Chicago Board of Trade Market News
Outlook: USDA published the quarterly U.S. Grain Stocks report on Wednesday, September 30 and it was considered neutral for feed grains. The Grain Stocks report offers a snapshot of total U.S. stocks on September 1 and projects that there were 1.73 billion bushels of corn, which was slightly smaller than the average analyst estimate of 1.735 billion bushels. The total 1.73 billion bushels of corn on September 1 was 41 percent above the year-ago level. However, that is not a bearish factor because last season’s record crop was not yet harvested. Furthermore, the disappearance during the June-August time period was larger this season at 2.72 billion bushels, above the prior-year’s usage during that same time period of 2.62 billion bushels. Naturally, the higher usage was encouraged by lower prices.
Sorghum is not expected to act as a competitive constraint against the price of corn moving higher since the September 1 stocks of 18.6 million bushels were down 46 percent from the prior year’s level. Furthermore, the majority of reduction in sorghum stocks was at off-farm locations; that same condition of reduced stocks at off-farm locations also exists for corn. These circumstances imply that farmers are willing to maintain a certain level of stocks from one season to the next, and if that inventory is to be enticed away it will need to be with higher prices.