USDA grain stock update set to slash corn, soybean stocks by 50%

The USDA’s quarterly update to its grain stocks report is expected to deliver cuts of more than 50% to both corn and soybean stocks levels when the update is released next Wednesday, according to estimates from leading analysts seen by Agricensus.

Soybean stocks are expected to be cut to 560-570 million bu (15.4 million mt) as of September 1, a close to 60% fall from the second quarter’s 1.39 billion bu (37.8 million mt) and a 35% drop from the 909 million bu recorded in September last year. 

The main reason for the fall was the smaller harvest last year, with the USDA still projecting a production volume of 3.552 billion bu (96.6 million mt) for the 2019/20 harvest, compared with 4.428 billion bu the previous year, after the Midwest experienced relentless rain through much of the season.

However, some analysts expect the final 2019/20 production figure to come in at up to 80 million bu above this level, leaving the door open to marginally less severe stock cuts. 

For corn, expectations are for a quarter-on-quarter drawdown of more than 50% from June’s 5.22 billion bu (132.6 million mt) outlook, coming in at 2.2-2.3 billion bu (57.1 million mt).

Despite the sluggish pace of recovery for the ethanol industry, demand from the feed sector and a burgeoning export campaign will have reduced stocks to a level equivalent with last year when the September stocks report posted a 2.35 billion bu figure.

The USDA estimates production for the 2019/20 at 13.617 billion bu (345.9 million mt), down from 14.34 billion bu in the previous campaign. 

Wheat stocks to grow

It is a different story for wheat, however, where inventory held in silos is expected to double to 2.2 billion bu (59.8 million mt), compared with 1.04 billion bu in June.

This brings wheat stocks figures in just behind the volume held at the same time last year, when 2.34 billion bu was held in storage. 

The small year-on-year drop is expected to come from a modest cut to production, with the small grains report – released on the same day as the quarterly stocks report – likely to show a cut to production of between 3-10 million bu.

The lowest estimate seen by Agricensus came in at 1.827 billion bu (49.7 million mt) compared with 1.838 billion bu in June.