My calculation of US corn stocks-to-use continued to tighten at the end of June with the 2020-2021 marketing year daily average price for the cmdty National Corn Price Index (NCPI, weighted national average cash price) coming in at $5.02 as compared to the previous month’s $4.83. Based on my correlation study dating back through the 2010-2011 marketing year, the end of June calculation implies stocks-to-use of 10.0% as compared to the end of April 10.3% and the August 2020 (end of the 2019-2020 marketing year) figure of 12.8% (based on a marketing year average cash price of $3.35). This look at 2020-2021 corn’s supply and demand situation remains the most consistent of all the grain markets reflecting solid demand from beginning of the marketing year through the end of June. A look at the accompanying chart shows us two clear trends:
- The daily average of the NCPI has increased an average of 19 cents per month from September through June, with a range of 24 cents (May 2020) to 13 cents (November 2020).
- My monthly stocks-to-use calculation has dropped 0.3% per month over the course of the marketing year with little variation.
Given this, projecting the last two months of the marketing year puts the average NCPI at $5.40 with a stocks-to-use calculation of 9.2%. This would be in line with strong correlation between the December 2021 and 2011 futures contracts (see Seasonal Analysis, “Combo Platter”) and the 8.6% ending stocks-to-use calculated for the 2010-2011 marketing year.