September 29, 2004

US Sept 1 Corn Stocks Seen At 953 Million Bushels

The US Department of Agriculture is expected to report fourth quarter US corn stocks at 953 million bushels in its quarterly grain stocks report, as usage numbers are on par with expectations seen in the USDA's September carryout estimate.

The report is scheduled for release Thursday at 0730 CT (1230 GMT).

Despite the fact the report is a quarterly USDA report, the data is taking a back seat to new-crop production outlooks, as analysts call the numbers "old news."  Traders are not expecting even a 50 million bushel adjustment on either side of the USDA's September ending stock projection would make a big impact with an 11 billion-plus crop forecasted to filter into supply channels.

The average of analysts' guesses surveyed estimate corn usage around 2.017 billion bushels, bringing stocks down to 953 million bushels. Estimates ranged from 907 million to 1.030 billion. Stocks as of Sept. 1, 2003, totaled 1.087 billion. The USDA's September ending stock projection was 954 million bushels.

The report will provide the final stock figures for the 2003-04 marketing year. Any increase in the stocks figure above the USDA's September carryout figure would be linked to feed use, as exports and industrial use were widely known, said Joel Karlin, analyst with Intergrated Grain and Milling.

Exports could be slightly higher than the USDA current projects, with shipments more in line with 1.900 billion bushels than 1.885 billion reported in the September supply and demand report, added Karlin.

Joe Victor, analyst with Allendale Inc. in McHenry, Ill., said overall fourth quarter usage was as expected, but he was a little disappointed that feed use was not as strong due to animal units being down.

However, domestic use in the quarter remained consistent with the expansion of ethanol production, as new plants coming online continued to draw down stocks. The running tally on corn use for ethanol from September 2003 through June is up 22% from the previous year over the same time frame.

The fourth quarter showed end users "played it smart" by spacing buying interest out, as the absence of a poor growing season did not provide any urgency for end users to forward-book or stockpile supplies with a record new- crop close at hand, Victor said.

Shawn McCambridge, senior grains analyst at Prudential Securities in Chicago, projected corn stocks at 907 million bushels, but expects nothing spectacular in the report besides some fine-tuning. The USDA may look at a modest increase in exports and feed with a slight decrease in food, seed and industrial use. But the figure will be within 50 million bushels on either side of the September supply and demand ending stock estimate, he said.