USDA released its Grain Stocks report coming in at more than 5 billion bushels — half of which is being stored on farms. The 5 billion number is up less than 1% from last year but down from March.
Soybean stocks are down 22% at 1.39 billion bushels. Of that, 633 million bushels are stored on farm. The current stocks are half of what they were in March.
Wheat is coming in at just over 1 billion bushels, which is down 3% from last year.
“We pretty much took 1 billion bushels off of production,” says Rich Nelson, chief strategist with Allendale. “Some of that will be offset by a little lower demand for old crop and new crop. The message is it does allow us a little chance for some higher prices going into some summer months to catch up on some marketing.”
Nelson believes demand is the biggest roadblock, especially domestically with ethanol production. He also has his eyes on international trade.
“On top of that, we’re still waiting on the China buying discussion — if and when it’s going to happen,” he adds.
Watch the rest of the analysis from Nelson here.