The December – July corn spread
Historically, the new crop (this year December 2023) old crop (July 2023) corn spread has been associated with the quantity of corn to be carried into the new crop year. This month the USDA forecast the 2022/2023 crop year US corn carryout at 1.2 billion bushels compared to the 1.4 billion bushel carryout in the last crop year.
We have scattered the December/July corn spread as a function of the US corn carryout as a % of crop year usage excluding feed residual. The USDA’s January 2023 forecast would suggest a negative 30 cent (July 30 cents premium) to a negative $1.00 per bushel (or July one dollar premium to December corn). The red point was placed based on the market close (-.$66) on 01/13/2023.
| US Corn Supply/Usage Million Bushels acres | |||
| 2020/21 | 2021/22 | 2022/23 | |
| Area Planted | 90.7 | 93.3 | 88.6 |
| Area Harvested | 82.3 | 85.3 | 79.2 |
| Yield per Harvested Acre | 171.4 | 176.7 | 173.3 |
| Beginning Stocks | 1919 | 1235 | 1377 |
| Production | 14111 | 15074 | 13730 |
| Imports | 24 | 24 | 50 |
| Supply, Total | 16055 | 16333 | 15157 |
| Feed and Residual | 5607 | 5718 | 5275 |
| Food, Seed & Industrial | 6467 | 6766 | 6715 |
| Ethanol & by-products | 5028 | 5326 | 5275 |
| Domestic, Total | 12074 | 12484 | 11990 |
| Exports | 2747 | 2471 | 1925 |
| Use, Total | 14821 | 14956 | 13915 |
| Ending Stocks | 1235 | 1377 | 1242 |
| Carryout/Usage* | 13% | 15% | 14% |
| * Exclluding Feed Residual, January 2023 Estimate | |||