USDA report to shine light on year-end stocks
Although it may be overshadowed by the Acreage report, the upcoming USDA quarterly Grain Stocks report will provide an important checkpoint for gauging prospective year-end stocks of corn and soybeans, said a University of Illinois Extension marketing specialist.
The report, to be released on June 30, will show the level of inventory on June 1, said Darrel Good.
"For soybeans, the magnitude of crush and exports during the March through May 2006 period is pretty well known," he said. "The June 1 estimate of stocks allows for the calculation of seed, feed, and residual use of soybeans during that quarter and provides a benchmark for evaluating the accuracy of the estimated size of the 2005 crop.
"An unusually large or small residual use for the quarter may indicate an error in that crop estimate. However, since the calculated level of seed, feed, and residual use during any particular quarter varies significantly from year to year, an extremely large deviation from expected value would be required to suggest an error in the production estimate."
The Census Bureau estimates the domestic soybean crush in March, April, and May 2006 at 431.3 million bushels, very near the level during the previous year. Census Bureau estimates of U.S. soybean exports are available for March and April, but will not be available for May until early July.
From September 2005 through April 2006, the Census Bureau estimates of U.S. soybean exports were nearly identical to the USDA estimates. Using the USDA estimates for May, exports during the quarter are estimated at 178.2 million bushels, 33 million less than exported during the same quarter last year.
Over the past five years, Good noted, the calculated level of seed, feed, and residual use of soybeans during the March to May period ranged from 6.3 to 69.5 million bushels, averaging 40.5 million bushels. For the first half of the 2005-06 marketing year, seed, feed, and residual use of soybeans totaled 173.6 million bushels, about equal to the average of the past five years.
"If third quarter use this year is near the five-year average of 40.5 million bushels, total use during the quarter should have been near 650 million bushels, leaving June 1 stocks near 1.02 billion bushels," said Good. "Stocks on June 1, 2005 totaled 699.3 million bushels and the record June 1 inventory was 848.9 million in 1986. That record was nearly equaled--848.6 million--in 1999."
Good said it is more difficult to anticipate the magnitude of the estimate of June 1 corn inventories.
"Estimating quarterly exports is straightforward, but less information is available for the other two categories: seed, feed, and residual uses and processing uses," he said.
Monthly Census Bureau estimates of U.S. corn exports are available through April 2006, and weekly estimates are available from USDA for the entire March through May quarter.
From September 2005 through April 2006, cumulative Census Bureau estimates of U.S. corn exports were about seven million bushels (0.5 percent) larger than USDA export estimates. The difference between the two estimates has been unusually small so far in the 2005-06 marketing year, Good noted.