The corn market received a bearish shock from Thursday morning’s USDA quarterly Grain Stocks Report, which pegged Sept. 1 corn stocks 2% higher than a year earlier and 23.2% above USDA's previous projection for 2009-2010 ending stocks.
The grain trade, on average, was looking for stocks to be down 15.9% from a year earlier and up only 1.7% from USDA’s most recent ending stocks estimate.
USDA reported Sept. 1 corn stocks of 1.708 million bushels versus its previous 2010-2011 ending stocks projection of 1.386 billion bushels and trade estimates averaging 1.407 billion bushels in a range from1.350 billion to 1.489 billion bushels.
USDA’s Sept. 1 stocks estimate implies fourth quarter 2009-2010 corn disappearance rose only 0.5% vs. a year earlier compared with the huge jump of 25.7% in third quarter disappearance implied by the June 1 stocks report.
The most likely reasons for the higher-than-expected Sept. 1 stocks are that USDA missed some corn stocks in the June survey and higher corn prices slowed feed/residual usage during the fourth quarter of last marketing year.
The Sept. 1 survey may also have counted more new-crop corn stocks than usual with this year's corn harvest starting earlier than normal in many states, but only by a small amount.
The quarterly stocks report showed virtually no change in the soybean supply situation with USDA pegging Sept. 1 soybean stocks at 151 million bushels, dead on the average of trade estimates and only 1 million bushels above its previous 2010-2011 ending stocks estimate.
Sept. 1 U.S. soybean stocks were a modest 13 million bushels above a year earlier despite a record 2009 crop of 3.359 billion bushels.
USDA’s Sept. 1 soybean stocks estimate implies fourth quarter 2009-2010 soybean disappearance of 420 million bushels, down 8.3% from a year earlier. The slowing usage was expected with June 1 soybean stocks tight after very strong exports during the first half of the marketing year.
Editor’s note: Richard Brock, Corn & Soybean Digest's marketing editor, is president of Brock Associates, a farm market advisory firm, and publisher of The Brock Report.