Corn, Soybean Stocks Smaller Than Expected

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Last week’s quarterly USDA Grain Stocks Report held bullish news for the corn and soybean markets as it pegged March 1 stocks of both crops below trade expectations.

The stocks figures indicate USDA will likely have to lower its already-tight estimates of 2010-2011 U.S. corn and soybean ending stocks further in April and could send prices for both commodities up sharply in the near term.

USDA pegged March 1 corn stocks at only 6.520 billion bushels, compared with trade estimates averaging 6.701 billion bushels in a range from 6.552 billion to 6.800 billion bushels.

The March 1 stocks figure is 1.174 billion bushels, or 15.3%, below the year-earlier stocks of 7.694 billion bushels and implies that first-half 2010-2011 corn disappearance was up 8.2% vs. 2009-2010.

USDA pegged March 1 soybean stocks at 1.250 billion bushels compared with pre-report estimates that averaged 1.295 billion bushels in a range from 1.266 billion to 1.366 billion bushels.

The March 1 soybean stocks are down 1.6% from the year-earlier level of 1.270 billion bushels and imply that first-half 2010-2011 soybean disappearance was slightly above 2009-2010.

USDA’s estimate of March 1 wheat stocks looks mildly bearish for wheat prices, but the wheat market may follow corn prices higher.

USDA pegged March 1 wheat stocks at 1.420 billion bushels compared with trade estimates averaging 1.399 billion bushels in a range from 1.285 billion to 1.488 billion.

The March 1 wheat stocks were up 64 million bushels, or 4.7%, from the year-earlier level of 1.356 billion bushels even though implied U.S. wheat disappearance for the first three quarters of 2010-2011 was up 14.5% from a year earlier due to strong exports.

The wheat stocks figure suggests USDA will have to raise its estimate of the 2010-2011 U.S. wheat carryout slightly again in April.

 

Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.

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