Chicago Board of Trade Market News
Outlook: USDA published the quarterly Grain Stocks Report on Tuesday of this past week. The report is a snapshot of U.S. grain stocks on September 1. Measuring the stocks on that date is important because this is the first day of the new 2014/15 crop year for both corn and sorghum. In other words, the data shows the beginning stocks for the current new-crop year and the ending stocks for the prior 2013/14 old-crop year.
Total U.S. corn stocks on September 1 were 1.24 billion bushels. Subtracting this amount from the amount of corn stocks on June 1 implied that total corn consumption during the June through August time period was 2.65 billion bushels. This was a healthy increase in consumption above the prior year’s rate of 1.95 billion bushels for the same time period. Sorghum consumption during the same quarter was up 125 percent from the year-ago level. The importance of this data is the indication that the steady decline in feed grain prices during this past summer was not because of weak demand but due to anticipation of surplus harvest production.
Grain merchandisers report that they are receiving an increased volume of inquiries from customers as to when they should buy. In other words, there is additional demand that is trying to figure out when to buy. Remaining a patient buyer has paid off as general anticipation of larger yields and recent strength in the dollar have weighed on prices, but those factors are being increasingly offset by harvest progress and the approach of fall weather.