USDA Data Bearish For Corn Market

Friday morning’s USDA monthly supply/demand update held bearish news for the corn market as the agency boosted its estimate of 2004-2005 ending stocks more than most people were anticipating.

The report appears to be neutral for soybeans and neutral to friendly for the wheat market as the USDA cut ending stocks for those commodities in line with trade expectations.

The USDA pegged U.S. corn ending stocks at 2.215 billion bushels, vs. trade estimates averaging 2.157 billion bushels in a range from 2.075-2.255 billion.

The new number is up 160 million bushels over the USDA’s March 11 estimate and represents a 131% increase over year-earlier ending stocks. Corn ending stocks are now expected to be the largest since 1987-88.

The USDA made cuts across the board to corn usage, trimming projected feed use by 75 million bushels, exports by 50 million and food/industrial use by 35 million bushels.

The USDA cut 35 million bushels off projected 2004-2005 U.S. soybean ending stocks, leaving stocks at 375 million bushels vs. trade estimates averaging 368 million bushels in a range from 350-395 million bushels.

According to the USDA, stronger exports are responsible for the drop in stocks as it raised projected U.S. exports to a record 1.080 billion bushels from 1.045 billion.

Even with Friday’s cut, the U.S. soybean carryout will still be up 329% over the previous year and will be largest carryout since 1986-1987.

The USDA lowered projected U.S. wheat ending stocks by 12 million bushels to 541 million bushels, versus trade estimates averaging 549 million bushels in a range from 533-570 million bushels. The cut leaves the expected wheat carryout 5 million bushels below the previous year. The USDA raised feed/residual wheat use by 15 million bushels to 215 million.

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.