Corn Stocks Seen Falling Further
Traders expect USDA’s first 2004-2005 supply/demand estimates, due out Wednesday, to show that U.S. corn ending stocks will continue to fall next year, with soybean stocks rising moderately. Wheat stocks are also expected to fall slightly from this year’s level.

Trade estimates of 2004-2005 corn ending stocks average 727 million bushels in a range from 650 million to 859 million bushels, versus USDA’s April 2003-2004 stocks estimate of 856 million bushels, according to a survey done by OsterDowJones Commodity News Service.

USDA is likely to use a trend-line corn yield and March planting intentions to calculate its initial 2004 crop projection. So its supply/demand numbers should garner more trade attention Wednesday.

Strong demand numbers are expected due to continued gains in ethanol production and strong feed usage. There are also ideas that USDA may further cut its 2003-2004 ending stocks estimate for the same reasons.

Trade estimates of 2004-2005 soybean ending stocks average 212 million bushels in a range from 150 million to 300 million bushels, compared with USDA’s April 2003-2004 stocks estimate of 115 million bushels.

Stocks are expected to rise largely due to a strong rebound in U.S. production, with acreage up due to high prices and yields seen rebounding from last year’s drought-reduced levels.

USDA’s soybean supply/demand numbers are likely to reflect continued strong world demand and strong domestic feed usage.

Trade estimates for U.S. 2004-2005 wheat stocks average 514 million bushels in a range from 460 million to 550 million bushels, versus USDA’s April 2003-2004 stocks estimate of 531 million bushels.

Stocks are expected to fall slightly due to lower U.S. production with wheat acres down and the HRW wheat crop under stress from hot, dry conditions.

However, lower production may be offset by lower export demand due to a significant rebound in world production for 2004-2005, especially in competing exporting nations.

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

To see more market perspectives, visit Brock's Web site at www.brockreport.com.