The December 1, 2020, corn stocks figure was 11.322 billion bushels (bb), nearly unchanged from the previous year's total of 11.327 bb and well below the trade guess of near 11.931 bb implies that 2.726 million bushels (mb) of disappearance for feed and residual occurred in the first quarter of this marketing year (Sep-Nov), a 3.5 percent increase from the previous year.
Despite this record amount of corn ostensibly used as feed for the first quarter of the year, the USDA still pared its total year feed/residual figure by 50 mb from the December WASDE report to 5.650 bb indicating that increased feed prices are expected to temper livestock inventories and animal product production moving forward in the marketing year.
Is it reasonable to think that feed consumption will be pared back for the rest of this year (December 2020 to August 2021) in order to keep demand at its forecasted projection of 5.650 bb?
This graphic shows the September-November corn feed/residual use as a percentage of the USDA's January WASDE estimate and what consumption was the last three quarters of the marketing year (December-August) as a percent of the final feed estimate on the left hand axis vs. the change in feed/residual demand from the January WASDE estimate to the final projection in million bushels on the right hand axis.
The Sep-Nov implied disappearance of 2.726 bb is not only record high in terms of volumes but as a percent of the January WASDE projection coming in at 48.2%.
The only years that come close are last year where the then record Sep-Nov feed figure of 2.633 bb was 47.7% of the January 2020 WASDE feed/residual projection of 5.525 bb for the 2019/20 marketing year and back in 2012 where Sep-Nov feed use was 46.3% of the January 2013 WASDE projection of 4.450 bb.
With 48.2% of this year's feed projection already used this means that for the rest of the year only 51.8% of the estimated 5.650 bb can be fed but going back to at least 1995 and probably before attaining such a low percent has never been seen.
The lowest percent was in the 2012/13 season at 52.3% but that required the USDA to pare feed usage from the January WASDE report to the final figure by 135 mb while a year late only 54.1% was used but that also required the USDA to pare feed usage by a huge 259 mb.
Last year however when demand needed to be pared after Sep-Nov use was 47.7% of the January 2020 WASDE feed/residual projection of 5.525 bb for the 2019/20 marketing year strong feed demand right through the end of the year resulted in the USDA boosting consumption in this sector by 378 mb from the January 2020 WASDE report to the final figure that as mentioned was revised back on January 12, the largest upward adjustment in the feed component by far.
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