USDA's Grain Stocks Report Shows Farmers Are Holding Onto Old Crop Corn And Soybeans
USDA’s June Grain Stocks report typically takes a backseat to the agency's June Acreage Report released the same day. This year, analysts were watching the report closely for any indication on why some areas are seeing such strong cash grain bids to start the summer, but they didn't see any major surprises.
The main takeaways from USDA’s June Grain Stocks report include:
- Total U.S. corn stocks up 6% from June 2021
- Soybean stocks up 26% compared to last year
- All wheat stocks down 22% from June 2021
The grain stocks numbers for each crop were in line with pre-report trade estimates, and as one analyst pointed out, that's typically not the case with this report.
"That was probably the most neutral grain stocks report I've seen in four decades, really — fewer than 5 million bushels off of trade expectations across the board," says Arlan Suderman of StoneX Group. "There were no real surprises, and it's really kind of surprising that we can see any type of stocks report come so close to what the trade is expecting. This report really keeps the focus on the acreage and the weather."
Read More: Acreage Surprise: Soybeans Fall Short (For Now)
USDA’s report indicates the U.S. isn’t on the verge of running out of corn. Instead, it appears farmers are holding onto grain instead of selling with 2.12 billion bushels of corn currently being stored on farm, which is up 22% from a year ago.
Total corn stocks, as of June 1, sit at 4.35 billion bushels. Off-farm stocks total 2.23 billion bushels.
"Grain stocks weren't quite as tight as they expected," says Matt Bennett of AgMarket.Net. "Last year, you were at 4.11 [billion]. This year, you're actually at 4.35. That's essentially what the market was estimating. Did I think we'd be down from last year's levels? Maybe not quite as low, but I certainly felt like we had the tendency to be a little closer than where we ended up."
Despite the 6% increase in domestic corn stocks, Bennett says the report still shows corn supplies are tight.
"When you look at basis, when you look at the bull spread activity, it's just incredible," he adds. "There's no question there's less corn out there available. I think less beans as well."
Soybean Stocks up 26%
The Grain Stocks report shows farmers are holding onto more soybeans than they did at this time last year, with on-farm soybean stocks up 51%. USDA says the amount of soybeans stored on and off-farm now totals 971 million, which is 26% more than last June 2021.
"I think farmers indicated they want to hold onto supply until they know more about their new crop, trying to maximize the markets, if you will," says Dan Basse of AgResource Company. "But as you look around, because of the logistical snarls and the margins for ethanol and soybean crush, it leaves me with the idea the cash markets will stay relatively well supported."
Read More: USDA Cuts Soybean Plantings Estimate Sharply Below Trade Expectations
Wheat Supplies Tighten
USDA's latest report indicates wheat stocks are tightening across the U.S., with all wheat stocks 22% below last year. On-farm storage is down 34% at 660 million bushels, with off-farm wheat stocks down 19%.
