Q3 Quarterly Grain Stocks Report Estimates
The USDA will be releasing the Q3 quarterly grain stocks report and annual acreage report on Tuesday, June 30. Randy Middelstaedt from StoneX shares his insights on what this report's estimates will be. Regarding corn, he shares some caution with this report, particularly the past grain stocks data and the figures reported for feed/residual usage. He also mentions there being some upward changes in the acreage report due to an “uneventful” spring planting season.
The issue is Mittelstaedt's skepticism toward the USDA's corn feed/residual figures. The December 1 stocks report showed Q1 feed/residual was up 17.2% year-over-year, and the March 1 report showed Q2 was up 15.9% ,yet cattle on feed was down, hog numbers were flat, and broiler hatch was barely up. The USDA currently has full-year corn feed/residual at 6.2 billion bushels, up almost 14% from last year, with no good animal data to support it.
For Q3, StoneX projects feed/residual at 950 million bushels, up just 2.2%. Adding ethanol (1.370 billion), exports (901 million), and food/industrial usage (340 million), total Q3 corn demand comes to 3.589 billion bushels. Based on this demand, StoneX estimates June 1 corn stocks at 5.444 billion bushels, the highest in 38 years, with a stocks-to-usage ratio of 41% which is in line with recent years.
Soybean demand is a much cleaner story. Q3 crush is estimated at a record 665 million bushels and exports at a record 350 million, driven largely by China's return to normal U.S. buying. Total Q3 soybean demand is estimated at 1.088 billion bushels, up 14.5% from last year and well above the prior record. Because most soybean demand is known ahead of the report, Mittelstaedt expects few surprises in the residual and projects June 1 soybean stocks at 1.019 billion bushels which is above last year and a six-year high.
Wheat demand was softer, with Q4 exports estimated at 201 million bushels and food usage at 241 million. Applying a historical -66 million bushel Q4 feed/residual, StoneX projects June 1 wheat stocks at 940 million bushels, just above the USDA's own 935 million estimate
With a normal planting season and good price signals, there is potential for the June Acreage report to “find” much of the two million acres the March plantings report indicated was lost. StoneX projects corn at 96.3 million acres (vs. the March estimate of 95.3M), soybeans at 85.1 million (vs. 84.7M), and all-wheat at 43.5 million (vs. 43.775M). Updated balance sheets incorporating this acreage data won't come until the July 10 WASDE report.
