Search Site   
Current News Stories
Solar eclipse, new moon coming April 8
Mystery illness affecting dairy cattle in Texas Panhandle
Teach others to live sustainably
Gun safety begins early
Hard-cooked eggs recipes great for Easter, anytime
Michigan carrot producers to vote on program continuation
Suggestions to celebrate 50th wedding anniversary
USDA finalizes new ‘Product of the USA’ labeling rule 
U.S. weather outlooks currently favoring early planting season
Weaver Popcorn Hybrids expanding and moving to new facility
Role of women in agriculture changing Hoosier dairy farmer says
   
News Articles
Search News  
   

Old-crop soy off trade estimate by nearly a third

 

 

By MICHELE F. MIHALJEVICH

Indiana Correspondent

 

WASHINGTON, D.C. — The old-crop marketing year ended with soybean stocks sharply lower than expected, while corn and wheat supplies were slightly higher, according to the latest USDA Grain Stocks report.

Soybean stocks as of Sept. 1 were 92 million bushels, far lower than the pre-report average trade estimate of 130 million. A year ago, stocks were estimated to be 141 million bushels.

For corn, stocks were 1.24 billion bushels, higher than the average trade estimate of 1.18 billion. Last year at this time, stocks were listed at 821 million bushels. Stocks for all wheat were 1.91 billion bushels, also higher than the average trade expectation of 1.89 billion. A year ago, all wheat stocks were 1.87 billion bushels.

The USDA’s National Agricultural Statistics Service (NASS) released its report Sept. 30. This is the first time in more than 40 years that soybean ending stocks were projected below 100 million bushels, said Darin Newsom, DTN senior analyst. The last time soybean stocks were estimated to be fewer than 100 million was 1973, he noted.

"So, when we heard at the end of last marketing year in July and August that end users, that buyers, that exporters, that crushers, were scraping the bottom of the barrel searching for soybeans to fill their needs, they weren’t far off," he said. "There just weren’t many to be found."

In looking at soybean sales for the previous marketing year, the United States moved more beans than ever during the first two quarters – but sales fell off during the last two, Newsom said.

"Someone’s going to look at that and say, ‘Well, that’s bearish, we saw a slowdown in demand,’" he said. "No, we just ran out of beans. It was a very tight situation and one that, given this year’s projections for a record harvest, we might not see again for another 25 to 30 years, maybe 40."

Strong worldwide demand for soybeans does make the stocks situation tighter, said Jerry Gidel, chief feed grain analyst for Rice Dairy. With harvest just beginning in many parts of the country, the market is concentrating on potential yield numbers, he said.

"Sixty percent of this year’s soybean exports are already on the books," he explained. "This is not even the first month into the season and 60 percent are already booked. These are soybeans that will be shipped in February or March. That’s a huge amount we’ve got to accumulate and get through the system."

As part of its report, NASS revised soybean production, yields and harvested acreage for 2013. Production is now listed as 3.36 billion bushels, up nearly 70 million from the former estimate. Average yield is 44 bushels per acre, up less than a bushel. Harvested acreage is 76.3 million, up 384,000 acres.

The changes were made "based on an analysis of end-of-marketing year stock estimates, disappearance data for exports and crushings and farm program administration data," the agency stated.

The corn supply isn’t as tight as it has been the last few years, said Greg Wagner, president of GWX Ag Advisors.

"I don’t think the corn stocks number is going to be the No. 1 candidate to introduce some sort of bone-jarring seismic price movement in the market," he stated. "We are looking at a very burdensome supply of corn, both here in the United States and around the world.

"Maybe record production is in the offing around the world, coupled with a lot of record wheat production, much of which is in the feed category. The corn market is going to have its work cut out for it."

When looking at the corn ending stocks number, Newsom said it’s best to compare it with ending figures from a few years ago and not the last three years, when U.S. farmers had terrible production years. When comparing the Sept. 1, 2014, ending stock estimate with 2007-08, 2008-09 and 2009-10, the ending number is far below those years, he said.

"Those were years we had good production and record demand," he explained. "Demand is getting stronger. This is a good indication that the demand market in corn, while beaten senseless, while beaten down over the last year, is still alive. It just has to have a spark to get traders interested in this market again.

"What’s that going to be? Right now, nobody really knows."

For the corn market to see an interest from traders, a significant drop in projected acreage would probably be required, Wagner said.

"I personally don’t see a dramatic reduction in acreage, but there’s going to be some," he added. "People are bandying about 2 million acres in corn, maybe 100,000 acres, 500,000 acres in soybeans. I’m not sure. But if that were to occur, there’s no question once you run the numbers, then you’re going to have to have higher yield numbers to be able to compensate for the lost acreage."

The wheat numbers were nothing for the market to get overly excited about, Newsom said. "With the ending stocks number being larger than expected, it’s just another bearish nail in wheat’s coffin. It’s an endless supply of nails. This certainly isn’t going to help the wheat market rally by any means."

NASS also released its Small Grains summary last week. The agency reported all wheat production for 2014 was 2.04 billion bushels, a drop of 5 percent from 2013. Average yield was 43.8 bushels, down 3.3 percent. Winter wheat production was 1.38 billion bushels, down 11 percent, while spring wheat was 601 million, up 12 percent.

For oats, farmers produced 70.5 million bushels, up 9 percent from last year. Average yield was 67.8 bushels, up 3.7 percent. The 2014 production total was the fourth lowest on record, NASS stated.

10/8/2014