With markets in a pivotal paradigm, farmers and traders alike are waiting in anticipation for USDA’s Quarterly Grain Stocks report to see if it can provide any bullish news. The report being released on September 28 will include estimates for grain in storage as well as the final production estimates for 2017 crops. Here’s what analysts expect to see.
Soybeans: “In most years when soybean supplies are “high,” final stocks are lower than forecast in the September Supply & Demand Report,” explains Pro Farmer editor Brian Grete. “We expect higher residual use to pull final 2017-18 ending stocks down to 390 million bu., down 5 million bu. from the Sept. 12 forecast.”
According to Chip Flory, Farm Journal economist and host of AgriTalk and AgriTalk After the Bell, ending stocks could be even lower than Grete’s estimate.
“Soybean crush and export inspection data suggests total use was 15 to 20 million bushels bigger than estimated in the Sept. 12 report,” Flory explains. “That would pull bean carryover down into the 365 to 370 range. Unless there’s an adjustment to the 2017 bean crop.”
Flory adds that any increase in Sept. 1 soybean stocks from the Sept. supply and demand estimate would indicate the 2017 bean crop was underestimated.
Corn: “We look for summer corn feed use to be higher for the quarter versus last year, but not as high as implied by the USDA Supply & Demand Report,” Grete says. “We expect Sept. 1 stocks to be 2.012 billion bushels.”
The ethanol grind and the export inspections data suggest carryover could decline a bit from the 2.002 billion in the September supply and demand report, Flory says.
“However, the World Board always reserves a fair amount of wiggle room in the Feed & Residual category,” he says. “So, if the stocks survey turns up something much different than the 2 billion bushels, there will be adjustments to the feed and residual use category to line-up the balance sheet with the Sept. 1 corn stocks survey.”
According to Flory, historical feed and residual use data suggests Sept. 1 stocks could be 15 to 20 million bu. above the September supply and demand estimate. However, given the number of hogs, cattle and birds on feed right now, Flory says that increase would probably raise eyebrows.
“For corn, put a 25-million-bu. cushion on both sides of 2 billion bushels and I wouldn’t anticipate much of a market reaction,” he says. “Anything outside of that 50-million-bu. range would suggest the World Board will have to make some adjustments to feed and residual use to account for “a miss” on the 2017 corn crop.”
Wheat: “Wheat exports during the summer were pretty low, resulting in a year over year increase in stocks,” Grete explains. “We expect Sept. 1 wheat stocks to be 2.332 billion bushels.”