Recent and ongoing corn price behavior has led some observers to expect a relatively small estimate of March 1 stocks. The ongoing strong basis and recent inversion in futures prices implies a combination of slow movement of corn to the market, relatively small supplies, and a higher consumption rate than forecast, most likely in the feed sector, because use in other categories is transparent. The current price structure underscores the importance of the March 1 stocks estimate and the amount of supply rationing, if any, needed during the remainder of the marketing year.
The magnitude of corn planting intentions for 2012 has obvious price implications, but there seems to be more agreement on intentions. Expectations center on the USDA benchmark of 94 million acres, about two million more than was planted in 2011. The big unknown is the 2012 average corn yield. The USDA has started with a projection of 164 bushels, well above the trend calculation for the year.