Market News & Headlines >> June 1 Stocks point to Larger Corn, Soy Carryouts
The quarterly Grain Stocks report released by USDA on June 30 clearly held bearish news for the corn and soybean markets, pegging June 1 stocks of both crops above trade expectations.
June 1 corn stocks were up 6.0% from a year earlier to a 28-year high of 4.722 billion bushels. The USDA stocks estimate was 194 million bushels above the average of trade expectations and 72 million bushels above the high end of expectations.
June 1 soybean stocks were up 289 million bushels or 47.7% from a year earlier to nine year high of 870 million bushels. The USDA stocks estimate was 41 million bushels above the average of trade estimates and 8 million above the high end of expectations.
The June 1 corn stocks number implied a sharp drop off in total third quarter 2015/16 corn disappearance versus 2014/15. USDA should cut its corn feed/residual use estimate in its July 12 supply/demand update and could cut corn-for-ethanol use slightly as well, based on the recent usage rate.
The larger-than-expected June 1 soybean stocks number suggests USDA likely underestimated 2015 soybean production in its Annual Crop Summary in January. USDA will likely cut soybean residual use in next week’s supply/demand update. The 2015 crop will not be revised again until September.
The Grain Stocks report held no surprises for the wheat market. June 1 wheat stocks at 981 million bushels were only 1 million bushels above USDA’s previous forecast for 2015/16 ending stocks and 1 million bushels below the average of trade estimates.