PF Report Reaction: Corn Stocks Above Expectations

September 30, 2013 06:31 AM
 

 

 

MARKET REACTION

11:30 a.m. CT: It's really not much of a surprise, but USDA did "surprise" the market with a bigger-than-expected Sept. 1 corn stocks tally. Ahead of the report, December corn was trading down 1 1/4 cents. The immediate reaction was to the downside and corn is now trading about 5 cents lower. November beans were trading down 14 cents ahead of the report and have doubled losses to trade nearly 30 cents lower. December SRW futures were up 2 3/4 cents ahead of the report and are now trading up about 2 cents. HRW futures have added to gains since the release of the Small Grains Summary. Ahead of the report, December HRW futures were up 4 1/4 cents and are now trading 5 1/2 cents higher. Spring wheat futures were up 2 cents ahead of the report and are now about 4 cents higher.


SEPT. 1 GRAIN STOCKS

CORN: 824 million bu.; trade expected 688 million bu.
-- compares to 2.764 billion bu. on June 1; 989 million bu. on Sept. 1, 2012
BEANS: 141 million bu., trade expected 126 million bu.
-- compares to 435 million bu. on June 1; 169 million bu. on Sept. 1, 2012
WHEAT: 1.855 billion bu.; trade expected 1.938 billion bu.
-- compares to 718 million bu. on June 1; 2.105 billion bu. on Sept. 1, 2012

Corn stocks in all positions came in 136 million bu. above the average pre-report trade estimate. Sept. 1 stocks are the old-crop carryover, which was estimated at 661 million bu. by USDA's World Ag Outlook Board (WAOB) on September 12. Once again, WAOB pointed Sept. 1 corn stocks expectations in the wrong direction in the September Supply & Demand Report. Most likely, much of the bigger-than-expected Sept. 1 corn supply is the result of about 400 million bu. of 2013-crop corn harvested and made available for use in the old-crop marketing year.

Corn stocks on Sept. 1 are still down 17% from year-ago. Of the total stocks, 275 million bu. are stored on-farm, down 12% from year-ago. Off-farm stocks are put at 549 million bu., down 19% from year-ago. Indicated use in the final quarter of the 2012-13 marketing year is 1.94 billion bu.., down 10% from the same quarter last year.

Soybean stocks in all positions are 15 million bu. above the average pre-report trade estimate. Sept. 1 stocks are the old-crop carryover, which was estimated at 125 million bu. by WAOB on Sept. 12.

Sept. 1 soybean stocks are still down 17% from year-ago. Of the total, 39.6 million bu. are stored on-farm, up 3% from year-ago. Off-farm stocks are put at 101 million bu., down 23% from year-ago. Indicated use in the final quarter of the 2012-13 marketing year is 294 million bu., down 41% from the same period last year.

USDA also made a revision to the 2012 soybean crop. It says, "Based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings and program administrative data, the 2012 soybean production is revised to 3.03 billion bu., up 18.6 million bu. from the previous estimate. Planted area is unchanged, but harvested area is revised up 60,000 acres to 76.2 million acres. The 2012 yield, at 39.8 bu. per acre, is up 0.2 bu. per acre from the previous estimate."

Wheat stocks in all positions on Sept. 1 are 83 million bu. below the average pre-report trade estimate and are down 12% from year-ago. On-farm stocks are estimated at 547 million bu., down 5% from year-ago. Off-farm stocks are put at 1.31 billion bu., down 15% from last year.

Indicated disappearance in the first quarter of the 2013-14 wheat marketing year is 991 million bu., up 10% from the same period last year.

Durum wheat stocks are off 2% from year-ago with on-farm stocks down 3% and off-farm stocks down 2% from year-ago. June-August durum disappearance is indicated at 17.8 million bu., down 55% from the same time last year.


ANNUAL SMALL GRAINS SUMMARY

ALL WHEAT: 2.128 billion bu.; trade expected 2.121 billion bu.
-- compares to 2.114 billion bu. in Aug.; 2.269 billion bu. in 2012
HRW: 744 million bu.; trade expected 792 million bu.
-- compares to 791 million bu. in Aug.; 1.004 billion bu. in 2012
SRW: 565 million bu.; trade expected 545 million bu.
-- compares to 542 million bu. in Aug.; 420 million bu. in 2012
WHITE WINTER: 225.3 million bu.; trade expected 215 million bu.
-- compares to 209 million bu. in Aug.; 221.5 million bu. in 2012
OTHER SPRING : 531.7 million bu.; trade expected 509 million bu.
-- compares to 511 million bu. in Aug.; 542 million bu. in 2012
DURUM: 61.5 million bu.; trade expected 60 million bu.
-- compares to 60 million bu. in Aug.; 82 million bu. in 2012


All wheat production came in 7 million bu. above the average pre-report trade estimate and is up 28 million bu. from USDA's previous estimate. Planted acres were cut by 374,000, to 56.156 million acres. Harvested acres were cut by 553,000 from the August Crop Production Report, to 45.177 million acres. The national average all-wheat yield is now a record 47.1 bu. per acre, up 0.9 bu. from the August estimate.

Hard red winter wheat production is down 47 million bu. from USDA's August estimate and is 48 million bu. below the average pre-report trade estimate. Increases in production in all other wheat flavors more than offset the drop in the HRW crop. Soft red winter wheat production is up 23 million bu. from the August estimate and white winter wheat production is up 16.3 million bushels. Other spring wheat production is 20.7 million bu. bigger than estimated in August and the durum wheat crop was increased 1.5 million bu. from August.

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