected but did not occur," Good said. "Based on theestimate of Sept. 1, 2011, wheat stocks, feed and residual use ofwheat during the summer of 2011 was at a five-year low of 204million bushels, 54 million less than was used in the summer of2010.
Early corn planting this year is expected to result in anearly harvest of a larger percentage of the 2012 crop andadditional consumption of new-crop corn in August." According to Good, the pace of maturity of the crop will provide agauge of the amount of corn likely to be harvested in August. "The estimate of June 1 corn stocks, to be released on June30, will provide for an estimate of feed and residual use duringthe third quarter of the marketing year and the level of use neededin the fourth quarter to reach the USDA projection," Goodsaid. Good reported that a combination of large corn acreage and aprojected record average yield of 166 bu. are expected to result ina U.S.
corn harvest of 14.79 billion bushels this fall. Thatprojection is 2.432 billion bushels larger than the 2011 crop and1.698 billion larger than the previous record crop of 2009. Theyield projection is 2 bu. above the trend calculation for 2012based on the trend of the U.S. average yield from 1990 through2010.
The above-trend yield reflects the anticipated impact of asmaller than average portion of the crop planted after the optimumdate for maximum yields. "History suggests that a new record average yield will requirebelow-average summer temperatures and above-average summerprecipitation, such as occurred in 2004 and 2009," Good said."The USDA's June 30 Acreage report will provide estimates of planted and harvested acreage.Ongoing weather conditions and the USDA's weekly report of cropconditions will provide the basis for yield projections prior tothe USDA's August Crop Production report." Another factor that will unfold over the next few months, Goodsaid, is the prospective size of the corn and feed grain crops inthe rest of the Northern Hemisphere. "The USDA projects larger corn crops than those of last yearin China, Canada, Mexico, and the Ukraine," Good said."Production of all feed grains is expected to be larger in theEU, Canada, China, and Mexico. The largest increases in production,however, are expected in the Southern Hemisphere as productionrebounds in Argentina and South Africa. Those prospects will unfoldin late 2012 and early 2013.
The first USDA forecast for the2012-13 marketing year is for record foreign feed grain production.The size of those crops will influence export demand for U.S. corn,with Chinese demand to be of special interest." In addition to production prospects, Good said the corn market willbe influenced by the world economic and financial conditions asthey impact consumer incomes and commodity demand. I am an expert from Home Storage & Organization, usually analyzes all kind of industries situation, such as tree climbing spikes , cd burner tower.
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