KSU “Quick Analysis of the Numbers” of the 3/31/2015 USDA Grain Stocks Report

Today on March 31, 2015 the USDA National Agricultural Statistics Service (NASS) released its 2015 Prospective Plantings Report and its March 1, 2015 Quarterly Stocks Report.  Following are the key findings in the Grain Stocks report by major crop:

A. U.S. Corn

U.S. Corn Stocks on March 1, 2015 = 7.745 billion bushels (bb)……..Up 136 million bushels (mb) from prereport expectations, and up from 7.008 bb on 3/1/2014, 5.400 bb on 3/1/2013, and 6.023 bb on 3/1/2012. The 67% confidence interval for this USDA forecast is from 7.582 to 7.908 bb, implying that his estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Corn Usage during December 2014 – February 2015  = 3.467 bb……..Down 277 mb from implied prereport expectations, but comparable to 3.444 bb in Dec-Feb 2014, 2.633 bb in Dec-Feb 2013, and 3.623 bb in Dec-Feb 2012.

On-Farm Storage of U.S. corn is estimated to be 4.38 bb, up 13% from a year earlier, and indicative of a large amount of unsold U.S. corn yet on “current crop” 2014/15 that is likely to be a negative factor in U.S. corn cash prices in coming months (absent a weather-related, negative set of production factors in the summer of 2015).   Off-Farm Commercial Storage of U.S. corn is estimated to be 3.36 bb, up 7% from a year earlier, also indicative along with On-farm storage amounts, and a negative outlook for U.S. corn prices this summer.

Market Implications => Higher than expected March 1, 2015 U.S. corn stocks and lower than expected Dec-Feb 2015 U.S. corn use is likely to be interpreted as negative for U.S. corn markets. However, Dec-Feb 2015 U.S. corn usage is still the highest in 3 years – even with just a moderate pace of U.S. corn exports during this time period.

B. U.S. Grain Sorghum

U.S. Grain Sorghum Stocks on March 1, 2015 =119 million bushels (mb)……..Down 7 mb from prereport expectations, and down from 176 mb on 3/1/2014.  However, this amount is larger than 92 mb on 3/1/2013, and 108 mb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 85 to 152 mb, implying as for other major U.S. crops that his estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Grain Sorghum Usage during December 2014 – February 2015  = 104 mb……..Up 1 mb from implied prereport expectations, but up considerably from 56 mb in Dec-Feb 2014, 48 mb in Dec-Feb 2013, and 43 mb in Dec-Feb 2012.

Market Implications => Strong exports of U.S. grain sorghum during the Dec-Feb 2015 period have been a major factor in usage being nearly double the amount used during the previous three (3) Dec-Feb periods. This is a supportive, bullish result for U.S. grain sorghum markets and local grain sorghum basis.

C. U.S. Wheat

U.S. Wheat Stocks on March 1, 2015 =1.124 billion bushels (bb)……..Down 16 mb from prereport expectations, and up from 1.057 bb on 3/1/2014.  However, this amount is smaller than 1.235 bb on 3/1/2013, and 1.199 bb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 1.066 to 1.183 bb, indicating that this estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Wheat Usage during December 2014 – February 2015  = 405 mb……..Down 36 mb from implied prereport expectations, and down from 418 mb in Dec-Feb 2014, 436 mb in Dec-Feb 2013, and 463 mb in Dec-Feb 2012.

Market Implications => Weak exports of U.S. wheat during the Dec-Feb 2015 period and moderate-to-poor wheat feeding have been a major factor in usage being less than the amount used during the previous three (3) Dec-Feb periods. This is a negative, bearish result for U.S. wheat markets and likely also for local wheat basis.  However, concerns about growing conditions for winter wheat in the U.S. may mitigate this factors and begin to play a major role in U.S. wheat market direction in coming weeks and months.

D. U.S. Soybeans

U.S. Soybean Stocks on March 1, 2015 =1.334 billion bushels (bb)…….., Record high, but down 70 mb from prereport expectations, and up from 998 million bushels (mb) on 3/1/2014 and from 994 mb on 3/1/2013.  However, this amount is smaller than 1.374 bb on 3/1/2012.  The 67% confidence interval for this USDA forecast is from 1.254 to 1.414 bb, indicating that this estimate could still change considerably in future Quarterly Grain Stocks reports.

U.S. Soybean Usage during December 2014 – February 2015  = 1.194 bb……..Up 16 mb from implied prereport expectations, and up considerably from from 1.160 bb in Dec-Feb 2014, 968 mb in Dec-Feb 2013, and 995 mb in Dec-Feb 2012.

On-Farm Storage of U.S. soybean is estimated to be 609 mb, up 60% from a year earlier, and indicative of a large amount of unsold U.S. soybeans yet on “current crop” 2014/15 – that (similar to corn markets) is likely to be a negative factor in U.S. soybean cash prices in coming months (absent a weather-related, negative set of U.S. soybean production factors in the summer of 2015).   Off-Farm Commercial Storage of U.S. soybeans is estimated to be 725 mb, up 18% from a year earlier, also indicative along with On-farm storage amounts, and a negative outlook for U.S. soybean prices this summer.

Market Implications => At face value, this report is “moderately supportive” for U.S. soybean markets, with marginally lower than expected March 1st U.S. soybean stocks, and marginally higher than expected Dec-Feb 2015 usage.  Although soybean market prices are relatively low compared to recent years, these numbers support the idea that lower prices have supported soybean usage during Dec-Feb 2015.

Slide1 Slide2

https://i1.wp.com/www.kansastravel.org/kansastravelblog/blog120603a.JPG

The Smoky Hill River near Salina in Central Kansas (Source: http://www.kansastravel.org/kansastravelblog/1206.htm)

https://i0.wp.com/donm.smugmug.com/Motorcycles/BOD-Smoky-River-Trail/IMG1363/642212336_fkBaW-L.jpg

The Smoky Hill River Valley and the Historic Smoky Hill Trail in Western Kansas (Source: http://historum.com/american-history/19145-howard-raynesford-smoky-hill-trail-4.html)

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s