Corn, Soybean Stocks Up

The USDA raised its estimates of 2005-06 ending stocks for both corn and soybeans because of larger production estimates for both crops.

In its World Agricultural Supply and Demand Estimates Report, the USDA boosted its estimate of 2005-06 U.S. corn ending stocks to 2.079 billion bushels, up 179 million bushels or 9.4% from its previous estimate.

An increase of 289 million bushels in U.S. corn production was partially offset by a 50 million bushel increase in projected U.S. exports and a 75-million bushel increase in projected feed usage.

However, the 2005-06 U.S. corn carryout is now seen declining only 46 million bushels from the 2004-05 carryout, which was revised upward by 15 million bushels to 2.125 billion.

The USDA raised its estimate of 2005-06 U.S. soybean ending stocks by 25 million bushels to 205 million bushels as increases in forecast usage partially offset larger production.

The USDA raised projected U.S. soybean exports by 20 million bushels due to lower prices and smaller supplies in competing exporting nations. The projected U.S. soybean crush was also raised by 15 million bushels.

Despite the increase in projected U.S. ending stocks for 2005-06, U.S. stocks are still seen dropping by 90 million bushels from the 2004-05 level. The 2004-05 carryout was revised downward by 5 million bushels due to slightly larger exports.

The larger carryout figures should weigh on corn and soybean prices, although the markets may take some solace from the fact that the USDA raised its export estimates despite the recent problems at the U.S. Gulf due to Hurricane Katrina.

The USDA’s World Agricultural Outlook Board said the supply and demand impacts of transportation and port disruptions caused by Hurricane Katrina were “presumed to be temporary” based on available information.

The USDA cut its estimate of 2005-06 U.S. wheat ending stocks by 10 million bushels due to higher projected food use, which was only partially offset by larger imports.

The USDA now pegs 2005-06 wheat ending stocks at 624 million bushels, up from 540 million bushels at the end of 2004-05.

While no changes were made in total U.S. wheat exports, the USDA raised projected HRW wheat exports and lowered exports for other wheat classes, except durum, which was unchanged.

Food use was raised due to revised mill grind figures for 2004 that were recently released by the Census Bureau.

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.