Corn at Farm level Economic Value study – 7/23/2020

The accompanying scatter study plots the U.S. national average season price for corn as a function of the carryout stocks usage ratio. We have deducted feed usage leaving the more inelastic exports, food, seed and fuels categories. 

In the July 2020 WAOB report the USDA’s supply usage balance resulted in a 35% old crop ratio and 30% new crop ratio. The USDA’s new crop price projection is on the high side of the scatter.However there is reason to believe the 2021 point could shift to the left as corn used for fuel may exceed the current USDA forecast and more than offset what believe is a somewhat larger crop than USDA assumes.