Someday, USDA might actually release its real numbers on 2012-2013 soybean ending stocks. That day was not Thursday, Sept. 12, 2013. The number was left unchanged from August at 125 million bushels, immediately raising eyebrows. The government's own weekly export sales and shipment report showed the U.S. shipping 1.330 billion bushels through the end of the 2012-2103 marketing year, yet the September report showed demand of only 1.315 bb, a difference of 15 mb. Domestic crush demand was increased by 5 mb to 1.690 bb, offset by a like increase in imports to 40 mb. This allowed USDA to keep the final arrow in its quiver, that of taking residual use into negative territory to maintain the bottom line.
The massaging of old-crop ending stocks is made even more important when what was done to new-crop is taken into consideration. Somewhat surprisingly, USDA reduced new-crop ending stocks by 70 mb from its August estimate of 220 mb through lower yield and production numbers, but held the important 100 mb to 120 mb area with the questionable beginning stocks number (old-crop ending stocks) and reductions in demand. The 20 mb decrease from August to September in domestic crush is possible, given the expected smaller cattle herd. But the 15 mb reduction in projected exports is as curious as old-crop export demand. Before the end of the previous marketing year, new-crop sales totaled more than 800 mb, one of the largest numbers and percentages of projected demand heading into the new marketing year on record. It will be interesting to see how shipments progress when/if supplies become available this coming harvest.
How low might U.S stocks of soybeans actually be at this time? Given that we are only shipping roughly 2 mb per week, we can assume it is far tighter than the 125 mb USDA continues to promote. This raises the important question of what will we see when the next quarterly stocks report, covering Q4 2012-2013, is released on Sept. 30.
The corn reports were almost as interesting. New-crop yield and production were both increased from August, despite the crop wilting under a "Dome of Doom" to close out the summer. The newly projected 155.3 bushel per acre yield leading to production of 13.843 bb was enough to increase ending stocks by 18 mb, offsetting a 58 mb decrease in beginning stocks (old-crop ending stocks) and total demand was left unchanged at 12.675 bb.
As with soybeans, the calculations involved with old-crop ending stocks are good for a laugh for anyone who wants to piece changes from last month together. For example, USDA's weekly export sales and shipment reports showed a total of about 910 mb shipped in 2012-2013, yet the September supply and demand report upped this 20 mb from August to 735 mb. Could it be some of those soybean ships were counted as corn? After all, they do look similar. Or at least the ships do. Ethanol demand was increased 15 mb to 4.665 bb.
The elephant in the room for both corn and soybeans is the unchanged planted and harvested acreage numbers. When will prevented planting acres be accounted for? Will it be in the October Crop Production report? A special October revision (always fun)? Or not until the "final" numbers are released in January? Stay tuned, it's going to be fun.
The massaging of old-crop ending stocks is made even more important when what was done to new-crop is taken into consideration. Somewhat surprisingly, USDA reduced new-crop ending stocks by 70 mb from its August estimate of 220 mb through lower yield and production numbers, but held the important 100 mb to 120 mb area with the questionable beginning stocks number (old-crop ending stocks) and reductions in demand. The 20 mb decrease from August to September in domestic crush is possible, given the expected smaller cattle herd. But the 15 mb reduction in projected exports is as curious as old-crop export demand. Before the end of the previous marketing year, new-crop sales totaled more than 800 mb, one of the largest numbers and percentages of projected demand heading into the new marketing year on record. It will be interesting to see how shipments progress when/if supplies become available this coming harvest.
How low might U.S stocks of soybeans actually be at this time? Given that we are only shipping roughly 2 mb per week, we can assume it is far tighter than the 125 mb USDA continues to promote. This raises the important question of what will we see when the next quarterly stocks report, covering Q4 2012-2013, is released on Sept. 30.
The corn reports were almost as interesting. New-crop yield and production were both increased from August, despite the crop wilting under a "Dome of Doom" to close out the summer. The newly projected 155.3 bushel per acre yield leading to production of 13.843 bb was enough to increase ending stocks by 18 mb, offsetting a 58 mb decrease in beginning stocks (old-crop ending stocks) and total demand was left unchanged at 12.675 bb.
As with soybeans, the calculations involved with old-crop ending stocks are good for a laugh for anyone who wants to piece changes from last month together. For example, USDA's weekly export sales and shipment reports showed a total of about 910 mb shipped in 2012-2013, yet the September supply and demand report upped this 20 mb from August to 735 mb. Could it be some of those soybean ships were counted as corn? After all, they do look similar. Or at least the ships do. Ethanol demand was increased 15 mb to 4.665 bb.
The elephant in the room for both corn and soybeans is the unchanged planted and harvested acreage numbers. When will prevented planting acres be accounted for? Will it be in the October Crop Production report? A special October revision (always fun)? Or not until the "final" numbers are released in January? Stay tuned, it's going to be fun.