Report points to large supplies of grain in the US

By Aerin Einstein-Curtis

- Last updated on GMT

© iStock
© iStock

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The US Department of Agriculture (USDA) notes corn stocks are up 10% from March 2016, while soybean stocks have jumped 13% in the same period. Wheat is also in with a shout in terms of higher supplies - all wheat stocks have increased by 21% since this time last year. 

The US agency released its latest grain stocks report​ last Friday (31 March). Total disappearance of some grains has improved, however, compared to the previous year.

One of the benefits of the stocks report is that it provides a way to gauge the overall feed and residual usage for feed crops like corn and soybeans, said Scott Irwin, professor in the department of agriculture and consumer economics at the University of Illinois, in a Farmdoc webinar​ on the report. That amount can be calculated to be about 3.776bn bushels, which is similar to previous years.

“So despite growing livestock numbers, something is putting a lid on total corn usage at least during the first half of the marketing year in recent years, ​he said in the event. “We think that is probably growing availability of DDGs coming out of ethanol."

However, another expectation going forward is that the growth in use of soybeans will outpace that of corn, said Chris Hurt, professor of agricultural economics at Purdue University, which may continue to lead to more soybean acres being planted.

“The renewable fuel standard (RFS) pushed corn usage up through the 2010 crop, but since then we’ve plateaued and the livestock industry grows at maybe 2% a year,”​ he told us. Although the US may not be seeing the same surges in soybean use that were present in the 2006-2010 period, there has been strong growth in soybean exports to China, he added.

Corn growth

The overall corn stock in storage is about 8.62bn bushels, an increase of 10% from the 7.82bn bushels in storage at this point last year, said the USDA. The majority, about 4.91bn bushels, is from on farm storage.

The indicated rate of disappearance from December 2016 through February 2017 is 3.77bn bushels, up slightly from the 3.41bn bushels used during the same period of time during the past year, the department said.

Even with the increase in the corn stock, the reduction in planned corn acres is expected help support a price increase for the coming year, said Hurt. 

Soybeans statistics

Soybeans saw a 13% growth in the amount in storage, said the USDA. At the beginning of March about 1.73bn bushels were in storage.

Farmers are seeing a reduction in the amount stored on farm, with the amount in that location at about 669m bushels, said the department. About 1.07bn bushels is considered being stored off farm – an increase of 33%.

Indicated disappearance for the December to February period totaled 1.16bn bushels, a drop of 2% from the same quarter the previous year, the department said.

With stocks and additional acres expected to be planted this spring, the prediction is that soybean and soybean meal prices will fall in the coming year, said Hurt. “I think you’re pushing that [price per ton] down to the $300 [a ton] for the 2017 crop, with normal growing season in the US and northern hemisphere,” ​he added.

Wheat, barley stocks growth

Wheat stocks in storage were up 21% in 2017 compared to the same point in 2016, said the USDA. The majority of the bushels were being held off-farm.

Indicated disappearance from December through February was 20.1m bushels, which is an improvement of 12% on the same time for the previous year, the department said.  

Similarly, barley saw its stocks grow 7% from the previous year to a stock of 147m bushels, said the department. The amount in storage grew from about 137.7m to 146.8m in that period.  

The disappearance for the period running from December 2016 to February 2017 was 45.7m bushels, the department said. The amount was a growth of 7% from the same timeframe a year earlier.   

Sorghum, oat stocks decline

Grain sorghum presented a different picture from the trend, with the overall stocks falling 11% from 2016 to 2017, said the USDA. The amount in storage in March was 180m bushels, down from 201m.

The overall used during the December to February period accounted for about 128m bushels, a 6% increase from what was seen during the same range for the previous year, said the department.

Oats also saw a drop in the amount in storage, said the department. As of March 1 about 63.2m bushels were being kept on or off farm, a reduction of 16% from the past year.

However, disappearance during the winter period grew by 64% from the same previous timeframe, the department said. Overall disappearance was 12.3m bushels. 

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