The grain trade is expecting USDA to lower its 2008-2009 U.S. carryout estimates for corn, soybeans and wheat slightly in the monthly supply/demand update that due out on Thursday morning based on last week’s March 1 stocks estimates.
USDA seems almost certain to cut projected old-crop soybean ending stocks further after pegging March 1 stocks 132 million bushels below a year earlier. That stocks estimate implied record quarterly soybean usage.
Trade estimates of 2008-2009 soybean ending stocks average 169 million bushels in a range from 101 million to 185 million bushels compared with USDA’s March estimate of 185 million bushels and last year’s carryout of 205 million.
Trade estimates of U.S. corn ending stocks average 1.731 billion bushels, slightly below USDA’s March carryout estimate of 1.740 billion bushels, but up from last year’s 1.624 billion bushels.
With trade estimates of the corn carryout ranging from 1.675 billion to 1.954 billion bushels, there is a clear difference of opinion over whether USDA will lower its projection.
The March 1 corn stocks figure does not really give USDA reason to cut its corn carryout estimate.
Although March 1 corn stocks were in the lower half of the range trade expectations, the stocks figure implied first half corn usage was down 9.9% from a year earlier.
Corn usage would have to be roughly unchanged from a year ago during the second half of the marketing year for stocks to wind up at 1.740 billion bushels.
The March 1 wheat stocks figure, which was at the low end of trade expectations, would appear to justify a modest drop in USDA’s ending stocks projection modestly. However, no such cut has probably already been factored into the wheat market.
Trade estimates of 2008-2009 U.S. wheat ending stocks average 697 million bushels in a range from 666 million to 727 million bushels, compared with USDA’s March projection of 712 million bushels and last year’s carryout of 306 million.
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.