The quarterly Grain Stocks and Small Grains Annual Summary reports will come out on Tuesday.
by Darin Newsom, DTN Senior Analyst
OMAHA (DTN) — Few fireworks are expected in this round of USDA Quarterly Stocks numbers, meaning traders aren't likely to lose focus on recent new-crop production estimates.
USDA will release its quarterly Grain Stocks and Small Grains Annual Summary reports at 11 a.m. CDT Tuesday.
QUARTERLY STOCKS
Soybeans — If I had to choose a number of interest for old-time's sake, it would probably be soybean quarterly stocks. USDA has held steadfast to its 130 million bushel ending stocks estimate, arriving at that sum through the aid of a (-94) mb residual use calculation. True to form, the average pre-report estimate came in at that same 130 mb, with the low end of estimates registering at 100 mb. If USDA sticks to its story of 130 mb, it would still be the tightest Sept. 1 stocks as a percent of total supplies (3.509 billion bushels), coming in at 3.7{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}. The previous low was 4.2{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} from 2003-2004 when Q4 stocks were pegged at 119 mb. The bottom line, though, is it shouldn't matter. The market is focused on record new-crop production, which could give USDA leeway to sneak in a lower-than-expected stocks number.
Corn — Like a losing blackjack player who just said “Hit me” while showing 18, corn market bulls are desperate for a low quarterly stocks number to be turned over in Tuesday's report. The pre-report average estimate of 1.181 bb is in line with recent monthly USDA Supply and Demand reports, with the high side of 1.255 bb. If USDA were to account for U.S. exports coming up 60 mb short of the 2013-2014 projection of 1.925 bb (the final marketing year shipment number was 1.865 bb) its quarterly stocks figure would come in close to the high end of estimates. However, USDA doesn't necessarily have to use its own export data, meaning it may be content to come in near its own previous estimates. And with no newly harvested bushels to “accidentally” get added into the mix, the only excitement might be if the “Phantom 300” (million bushels) makes an appearance. It has been awhile since last they entertained.
Wheat — Pre-report estimates for Q1 wheat stocks came in at 1.894 bb. If USDA is in agreement when it releases its report on Tuesday, it would confirm the idea that first quarter demand for domestic wheat was unspectacular. The 1.894 bb would be roughly 68{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} of estimated total supplies of 2.789 bb, slightly below the 20-year average of 69.5{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48} and the five-year if 70{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}. Still it would be the smallest first quarter demand as a percent of total supplies, roughly 32{ba1edae1e6da4446a8482f505d60d3b8e379ff6dedafe596d9ba4611a4e33a48}, since the 2011-2012 marketing year. If USDA leans one way or the other, it could be toward the lower end of the pre-report range at 1.707 bb.
SMALL GRAINS SUMMARY
The average pre-report estimate for all-wheat production came in close to USDA's previous estimate of 2.03 bb. The range is relatively small, with the high side at 2.120 bb versus the low end of 1.965 bb. All winter wheat is expected to be just over 1.4 bb, again close to USDA's previous estimate of 1.397 bb. Up and down the line, few changes are expected to be seen. If USDA holds near both its previous numbers and the average pre-report estimates, the small grains summary will warrant little attention.
Editor's note: Join DTN Senior Analyst Darin Newsom at 12 p.m. CDT on Tuesday for a discussion on the latest USDA reports and what the numbers might mean for the markets. Sign up now at: www.dtnpf.com/promo/webinars.
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Posted with DTN Permission by Haylie Shipp
