“I think a lot of people are looking at the potential for very big crop, that there’s been some destruction of demand — which might recover in a year’s time, but it could easily hold back — so there’s a bit more cushion than the USDA’s numbers indicate.”

That would still be the case even with numbers below the government forecasts, Anderson says.

“Let’s say we get 2 million fewer acres of corn planted than USDA forecast in their June report. That’s probably about where the market is now in terms of expectations; the consensus seems to be we’ll be off about that much.

“Plugging that in, dropping yield by 10 percent to 140 bushels, with a 12.25 billion bushel production, increased feed usage of 4.55 billion bushels, increased ethanol use to 4.8 billion, and increased exports to1.1 billion, that’s 11.8 billion bushels of total use. We’d still end up with 1.25 billion bushels of carryover and a 10 percent stocks-to-use ratio — which would be higher than we’ve seen in several years. 

“Even with what looks like a fairly short crop compared to current expectations, we could increase all our major use categories and still end up with higher carryover.

“That isn’t a forecast, but it is a good illustration of why the market reaction to late planting has been somewhat muted.”

What if this year’s crop should turn out like last year’s?

“The 2012 crop was about 28 percent below trend,” Anderson notes. “If we should get a repeat of that, things would look totally different, and we’d be right back in the same situation we had this year.

“That becomes the $64,000 question: Where will 2013 yield end up? People argue about this a lot. A 156.5 bushel yield is USDA’s current estimate. Is that realistic? To me, 156.5 is higher than my mid-point estimate. I’d probably opt for 152 to 152.5 bushels, based on historical trends; I think that’s realistic. But 156.5 is not a crazy number — it’s within the ballpark of a feasible number; it’s still an achievable yield, I think.”

A supportive factor in this market, Anderson says, is that “Hay stocks have been really, really tight until recently. A lot of hay has been put up this spring, but going into this season, hay stocks were the tightest they’ve ever been.

“It’s hard to know what’s in the hay stocks numbers. When it gets dry, hay gets scarce, and prices get high, anything that can be formed into a ball with twine around it becomes hay. I expect there’s some of that in USDA’s stocks numbers. How much, who knows? But if we’re counting that, we’re overestimating how much hay there is.

“Prospects still look good for this year’s crop, but from where we are right now supplies of total feeds, including hay, are tighter than we’d like for them to be. We’re still kinda sitting on a razor’s edge.”