USDA Wasde likely to cut US corn stocks, raise soy

The US Department of Agriculture (USDA)'s next World Agricultural Supply and Demand Estimates (Wasde) monthly report is likely to lower US corn beginning stocks and increase US soybean beginning stocks, taking direction from the quarterly Grain Stocks report.

Since 2010, there has been a 99pc correlation between the October Wasde beginning stocks and inventories reported in the SeptemberGrain Stocks report

for both corn and soybeans.

Based on that, the 12 October Wasde report will probably cut beginning stocks for corn to 1,361mn bushels (bu) from the September Wasde report's 1,452mn bu for the 2023-24 marketing year. Soybean beginning stocks will likely be increased to 268mn bu from the prior 250mn bu for 2023-24 marketing year.

Assuming all factors except beginning stocks are kept constant by the USDA, the corn balance sheet would tighten, with stocks-to-use decreasing to 14.8pc from the current estimate of 15.4pc. Soybean stocks-to-use would increase to 5.7pc from the current estimate of 5.2pc.

Meanwhile, the USDA Foreign Agricultural Service (FAS) has made some revisions to corn imports for several countries, which could portend changes to export estimates in the upcoming Wasde report and further increase the stocks-to-use ratio.

In particular, the USDA FAS has lowered China's total forecast corn imports for 2023-24 to 20mn t from the USDA official estimate of 23mn t. Japan's forecast corn imports by USDA FAS are 15.3mn t compared with the USDA official estimate of 15.5mn t for 2023-24. And Mexico's USDA FAS corn estimate is 18.2mn t compared with the USDA official estimate of 18mn t for 2023-24.

By Eduardo Gonzalez