Analysts anticipate only minor adjustments for USDA’s quarterly Grain Stocks report scheduled for release on Wednesday, but farmers and traders alike are still very interested in seeing those numbers.
The report will show inventories as of Sept. 1, revealing the final ending stocks numbers for corn and soybeans for the 2014-15 marketing year, which ended Aug. 31.
“This report will put to bed the guessing that’s been going on for 14 months (about) what the carryout will be,” said Bill Biedermann, co-founder of Allendale and an analyst in Crystal Lake, Ill. “Typically, there aren’t a lot of surprises on the ending stocks report. If there are adjustments in the carryover, it’d probably affect basis more than anything, because farmers are going to put a lot of this crop in the bin, and it’s going to take something to get them to take it out.”
What are these carryouts expected to be? According to Reuters, the average trade estimate for corn inventories as of Sept. 1 is 1.739 billion bushels, which would be up from 1.236 billion last year. The average trade estimate for soybean stocks is 208 million bushels compared to last year’s 91.960 million.Finally, the trade expects to see wheat ending stocks to be higher as well at 2.157 billion bushels for 2014-15 versus 1.914 billion last year
Don Roose, president of U.S. Commodities, predicts that USDA will simply fine-tune its September ending stocks numbers of 1.732 million bushels of corn and 210 million bushels of soybeans in Wednesday's report. He thinks that those adjustments might mean a slight upward revision for soybeans and a moderate reduction for corn.
“I’d say our export pace has been strong on soybeans, and if you look at the numbers that are released, the export pace could be 5 million stronger,” Roose said. “Ending stocks could sink 5 million on beans. That’s not a game changer to go from 210 [million] to 205 [million].”
The export pace on corn, however, has been below projections, which could add 20 million bushels to the corn ending stocks, according to Roose. That also would not be big enough to move the market.
For wheat, Roose anticipates Sept. 1 stocks to highlight the supply bearishness, thanks to a year-over-year increase in wheat production and an export market struggling to compete on the world stage.
Gregg Hunt, an analyst at Archer Financial Services, also believes that the wheat stocks report will confirm what the trade already knows about the U.S.'s abundant supply and its export struggles.
“Wheat’s uncompetitive,” Hunt said. “It’s still overvalued on the global market.”
USDA is also scheduled to release the Small Grains 2015 Summary on Wednesday, with Reuters reporting an average trade estimate for the all-wheat crop at 2.133 billion bushels, up from last year’s figure of 2.035 billion bushels.