Corn, Soybean Stocks Estimates Bearish
USDA's first estimates of 2001-2002 U.S. corn and soybean ending stocks were larger than the trade expected, which could put some new pressure on prices. However, weather should continue to be the dominant force driving futures price action.
USDA's first new-crop supply/demand balance sheets, released May 11, pegged 2001-2002 U.S. corn ending stocks at 1.918 billion bushels. That's down only 80 million bushels from the projected 2000-2001 carryout, despite an expected drop of 393 million bushels in production.
The USDA number is 300-400 million bushels above what the grain trade was expecting. USDA's usage projections may be questioned, however, as it sees livestock feed use falling by 125 million bushels next year.
USDA pegged U.S. 2001-2002 soybean ending stocks at 500 million bushels. That number is psychologically bearish, but is not too far above the top end of trade expectations.
The trade will likely discount this initial projection as USDA's early stock estimates for soybeans have been significantly too high in recent years.
Projected world 2000-2001 soybean stocks were raised another 2.9% to nearly 29 million metric tons as USDA raised its Brazilian crop estimate by another 1 million tons to 36.5 million tons. However the market was anticipating a higher Brazilian number.
Editors note: Richard Brock, 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.