“Anticipating the level of feed and residual use is difficult because the level of use in that category during the first quarter of the year varies considerably,” Good said. “Implied use varied by 250 million bushels the previous two years and by 565 million bushels in the previous five years. Use this year is even more difficult to anticipate due to the harvest of an estimated 1.2 billion bushels of corn before the start of the marketing year on Sept. 1. Some of that corn was presumably consumed before Sept. 1, but will be revealed as consumed after Sept. 1. That expectation is supported by the unusually small estimate of corn in the feed and residual category during the final quarter of the 2011-12 marketing year. Even then, Sept.1 stocks of old crop corn were smaller than expected,” he said.
Good concluded that the magnitude of Dec. 1 corn stocks cannot be forecast with confidence and expectations will likely be in a wide range. However, the potential for a smaller 2012 production estimate and a large level of implied feed and residual use point to relatively low inventories and the need to slow the pace of corn feeding.