The USDA NASS headline Monday was a 17 percent drop this year over last in both corn and soybean stocks. But analysts expected a larger drop so the September 30th grain stocks report was a bearish one for corn and soybean farmers. Logan Burgess is a broker at Grain Hedge and told HAT the corn selloff after the report wasn’t as sharp as he had feared.
“At this time in the marketing year a large focus is still on the upcoming crop. The Septebmer 1st quarterly grain stocks numbers are really more a reflection of last year’s crop, so that might be why we have a little bit of a muted reaction in corn.”
September first corn stocks are 824 million bushels according to USDA compared to an average guess of 681 million bushels. That number has Burgess pretty bearish about corn futures prices.
“This is a pretty darn bearish number and I wouldn’t be surprised if corn made a serious run now at the low 4’s. We’re looking at some recent contract lows around 445, so that’s an area to watch. If we can get a good move below that I think it opens the door to further losses there.”
December corn did make a new low for the contract down to 440 ¾ during the trading session, and finished the day at 441 ½ .
Soybeans stocks are at 141 million bushels compared to the 124 million bushels average estimate. That sent futures sharply lower, a surprising move to Burgess.
“It seems a little bit overdone in soybeans. The magnitude of that number, it is a little bit large, and considering how concerned people are about this upcoming soybean crop I’m surprised we see it down 30 cents here at the moment. I think what could be contributing to the selling is that technically soybeans have really been on a tear here recently, so this number doesn’t really do anything to turn around that trend.”
Another contributing factor was a USDA 19 million bushel upward adjustment in 2012 soybean production.