The focus in the corn market has mostly turned to 2015 production prospects and implications for the magnitude of stocks at the end of the 2015-16 marketing year. According to a University of Illinois agricultural economist, the pace of old-crop consumption will determine the magnitude of carryover stocks into the new marketing year. In addition, the magnitude of consumption of corn, ethanol, and distillers grains shed some light on the strength of demand heading into that new year.
What follows is Darrel Good’s review of the recent pace of exports for those three commodities.
The pace of corn exports during the first half of the current marketing year exceeded the pace of a year
As of April 30, 519 million bushels of U.S. corn have been sold for export but not yet shipped. It appears that additional sales of about 88 million bushels, or about five million bushels per week, will be required in order for total export commitments to reach 1.8 billion bushels. For the five weeks ended April 30, new sales averaged 29.7 million bushels per week. While the export demand for U.S corn for the remainder of the marketing year is uncertain, the recent pace of export inspections and new export sales are certainly supportive of the projection of 1.8 billion bushels for the year.
The U.S. corn market also depends to some degree on the strength of export demand for ethanol and distillers grains. On a corn
Since 2010, China has been the largest export market for U.S. distillers grain, with Mexico a distant second. On a corn
Export demand for U.S. distillers grains suffered from late 2014 through early 2015 due to Chinese import restriction. Exports to China averaged about 595 thousand tons per month in May, June, and July 2014. That average dropped to 107 thousand tons from September 2014 through January 2015. Exports recovered to 517 thousand tons in March 2015. As a result of the Chinese import restrictions, U.S. distillers grains exports during the first seven months of the 2014-15 marketing year totaled only 6.67 million tons, 18 percent less than during the same period in the previous year. Last year, exports were also quite large from May through August. While the pace of exports is recovering, shipments will likely continue to lag those of a year ago into the summer. Large year-over-year increases will be registered beginning in September.
The strength of export demand for U.S corn, ethanol, and distillers grains is not completely revealed by the magnitude of shipments since quantity demanded presumably varies with price. However, the current robust pace of corn and ethanol exports and prospects for further improvement in the pace of distillers grains exports are encouraging. A continuation of modest corn prices suggests that export quantities will remain large.
Source: Darrel Good and Debra Levey Larson, University of Illinois