The range for monthly projected stocks-to-use levels has been between 5 to 6.8 per cent since October 2011 and is expected to range from 5.5 to 7.5 per cent in April 2012.

The potential to move US corn stocks-to-use levels above 7.5 per cent has been deferred to the 2012-2013 marketing year, when they are expected to push up to 8 to 11 per cent. However, Cattlefax says this is dependent on an increase in acres harvested and yields being average or higher over 2011.

US projected plantings look positive, with 2012 estimated plantings expected at 94 million acres, two million more than last year. If these plantings are harvested successfully, it is likely that US stocks-to-use levels could climb higher as projected.

US corn carryover from 2011-2012 is expected to be historically low, supporting the need for a record corn crop in 2012. However with poultry and cattle production declining and competitive wheat prices, corn use for feed could decline.

With supply tight, there are concerns that importing countries are looking outside the US to buy. Both Ukraine and Argentina had strong crops last year and with soybeans trading lower than in 2011, it is expected that corn plantings will increase in these countries.

US export commitments for 2012 are already lower than they were in 2011, but demand from China is still strong.

According to Cattlefax, dry weather in Argentina creates concern for global corn stocks.

Outlook prices for corn are resisting $6.50 / 6.75 a bushel, and looking likely to be around $5.50 / 5.75 a bushel.

Ethanol

Total ethanol usage increased 6 per cent in 2011, with exports driving this increase by a 200 per cent increase. US domestic use of ethanol is approaching 2003 lows, with a 3 per cent decline in usage in 2011.

Contrary to this, demand for exports is increasing which should off set the fall in domestic demand. Cattlefax predicts US corn exports will hit 300 million bushels in 2012, creating a name for the US in global energy markets. Cattlefax expects this growth will continue for the next few years.

There is a bit of a discrepancy over the amount of corn to be used in US ethanol production in 2012, with the USDA estimating 5 billion bushels and the US Energy Information Agency expecting a slightly higher amount at 5.132 billion. Cattlefax believes use will be somewhere in the middle.