New crop corn estimate tight -05/12/2021

USDA projected  the new crop US corn carryout at 1.5 billion bushels or 17% of fsi+exports.  A ratio of stocks to the least elastic corn demand provides the most accurate index of Midwest corn prices.

Our work suggests the USDA’s May new crop corn production estimate is conservative relative to early season expectations as acreage planted to corn likely will exceed March intentions and June corn crop reports are likely to be favorable. On the other hand the USDA’s tight May corn supply/usage balance projection provides little room for crop problems. A moderate Midwest drought this summer would likely result in double digit corn prices.