A Grain Marketing Specialist at the University of Illinois has developed a Supply & Demand table for corn. It starts, says Todd Hubbs, with the number of acres he believes farmers will plant this year. “I see a reduction in corn acreage so I put it at about 91.5 which it’s a 3.5 acre reduction from 2016.”
He has an expectation that 83.2 million of those will be harvested. He sets a 169 bushel trend line yield even though the last three growing seasons have produced above average yields. Hubbs said, “When you put those two together the crop production I have is about 14.1 billion bushels for 2017.?
Add USDA’s 2.32 billion bushel corn carryout from this year and 50 million bushels of corn imports for next year to the 14.1 number, it tallies 16.4 billion bushels of total supply. “
On the demand side, there is more corn for ethanol but lower corn exports due to Brazil having a big crop that?s already showing up.
Total exports, are 1.95 billion bushels, and that number also assumes there won’t be a trade policy problem in the coming year.
The remaining demand figure is domestic usage called feed and residual. The University of Illinois number cruncher puts it at 5.5 billion bushels. These all add up to 14.3 billion bushels of demand.
When you subtract it from the available supply, 2.13 billion bushels are leftover.
Right now, Hubbs thinks each of those bushels of corn will be worth $3.70 in the cash market.
