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Friday, September 30, 2011

USDA Stocks Report Is a Bearish Surprise For Corn


USDA’s quarterly grain stocks report Friday morning estimated corn stocks at 1.13 billion bushels at the end of the marketing year and soybean stocks at 215 million at the end of the marketing year August 31.  Compared to expectations, those numbers were higher for corn and lower for soybeans.

USDA’s National Ag Statistics Service released the September 1 Quarterly Grain Stocks in all positions report.

Old crop corn stocks in all positions on September 1, 2011 totaled 1.13 billion bushels, down 34 percent from September 1, 2010. Of the total stocks, 315 million bushels are stored on farms, down 35 percent from a year earlier. Off-farm stocks, at 813 million bushels, are down 33 percent from a year ago. The June - August 2011, indicated disappearance is 2.54 billion bushels, compared with 2.60 billion bushels during the same period last year.

The total corn stocks are more than what the trade was expecting.  A Dow Jones Newswires survey finds that the trade expected USDA to peg September 1 corn stocks at 962 million bushels.  A Farm Futures survey expected USDA to report tighter September 1 corn stocks near 835 million bushels. 

Last year’s stocks were higher than expected and caused a sharp drop in prices. Some market observers blamed the higher stocks estimate to USDA counting new crop harvest as old crop stocks because of the early harvest in 2010. This year USDA changed its question process and asked farmers for both old crop and new crop on farm stocks.

Old crop soybeans stored in all positions on September 1, 2011 totaled 215 million bushels, up 42 percent from September 1, 2010. Soybean stocks stored on farms totaled 48.5 million bushels, up 37 percent from a year ago. Off-farm stocks, at 166 million bushels, are up 44 percent from last September. Indicated disappearance for June - August 2011, totaled 405 million bushels, down 4 percent from the same period a year earlier.

The Dow Jones Newswire survey of grain traders indicated expectations for USDA to peg September 1 stocks at 225 million bushels.  The Farm Futures survey of farmers expected stocks at 223 million.

USDA revised its 2010 estimates for soybean production and said, “Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings, and farm program administrative data, the 2010 soybean production is revised down fractionally from the previous estimate. Harvested area is revised down 6,000 acres.”

All wheat stored in all positions on September 1, 2011 totaled 2.15 billion bushels, down 12 percent from a year ago. On-farm stocks are estimated at 642 million bushels, down 21 percent from last September. Off-farm stocks, at 1.51 billion bushels, are down 8 percent from a year ago. The June - August 2011 indicated disappearance is 720 million bushels, down 2 percent from the same period a year earlier.

The Dow Jones Market survey expected wheat stocks on September 1 at 2.046 billion bushels, and the Farm Futures survey estimate wheat stocks at 1.970 billion.

Posted by Stu Ellis on 09/30 at 07:51 AM | Permalink


Look for Missing Corn Feed in the Wheat Bin The fourth quarter of 2010-11 marketing year that ended June 1, 2011 had the third highest wheat usage (563 million bushels not adjusted for imports) since 1973-74 marketing year. (Marketing years 1981-82 and 1987-88 were big export years with big export quarters. The total use for the quarters was 619 and 666 respectfully.) After the June 30th stocks report,the July WASDE report increased ending stocks for 2010-11 to 861 million bushels for all wheat. This is up 52 million bushels from the June estimate of 809. So the usage, the highest in a long time, was not as high as what was expected. Feed and residual use drop to 135 million bushels in the July report from 170 million bushels estimated in the June report. The Southern drought could of moved the early harvested (prior to June 1) 2011-12 crop directly from the field to the feeder, missing USDA accounting and making 2010-11 ending stocks appear larger than what might have been with a more normal harvest date. If this thought process is anywhere close to reality, than future 2011-12 all wheat balance sheets will either decrease 2011-12 production and/or increase feed and residual use to account for early wheat harvest. Wheat usage may have substituted for corn usage in the feed ration. The early harvested directly feed new crop wheat may have missed USDA’s accounting and might be accounted for as a SURPRISE in future balance sheets. Jib aka Gibberish PS One last thought, the drought has made forage a high demand item. Stockers will not find wheat pasture out west. Calves came off range early. These factors and others might increase corn silage acres by 200 thousand acres or so reducing corn supplies by 30 million bushels or so. Just one more thing.

Posted by: Jib at October 3, 2011 11:11PM

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