Sluggish sales and competitive corn prices in South America result in a 25-million-bushel decline in the corn export projection. U.S. corn prices, even at the reduced forecast, are still relatively high compared to trade competitors. In particular, March shipments from Brazil were strong, and shipments from Brazil and the Ukraine have proved competitive. In fact, Brazil corn exports are projected 14 percent higher than U.S. exports for the 2012/13 October-September trade year. Prospects for improved U.S. exports are limited by tight corn supplies that are diffused over a large area, which make it difficult to assemble exportable volumes.

Corn feed and residual use shrinks for second half of marketing year
Feed and residual use in the second half of the marketing year (March-August) is projected to be 1.2 billion bushels, which would represent 28.7 percent of the 4.4-billion-bushel marketing year total. In April 2012, USDA projected second-half feed and residual disappearance for 2011/12 at 26.3 percent of the marketing-year total and below trade expectations at that time. Once September 1 stocks and final use for other categories were known, second-half 2011/12 feed and residual use fell to 26.0 percent of the marketing-year total. This compares with 24.3 percent in 2010/11, the lowest share since at least 1975. Second-half feed and residual is projected at 1,264 million bushels, compared with 1,180 million last year.

In absolute terms, feed and residual use in the second half of the 2012/13 marketing year is expected to be 807 million bushels less than the 10-year average, and the fourth lowest since 1975, behind last year, 2010/11, and the drought year of 1983.

Ending stocks for 2012/13 are projected at 757 million bushels, 125 million above last month’s forecast and 232 million below 2011/12. The stocks-to-use ratio is now projected at 6.8, compared with 5.6 last month and 7.9 in 2011/12.