On Alert For Stronger Corn Feeding & A Smaller US Bean Crop



Market Analysis

Many times, September’s US grain stocks have been quiet events. These reports generally confirmed the USDA’s previous carryovers that were projected earlier this month. This has changed in the last decade with US crop quality, crop size & shifting feeding levels impacting the US final stocks. This has caused some sizable final stocks changes vs expectations. Corn’s final US carryovers have swung from 250 million less to 300 million more, while soybeans stocks have fluctuated from 70 million lower to 80 million bu higher than the trade estimates. Modest changes in the US soybean crop aren’t uncommon given the need to cover soybean’s hard demand dispersals. Corn crop changes are unusual with the feed/residual being its catch-all, but lower livestock numbers & a flinty 2022 quality corn crop are factors for this year.

After quality issues in 2018 & 2019 crops, corn’s traditional front loaded feeding pattern returned with lower quarterly usage throughout 2020. 2021/22’s US corn feeding followed this pattern until reduced US wheat & pasture supplies forced US cattle into the feedyards where more corn was fed last summer. Last year’s drought shorten-crop & high basis curtailed 2022/23’s first half feeding levels. However, with the US drought continuing last spring & reduced alternative feed supplies, June’s quarterly corn stocks were unexpectedly lower. This advanced spring’s US feed demand by 150 million bu over 2022. Recent 2.5-4% lower COF numbers & stagnate pork & poultry slaughter suggests a lower 2023 summer feed demand, but late exports & higher yearly feed could bring corn final stocks back 1.38 billion bu like 2022.

A late summer pickup could increase US exports another 7 million bu after the USDA’s previous 10 million jump. However, NOPA’s August report suggests a 5 million lower US crush to 2.215 billion. This projects a minor change in the US 250 million estimate. However, soybeans’ high residual levels on its quarterly stocks suggests a possible overestimate of the 2022 crop and a 225 million stocks on Sept 29. Over the years, minor bean yield changes of ¼ to 1 bu have occurred to clarify the size of US residual & balance sheet.


What’s Ahead

The upcoming final 2022/23 corn and soybean ending stocks on Sept 29th will be important for setting a tone about available crop supplies during upcoming US fall harvest. Country yield reports, S American planting progress and Ukraine’s export grain progress will be important price factors for the market.

Hold-new crop bean sales at 50%, corn at 35% and wheat at 45%.

More By This Author:

Higher U.S. Plantings Countered Lower Yields Limiting Stock Changes
USDA September Crop Supply/Demand And Production Report Summary
2023 Midwest Crop Tour - Heat/Dryness Overpowered The ECB Crop Count

Disclaimer: The information contained in this report reflects the opinion of the author and should not be interpreted in any way to represent the thoughts of any futures brokerage firm or its ...

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