Observations on US Corn Feed Demand 01/16/21

US corn feed residual use increased modestly during the first quarter of  2020/21 crop year. By contrast USDA projects a 4% drop in crop year feed and residual disappearance.USDA reasons the recent bull corn market will ration corn supplies thru the last three quarters of the crop year. We have scattered crop year feed residual against first quarter disappearance. Note the January USDA estimate was low on the scatter. 

Our second scatter displays US feed disappearance per GCAU (grain consuming animal units) as a function of the price of corn at farm level.  The USDA’s January forecast (marked in red) appears to be in line with recent historical  experience. But our longer term model using the same variables projects 2020/21 US feed disappearance at 6.05 billion bushels  versus  USDA’s 5.65 billion bushels.

We also note USDA expects GCAU’s to decline slightly in 2020/21. In a average year GCAU’s would increase about 1%.