USDA’s grain stocks report released this morning raises the question as to what livestock producers are feeding their animals. Stocks of both corn and wheat were higher than expected, while soybeans were slightly lower.
Old crop corn stocks as of September 1 were 1.13 billion bushels, 34 percent, or 580 million bushels, lower than a year earlier. “Corn stocks were significantly above the average trade guess of 962 million bushels and above the range of estimates as well,” according to Jack Scoville, vice president with Price Futures Group, in Chicago. The trade estimates ranged between 820 million to 1.05 billion bushels.
The June through August drawdown of corn stocks indicated use of 2.54 billion bushels, down from the 2.60 billion bushels during the same period last year. “Corn has not been the feed of choice lately,” says Scoville. But neither was wheat, which came as a surprise.
Stocks of all wheat were 2.15 billion bushels, down 12 percent from a year ago. June through August disappearance of 720 million bushels was 2 percent lower than the same period a year earlier.
With corn prices as high as they have been, analysts had expected livestock producers to shift from feeding corn to feeding more wheat, but that didn’t happen, says Jerry Gidel, associate with North American Risk Management Services, Livingston, Texas. Instead, producers fed 50 million fewer bushels of wheat this summer.
“With hog numbers turning higher and cattle numbers trending higher, this report comes as a surprise to the trade,” says Scoville. “We’re hearing yield-positive reports for corn, but yields are expected to come down as harvest progresses.”
Meanwhile, old crop soybeans at 215 million bushels were 42 percent higher than a year ago. Soybean disappearance for the June through August period of 405 million bushels was 4 percent below the same period a year earlier, but lower than the average trade guess of 225 million bushels.
“Normally, you’d expect that would be slightly supportive to soybeans,” says Scoville. “However, the corn estimate will be an overriding factor.”
See the grain stocks reports that came out this morning. Stay tuned for report analysis.