With USDA estimates for the current crop year 2021-2022, which goes through August 31 of this year for corn and bean. On the right side is the trad ides, what most of the trade is likely thinking for new crop ending stock including the crop that will be planted this spring.
Corn acres at 89.49 million acres with a normal amount of abandonment and silage, that would give us 89.1 million acres harvested and a trend line yield of 181 bushels per acres this year.
We are projecting beginning stocks next year at 1.2 billion, that is below this years ending stock, we do believe that a combination of lower than expected quarterly grain stocks combined with larger exports than USDA is currently projecting will result in the 1.44 shrinking to 1.2.
Therefore that is what we are using for beginning stock next year.
When we look at our largest demand category, we believe that feed and residual will likely be similar to what we are looking at this year. Ethanol we are looking at something similar, granted these numbers could change, but at this time we believe both ethanol and exports could be similar in the next crop year.
We do believe because of losses in South America combined with challenges due to the Russia/Ukraine war, that our exports will be larger next year at 2.7 and that’s similar to what we saw a year ago at 2.75.
When we combine all the supply items with all the demand items it results in ending stocks at 909 million bushels, that would be a 6% stock use ratio, that’s tighter than what is currently being projected for this year and tighter than where we ended up last year.
Therefore, current prices are higher than they were a year ago at this time and its due to the markets idea that next years ending stock will be even tighter than the past couple of years.