Ahead of today’s USDA quarterly stocks report, grain analysts Jerry Gidel of Rice Dairy and Jack Scoville of the Price Futures Group gave their outlook for what to expect during a panel discussion yesterday from the CME trading floor.
The average of expectations among analysts going into the September report were 1.126 billion bushels for corn, 132 million for soybeans, and 2.281 billion bushels for wheat.
According to Scoville, traders will be watching corn and soybeans the closest.
“The trade will focus primarily on corn and soybeans ending stocks numbers, and we’ll be looking for clues to see if there is a significant amount of new crop harvest being included in these numbers. That will be one major issue they’ll confront. And we’ll be looking to all three of these estimates looking for clues to how strong the feed demand has been here domestically.”
Gidel said we might see a higher number in soybean stocks than what is expected. “In general, the only change that might happen on soybean stocks vs. expectations is that we might have had a slight underestimate of last year’s crop, and that could reflect a number 10 or 20 million above that number if we have a number above the 130 million (bushel) general expectation.”
Gidel called the corn stocks “Probably the toughest and probably the most important number we’re going to see tomorrow.”
He also gave a hint at how analysts come up with estimates for what to expect from USDA reports.
“Us analysts and brokers look at how to come up with that number. We look at number of bushels assigned to feed over the last three quarters, we also look at how much harvest has occurred before September 1, and we also look at exports and ethanol usage. Basically, you come up with a feed usage for the summer or any quarter by taking out the beginning stocks and the other two categories of ethanol and grain exports, and what’s left over has been devoted to feed.”
So how close were the analysts? Please share your thoughts on today’s USDA report in the comments section.