May 14, 2021
High corn and soybean demand to keep US stockpiles of the commodities at seven year lows
The United States Agriculture Department (USDA) said high domestic corn and soybean demand will keep stockpiles of both commodities at near seven-year lows, even after farmers harvest crops they are seeding currently, Reuters reported.
The estimates for corn and soy stockpiles were in line with market expectations, but the report showed surging gains in agriculture commodities especially due to soybean futures up to its highest in nine years this week.
Joe Vaclavik, president of Standard Grain, said it is possible that the market has been undervalued for the past few months.
The USDA's World Agricultural Supply and Demand Estimates monthly report also showed increased demand from the feed industry will push stockpiles of wheat to its lowest in seven years by June 2022, as livestock and poultry producers seek cheaper proteins to feed their animals.
Corn, soy, wheat exports were less than the previous crop year.
USDA estimates that domestic corn stocks would be at 1.507 billion bushels by September 1 next year, higher than the expected 1.257 billion bushels on September 1 this year.
Soybean stocks for the same month next year were seen to increase 20 million bushels from the 120 million projected for September 2021.The report also showed demand from soybean crushers will be up 35 million bushels to 2.225 billion.
Wheat stocks were projected to drop to 774 million bushels by June 2022, 11.2% lower compared to June 2021 and the lowest since 752 million bushels in 2015. Feed sector demand for wheat is expected to be 70% higher to 170 million bushels.