No Big Corn Stocks Surprise Expected This Time



Friday’s quarterly Grain Stocks Report is not expected to hold much news for the corn and soybean markets, with the trade expecting Sept. 1 stocks to come in close to USDA’s current old-crop carryout forecasts.

Trade estimates of Sept. 1 soybean stocks average 132 million bushels, just 2 million bushels above USDA’s current 2011-2012 carryout estimate, in a range from115 to 152 million. If soybean stocks come in at the average of trade estimates, they would be down 38% from a year earlier, but the tight stocks are already factored into prices.

The trade anticipates Sept. 1 corn stocks will come in a modest 4.7% below USDA’s current old-crop carryout forecast of 1.181 billion bushels, but just 2 million bushels lower than a year earlier. Pre-report estimates of corn stocks average 1.126 million bushels, in a range from 887 million to 1.261 billion bushels.

If the stocks report does not hold a surprise for the corn market, it will be a departure from the pattern of the past two to three years, but USDA may have stolen much of the report’s thunder when it cut its forecast for 2011-2012 feed/residual use by 150 million bushels and raised its carryout forecast in the its Sept. 9 supply/demand update.

USDA cut old-crop usage in the supply/demand report due to indications early harvested new-crop corn displaced old-crop usage during August. Nearly 11% of the 2012 U.S. corn crop had already been harvested by the end of August, a record pace.

The average of trade stocks estimates implies total old-crop corn disappearance was 2.023 billion bushels during the fourth quarter of 2011-2012, down more than 20% from the fourth quarter of 2010-2011 and the lowest since 1996-1997.

The average of trade soybean stocks estimates implies total old-crop soybean disappearance during the fourth quarter of 2011-2012 was 535 million bushels, up 34.8% from a year earlier and the highest since the record level 2005-2006.

The strong fourth quarter soybean usage has been well documented by strong U.S. soybean export and crush statistics.


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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