World Stocks Building Quickly

November 5, 2013 12:33 AM
World Stocks Building Quickly

Editor's Note: this story was originally published on Oct. 9, during the government shutdown. It has been edited to reflect the information released since then.


Survey Puts Corn Production above 14 Billion Bushels

INTL FCStone released its 2013 crop survey last week that put estimated corn production at 14.15 billion bushels and the average corn yield at 158.7 bu. per acre. The estimates compare with USDA’s September projection of 13.8 billion bushels and an average yield of 155.3 bu. per acre.

INTL FCStone’s state-by-state forecasts show Ohio should have the highest average corn yield of 180 bu. per acre, followed by Illinois at 178 bu., and Indiana at 174 bu.

Allendale estimates corn production will be 13.827 billion bushels.

For soybeans, INTL FCStone estimates total production at 3.163 billion bushels and the average soybean yield at 41.4 bu. per acre. USDA's September estimate for soybean production was 3.149 billion bushels and its soybean yield was 41.2 bu. per acre.

Allendale’s soybean production estimate is lower at 3.079 billion bushels.

Swiss-based Informa cut its forecast for soybean production to 3.176 billion bushels from its previous estimate of 3.244 billion. The forecasting firm also reduced its 2013 soybean yield estimate to 41.7 bu. per acre versus its previous estimate of 42.4 bu.

Pipelines to Refill

Large crops in North and South America will replenish both U.S. and world ending stocks of new-crop corn and soybeans.

Allendale estimates U.S. 2013-14 ending stocks at 2.046 billion bushels, up from the 2012-13 carryout of 824 million bushels and USDA’s latest estimate of 1.859 billion bushels. A 2-billion-bushel carryout is considered burdensome. The last time the corn carryout was above 2 billion bushels was in 2004 at 2.114 billion. Next year, Rich Nelson, chief strategist with Allendale, a full-service brokerage and advisory firm based in McHenry, Ill., says the carryout could hit 2.6 billion bushels.

Allendale’s estimate for new-crop ending stocks of soybeans of 160 million bushels is also higher than USDA’s 155 million bushels, and substantially higher than last year’s 125 million bushels.

"The soybean carryout is still tight," says Nelson. "The market is genuinely concerned about tight supplies." In 2010, the carryout was much larger at 215 million bushels. Stocks would need to climb to 300 million bushels to be considered burdensome.

World stocks are projected to be at an all-time record high for soybeans and the highest for corn since 2000.

The estimated world stocks-to-use ratio for beans is 19% for the current crop year, says Nelson. In 2010, the world stocks-to-use ratio was 20%, and in 2006 it was 21 percent.

USDA’s September estimate for 2013-14 world endings stocks of corn was 151.42 million metric tons, a 23% increase from last year’s 123.11 million metric tons. The estimated stocks-to-use ratio for world corn is 15%, much tighter than the 21% to 40% ratios of the 1984-2001 period, Nelson notes.

New-crop soybean stocks will also be much larger at 71.54 million tons, according to USDA’s latest estimate, up 15% percent from last year’s 62.22 million metric tons. Allendale, however, anticipates even larger global soybean stocks of 72.44 million metric tons.


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