How many acres of corn were planted, how many will be harvested, and an even bigger question, what will the corn yield be, both regionally and nationally?
And that is only looking at the supply side of the price equation.
On the demand side, we have the same questions with regards to world corn/coarse grain production, plus the U.S. and world growth rates, oil/gas prices, value of the dollar, livestock numbers, final votes on the ethanol subsidy and import tariff, etc.
On June 9 the USDA updated their U.S. Corn Supply/Demand Balance Sheets. Using the weekly crop progress reports, limited information on flooding and drown outs, etc, i.e., decent information, but still "muddy" information, they lower projected planted corn acres 1.5 million acres relative to the March Intentions.
This seems a very reasonable prediction to me, but that is what it is, a prediction based on the best information we had.
The USDA also lowered expected harvested acres 1.9 million acres, that is made up of the 1.5 less planted acres, plus the best estimate of acres that were planted but have/will be flooded out.
On June 30 the USDA will release the Acreage Report, which will be based on a survey taken the first week of June, on planted and expected to be planted and harvested acres. While this will be good information, given this year's late planting and flooding, there is more room for error.
The USDA left their 2011 yield estimate the same as the May report, which had already been adjusted down from trend some for late plantings.
Lot of information to update
Unfortunately, we do not have a lot of information to update a yield estimate from trend without a survey; my guess is that it will be a bit lower even with decent summer weather.
And you all know the variables that could change that yield estimate as well as I, plus the greater odds of problems this fall. On the other hand, Iowa was about as late in 2008 and a "prefect summer" pulled out a better than expected corn crop. We will not have a corn yield survey until the first of August, to be released Aug. 11.
The USDA lowered the projected 2011 feed use by 100 million bushels based on higher feed prices, projected carcass weights, and projected animal units.
On June 30 the USDA will release the third quarter corn stocks report; this will give us a good update on corn used in the first three quarter, especially 2010-11 feed use.
The 2010-11 and 2011-12 corn used for ethanol production projections were left unchanged. Projected ending stocks for both marketing years are at the very tight levels.
The sharp drop off in corn prices the June 14-16 was the third selloff of that magnitude since the beginning of March. Each time we went on to a new high, will we this time, I don't know, but the odds are high that we could, or we could go lower.
But the even higher odds are that the market will continue to be very volatile. As I have said in almost every issue, we are out of the range of our data, we aren't sure what the price should be even if we knew the size of the 2011 corn crop, and we don't.
If you are a buyer, consider filling at least short needs and some middle-term needs on these huge drops.
For sellers, consider pricing some as we approach the highs, depending on how much you have already priced. Old crop cash prices in mid-Michigan dropped a dollar and they were still $7.25!
Positive basis of up to 30 cents are common.