Agricultural News
USDA Corn Stocks Figure Surprises Traders, Signals Bearish Market, Ag Economist Says
Mon, 30 Sep 2013 17:27:34 CDT
In its Quarterly Grain Stocks report released Monday, USDA pegged old-crop corn stocks at 824 million bushels. That was 74 million bushels above the highest pre-report trade estimate. USDA's soybean ending stocks figure came in at 141 million bushels, largely on a revision to 2012 production data.
"One hundred and 41 was more than the market was looking for and USDA did revise their 2012 production number by about 20 million bushels in order to reconcile with the old stocks figure as of September 1," said University of Illinois Agriculture Economist Darrel Good. "So, once that adjustment is made, everything makes sense; the stocks line up with known use in the summer quarter and this is a fairly common practice that a surprise in the stocks number on September 1 results in a change in the previous year's production number. That happens. And the 20-million-bushel change this year is middle of the road in terms of magnitude of change that we've seen over time."
Good said the revision does not make much difference because soybean stocks are still very tight. It doesn't significantly change the supply-demand balance for next year.
"The big question is still crop size and how big will the total supply be for the current marketing year."
With soybean harvest progressing, Good says yields are looking good.
"We're hearing a lot of very high yield reports particularly in Illinois, Indiana and Ohio-all the eastern production areas--bit more mixed as you go west, as you might expect. And a lot of people are saying the late-maturing beans will not yield as well and, so, we're waiting to hear those kinds of yields. Clearly, the early results are much better than I expected and I think the market had anticipated."
Good said the September 1st corn ending stocks report is about 140 million bushels above the average trade guess.
"Taken at face value it suggests the summer quarter feed and residual use of corn was extremely small-100 million bushels less than last summer when we had 1.2 billion bushels of new crop corn harvested before September 1 last year. And, so, to come in with a disappearance even less than last year is a real shock, I think. I think that does say the 2012 corn crop was larger than currently estimated. The USDA did not revise that number. There will be the opportunity to revise that in the January report. But, historically, the USDA does not revise the corn production number based on the September 1 stocks like they do soybeans."
Good said he expects the corn numbers to be very bearish on the markets.
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